Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Lazlo Pierce who wrote (14851)	3/15/1998 9:55:00 AM
From: HH	Read Replies (1) \| Respond to of 95453

Here's a recap from Dallas news. scalped from AOL The following article appeared in this Sunday's Dallas Morning News in the Business Section.... FWIW. I will only hit the highlights for the sake of brevity. ***************************************************************************************************** (good table in the article) Daily OPEC Production Quotas in MMBPD: Country................Old '97 Quota.....New '98 Quota.........Actual (as of 12/97) Production 1. Saudi Arabia...........8.00...................8.76...........................8.73 2. Iran........................3.60...................3.94...........................3.65 3. Venezuela..............2.36....................2.58..........................3.45 4. U.A.E....................2.16....................2.37..........................2.24 5. Kuwait....................2.00....................2.19..........................2.18 6. Nigeria....................1.86....................2.04..........................2.22 7. Indonesia................1.30.....................1.46..........................1.36 8. Libya......................1.39.....................1.52..........................1.45 9. Iraq.........................1.20.....................1.31..........................0.78 10. Algeria...................0.75.....................0.90..........................0.86 11. Qatar.....................0.38.....................0.42..........................0.67 Source: U.S. Dept. of Energy (another table) Venezuela's Proven Oil Reserves - Billions of Barrels 1993 .........64.4 1994..........64.9 1995..........66.3 1996..........72.6 1997..........74.1 ** Source: Petroleos de Venezuela SA (some excerpts from the article) ........"The age of [OPEC production] quotas is finished." - E. Arrieta, Venezuela Energy Minister ........ "Never before, until now, has Venezuela demonstrated its oil strength." - L. Guista, Pres. Petroleos de Venezuela SA. ........ Arrieta compared the cartel to a "meeting of Pinocchios in which we establish quotas that no one observes." ........ Venezuela has pushed OPEC to an impasse. The group that controls 40% of the world's oil reserves and wielded enormous economic clout in the '70's may be ready to sit down with non-OPEC producers to discuss a strategy for boosting crude prices. The last time that happened was in the mid-80's, when prices fell to $10 a barrel. ........."A meeting of all the producers to try to stabilize the market is one thing that makes sense," said Guisti in a TV interview this past week. "In this respect, there are some initiatives that are moving forward. You can't debate these things publicly,however, as they lose their effectiveness." .........Venezuelan energy officials have said they would support a broader initiative if it were based on the current production of OPEC members. The Venezuelans deny they are ready to bolt from the cartel which the South American nation helped found in 1960. .........The price plunge has triggered a frenetic series of phone calls among OPEC members & other leading oil producers. In a news conference on Tuesday at Miraflores, the Venezuelan White House, Arrieta acknowledged that he was placing phone calls to oil ministers whose governments were recalculating budgets that depend on oil revenue for up to half of their funds. Among those he called, Mr. Arrieta says, was Kuwait and Iran - OPEC's 2nd biggest producer. Arrieta also called Mexico, an energy powerhouse outside of the OPEC cartel that has been particularly irked by Venezuela's overproduction. Mexico, also, has had to cut its budget in January. Arrieta also placed a call to Norway, another non-OPEC producer. Libyan President Gadhafi called the Venezuelan President to stress the need for teamwork in shoring up flagging oil prices. ....... The reason for Venzuela's overproduction is simple: Money. Oil revenues are providing up to half the national budget. About half of Venezuela lives in poverty. In a country racked by political instability, persistent inflation, and corruption, Venezuelans proudly joke that the one thing that works in the economy is oil. ....... Oil is central to the free-market embrace that began in the early '90's. In '95, Venezuela began accepting foreign investment in its oil fields - just two decades after nationalizing its oil industry. Oil production has increased 40% since the country moved toward free-market policies, and the goal is to double crude output to 6.3 million bbls/d by 2006. With such giants as Exxon, Mobil, and Chevron drilling in its fields, it would be difficult to orchestrate a cutback in its current production of 3.41 million bbls/d. ....... "Venezuela has committed itself to open up to foreign investment in a way that almost none of the other OPEC members have. It is the reversal of nationalization. It seems that they are charting their own course." - J. Pratt - Business Professor at the U. of Houston. ........ Other partners are Lasmo PLC of the U.K., Statoil AS of Norway, and Total SA of France. Many of the foreign companies are focused on developing the Orinoco Belt in Eastern Venezuela, where there are potentially huge reserves of extra heavy oil. However the critical question for Venezuela in the Orinoco region is how much of the underground bonanza is commercialy recoverable. ........The influx of foreign capital has made it all the more likely that Venzuela will stick to its policy of defying its OPEC-imposed production quotas, analysts say. "The quota should be reflective of the country's production capacity. Venezuela should have received more than a 10% boost in its quota in November. It is absolutely certain that we will not see Venezuela reduce back to its current quotas." - Kenneth Miller, Sr. Analyst, Purvin & Gertz - Houston-based energy consultants.