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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (47459)	7/7/1999 10:49:00 AM
From: Captain James T. Kirk	Respond to of 95453

I remember last year this time the draw was HUGE.

To: Think4Yourself who wrote (47459)	7/7/1999 11:29:00 AM
From: Tomas	Respond to of 95453

Analysts -- Cost cutting takes toll on old oilfields The oil industry's determination to cut costs means older fields will start to slow down sooner than expected as companies stop trying to eke out every last drop, analysts said. This should give further zest to a recovery in oil prices by stifling supplies from mature regions like the North Sea. New technology has already made peak output rates there higher but shorter. "North Sea production has fallen below expectations this year," said Jonathan Waghorn of Edinburgh-based consultants Wood Mackenzie. "While this is mainly because of maintenance work and unplanned shutdowns, faster decline rates are going to play an increasing part," he said. The International Energy Agency (IEA)'s June report said faster field decline rates would help pull world oil supply around one million bpd below demand this year. "Declines have been much steeper than expected and projected decline rates have been steadily increased," the IEA said. Last year's savage price slump has made firms eager to avoid expensive techniques like infill drilling previously used so successfully to rejuvenate older fields. Norway has been consistently below official output forecasts of late as stalwarts like Statfjord and Oseberg tire. Firms have already found that technical advances which initially let them get more oil out by tapping tricky parts of the reservoir could not keep peak rates as high as older methods. "New oilfields developed with new technology and especially those with horizontal wells seem to have shorter production lives," said a recent report by BT.Alex Brown, now part of Deutsche Bank. "Much of the increase in output from old fields in the mid-1990s was short-lived and produced a short-term blip on long-term decline trends." The report argued that reliance on large, old fields -- notably BP Amoco in the North Sea and Alaska and Norsk Hydro in Norway -- has been a major factor in forcing firms to merge as they look to invigorate reserve bases. Development drilling work to expand field reserves -- so far spared the worst of this year's budget cuts as existing commitments were completed -- will also suffer particularly badly from now on. "The budget cuts hit frontier exploration first and the affect on development drilling has lagged as a lot of projects were commissioned before last year's price fall," said Martin Wingrove of consultants Smith Rea. The collapse in development activity, which has dragged down rig hire rates to the lowest level in several years, has already left over 30 jack-up rigs idle in the Gulf of Mexico, the analysts said. Another 15 are stacked up in the North Sea. Yet an oil price pick-up as supplies dwindle means that oil firms' thrift could be keeping them from a potential windfall. "This year holds the promise of being a superb year for global upstream investment," said U.S. analysts John S. Herold. Quoted from Kerm Yerman's newsletter July 6