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

To: marc chatman who wrote (15574)	3/19/1998 7:27:00 PM
From: pz	Read Replies (1) \| Respond to of 95453

Unocal eyes capital spending cuts Reuters Story - March 19, 1998 11:42 EL SEGUNDO, Calif., March 19 (Reuters) - Unocal Corp Thursday said lower crude oil prices will likely cause it to shave $250 million from its $1.5 billion budgeted for capital spending projects in 1998. The cuts will affect three primary areas: near-term production projects that are affected by low commodity prices, investments in non-oil and gas business and longer-term exploration projects that need more study. .Unaffected are Unocal's high-value growth programs such as exploration projects in the Gulf of Mexico shelf and deepwater areas, the company said in a statement. Also, growth programs in Indonesia, Bangladesh, Argentina and the Caspian Sea will likely escape the budget ax at Unocal, one of the world's largest independent oil and gas producers. Prices for light sweet crude on New York Mercantile Exchange slid to nine and a half year lows earlier this week amid overproduction by OPEC members, weak Asian demand and a weather-related drop in U.S. consumption this winter. "In the U.S., we will likely see a reduction in workovers and possibly fewer development wells drilled," said Roger Beach, chairman and chief executive officer. Unocal's production in the lower 48 states in the United States will fall below previous forecasts, the company said. It had expected to increase lower 48 U.S. production by 2-1/2 percent per quarter during the year from the levels achieved in the fourth quarter of 1997. The company based the lower production forecasts on lower capital spending and pipeline curtailments in the Gulf of Mexico.

To: marc chatman who wrote (15574)	3/19/1998 7:40:00 PM
From: Teddy	Read Replies (1) \| Respond to of 95453

Ha! Did you catch the end: "Right now, there is more pressure on costs going up (for deepwater drill rigs). A lot of this is driven by supply and demand and the challenge for us is to make sure we manage this cost effectively," Pattarozzi said. Who said contracts were being canceled and rates were dropping? "...we and the industry on the whole have confidence prices are going to improve over the long haul," said Rich Pattarozzi, president and CEO of Shell Deepwater Development Inc, in a telephone interview with Reuters. Shell Oil Co, the main U.S. subsidiary of giant Royal Dutch/Shell Group , has had a long-term aim of shifting its production away from the low-margin heavy onshore crude of West Texas and California and toward more profitable offshore Gulf of Mexico output.