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

To: BigBull who wrote (64109)	4/9/2000 2:11:00 PM
From: Post_Patrol	Read Replies (1) \| Respond to of 95453

BigBull....regarding $15 oil >>LONDON -- Oil companies won't raise exploration and production spending this year despite the Organization of Petroleum Exporting Countries' pact to keep its basket price in a $22-$28 a barrel band. Once-bitten-twice-shy majors, still shocked by the 1998 oil price crash, want to see oil hold steady for up to two years before lifting upstream spending, analysts say. "At the moment companies aren't convinced high prices can be maintained - it seems too good to be true," said David Black a consultant at oil analysts Wood MacKenzie. Companies want evidence that OPEC can make good its promise to tame the market before they raise the $14/bbl to $18/bbl figure on which most E&P spending is currently based. Merrill Lynch forecasts that Brent will average $24.00/bbl in 2000 and $21.50/bbl in 2001. Other estimates peg the price at a similar level. Front-month Brent is trading Thursday at close to $24.00/bbl on the International Petroleum Exchange. Royal/Dutch Shell (RD) and BP Amoco (BPA) remain cautious. "We conduct business on the premise of an oil price of $14 a barrel," a BP spokesman said. BP is forecast to spend around $5.1 billion on E&P in 2000. That represents around 60% its total capex of $8.5 billion. That level of E&P spending is up from $4.2 billion in 1999, but considerably lower than $6.18 billion spent in 1998. Royal Dutch/Shell is similarly conservative. Projected E&P spending in 2000 is $5.7 billion, compared with $5.4 billion in 1999 and $8.4 billion in 1998, the company said. Royal/Dutch Shell's Chairman Mark Moody-Stuart said recently: "We think that the best approach is to get our business...into the shape where we can make good money at $14 and sleep easily at $10."<< The Post_Patrol