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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: jim_p who wrote (13214)	9/21/2002 2:37:12 PM
From: nspolar	Read Replies (1) \| Respond to of 206116

jim_p, the Norwegian article is classic Norwegian reporting. "The Knives Come Out". "UMoe prepares for war". Etc. A little overdone, but still it is premature and maybe immature to think all is smooth sailing. I still am not sure what Umoe wants these other shares for. Maybe it has something to do with the 33.3% rule. Maybe not. Not sure. If he gets his way and gets most of the shares, maybe he gets the share holding he wants either way. If you own say a third of company with or without the 33.3% rule being invoked, and that is what you want, who cares. The main thing is I can't see these extra shares meaning squat with respect to debt reduction. I've had some other thoughts about Umoe, that I'll go ahead and bring out. First I don't know how many of you are very familiar with the Norske oil industry. Briefly it is huge, started in part by the Americans with Ekofisk and Stratfjoerd. These two fields were huge finds and were used to fund development of others as time went on. Most of the present fields are operating by Norwegian companies, namely Statoil and Norske Hydro. During the oil downturn in the early nineties several of the foreign forms, who weren't operators, pulled out. For a foreign operator in Norway, the economics are not great. The Norskes take most of it. There was a lot of local debate about this at that time, spurred by layoffs at foreign firms. The Norskes since I believe have given a few more licenses to foreign operators, but basically their strategy is just keep a few of em interested and particapating. A reason may be that future projects may get more and more expensive, requiring more investment. i.e. the old keep on a string trick. Large future project will have a tendency to be farther north and in deeper water. Additionally many of the large fields have of course been discovered, in particular in the more southern and shallower waters. These fields are aging, slowly. Lots of reserves yet, but slowly going down. The money is in oil. Norway is well blessed with gas, but this isn't nearly so profitable. There are a lot of smaller oil fields around, that haven't been touched. I don't think the larger Norske companies like Statoil have been very successful in producing the few that they have, in a profitable manner. A large foreign company would not typically want much to do with these, unless perhaps they already had a large presence in Norway. Not many of these. Anyway I believe the Norske Olje Directorate is very interested in exploiting these - jobs and more jobs for local Norske industries. I've wondered if this is where PGS will come in, and PGS will be given licenses and hence wind up with more and more reserves. The Norwegians industries are no different than the American in that the larger they get, the higher the over head and internally more inefficient. Small companies such as PGS and maybe Smedvik certainly have a better chance of operating these small fields succcessfully, direct, as opposed via contract through large firms. Umoe is also of the age that he may still be infatuated with ships and the shipping industry. Maybe he thinks he can make a go of it and has visions of even more ships. As you know once upon a time the Norwegians were a power here. But they got too extravegant and fortunately for them oil was discovered in the Ekofisk field.