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Gold/Mining/Energy : Anyone following UTI Energy Corp.? -- Ignore unavailable to you. Want to Upgrade?

To: Susan Saline who wrote (797)	6/9/1998 3:18:00 PM
From: Captain James T. Kirk	Respond to of 1305

OPEC Said Missing Oil Cut Targets By DIRK BEVERIDGE AP Business Writer LONDON (AP) -- Things are looking pretty dismal in the oil market. Prices have been sinking, even though OPEC surprised traders this spring by sticking with most of the production cuts its members promised. Now, some of the big players in OPEC are calling for deeper reductions, but analysts predicted Tuesday that OPEC members lack the willpower to meet lower targets. If that's correct, consumers could continue to enjoy a bargain while producers suffer. ''There's not much out there that looks bullish,'' said Victor Yu, who follows oil markets in New York for the commodity trader Refco Inc. ''OPEC -- even though they said they were cutting back 'x' amount of barrels -- they aren't cutting that amount.'' Ten of the 11 members of the Organization of the Petroleum Exporting Countries agreed in an emergency meeting in March to reduce output by 1.245 million barrels per day. But the International Energy Agency in Paris reported Tuesday that the actual cuts came up short, at around 1.017 million barrels, last month. And OPEC member Iraq boosted output modestly. Iraq did not join the effort to cut production because it can only pump limited amounts of crude under United Nations sanctions imposed after it invaded Kuwait in 1990. OPEC's dilemma enables U.S. motorists, who are among the world's biggest energy consumers, to enjoy the benefits of cheap fuel prices. Retail gasoline in the United States was holding steady at about $1.14 per gallon, according to a Lundberg Survey early this month. The survey said the start of the traditional summer driving season had failed to push prices higher, thanks to a ''more than ample supply.'' The IEA report cast further gloom over the markets by saying the demand for crude in Asia was even lower than expected as a result of the lingering financial crisis. Overproduction has been a huge problem in the oil market since last winter, when OPEC made an ill-judged decision to pump more oil just as the Asian financial crisis was beginning to weaken world demand. Prices were lower on New York and London futures markets Tuesday afternoon, extending a sharp decline from Monday. Light sweet crude oil to be delivered in July was off 25 cents, at $14.30 per barrel, on the New York Mercantile Exchange. Brent crude for July was off 12 cents, at $14.10 per barrel, on London's International Petroleum Exchange. OPEC said Tuesday that its average oil price on Monday was $12.39 per barrel -- not as bad as the low of $10.75 on March 17, but still just slightly better than half of the group's official goal of $21. Oil analyst Geoff Pyne, of UBS Ltd. in London, said OPEC is doing better than expected and would be wise to phase in additional production cuts over time to let the market ease into a comfortable level. Saudi Arabia and Venezuela joined with non-OPEC member Mexico last week in pledging another 450,000 barrels in daily production cuts. Those three big exporters were behind the so-called ''Riyadh agreement'' that led to the first round of cuts. Saudi oil minister Ali Naimi, trying to drum up support for additional cuts, visited the Kuwaiti oil minister, Sheik Saud Nasser al-Sabah, on Tuesday. Naimi predicted afterward that more cuts will be forthcoming from others in OPEC, which meets later this month. Sheik Saud suggested a good target might be cuts of another 1 million barrels. ''The international markets are now drowning in oil,'' Sheik Saud told a joint news conference in Kuwait.

To: Susan Saline who wrote (797)	6/9/1998 3:21:00 PM
From: Captain James T. Kirk	Respond to of 1305

an interesting situation brewing: New Nigerian leader inherits crumbling oil sector By Andrew Mitchell LONDON, June 9 (Reuters) - Nigeria's new ruler General Abdulsalam Abubakar faces a gathering crisis in the country's crucial oil sector, analysts said on Tuesday. His predecessor General Sani Abacha had maintained a strong personal grip over Nigeria's powerful oil industry, where crude exports account for a massive 95 percent of the OPEC member's foreign exchange earnings. His death early on Monday deepened uncertainty in a sector already plagued by the government's refusal to meet upstream cash commitments, and by a refinery system so dilapidated that there is rising popular unrest over fuel shortages. ''There is a dynamic contradiction between Nigeria's wish to increase its reserves and its reluctance to stump up the necessary money,'' said Andrew Hayman of Geneva-based Petroconsultants. ''Nigeria's deep offshore stands head and shoulders above the rest of West Africa as an oil play, even the big finds in Angola'' echoed Andrew Latham of Edinburgh-based Wood Mackenzie. "But internal problems are severely limiting investment." Nigeria's nearly two million barrels per day (bpd) of crude exports puts Africa's biggest producer seventh in the world league export table. Foreign firms complain bitterly that they could easily double output if the money was made available. Yet few believe there will be any rapid improvement in the situation, especially as Nigerian revenues have been slashed this year by the world oil price depression. ''The central problems will remain the same,'' said Wood Mackenzie's Latham. Familiar problems reared their head this year after the foreign operators such as Mobil Corp (MOB - news), Royal Dutch Shell (RD.AS)(quote from Yahoo! UK & Ireland: SHEL.L), Chevron Corp (CHV - news) and Agip SpA (AGIS.CN) who partner state National Nigerian Petroleum Corporation (NNPC) submitted plans for $3.5 billion of NNPC investment. They were angry at an official budget allocation of only $2.5 billion, and frustrations have increased as actual NNPC contributions so far put it on course for only $2 billion this year, analysts said. NNPC's failure to pay its way has renewed threats from foreign firms that they will cut back drilling. But Shell, Mobil and Chevron all said that operations have so far not been affected by the change in leadership Foreign firms will be watching closely to see how Abubakar's elevation affects the balance of power between Oil Minister Dan Etete and Finance Minister Anthony Ani, who have used joint venture payments as the focus for a simmering personal battle. Ani has withheld funds from Etete's oil ministry amid accusations that money was being squandered, and demands that the finance ministry takes over payment to NNPC contractors. Etete seemed to have lost the argument when sacked in a wholesale November cabinet reshuffle, but was surprisingly reinstated a month later. The change in leadership makes a shake-up likely among the oil management where good contacts are so vital to establishing a presence in Nigeria's oil business. Etete has threatened to strip foreign firms of marginal concessions and award them to domestic investors, arguing that Nigeria should have greater control over its oil industry. This has fuelled accusations of ''cronyism,'' with little-known, but well-connected firms being awarded coveted blocks. Late last month a firm owned by Daniel Kanu, head of political group Youths Earnestly Ask for Abacha (YEAA), was awarded a prized new deepwater license, beating off Esso (XON - news), Amoco Corp (AN - news), Chevron Corp (CHV - news) and Conoco (DD - news), according to Nigerian press reports. Total SA (TOTF.PA) and Petroleo Brasileiro SA (PET.SA) have only been able to secure their recent deepwater licence in conjunction with another little-known local firm, South Atlantic. ''Foreign firms will be hoping that if there is a change of government for the better, the cronyism might be stopped,'' says Petroconsultants' Hayman. Foreign firms have managed to secure production sharing terms, rather than the old joint venture system, for new deepwater licenses, allowing them to provide all the investment and repay Nigeria in profit oil. But the government's delay in finalising terms for prospecting firms has prevented development of discoveries such as Shell's Bonga find. Nigeria's downstream sector is also in a mess with only one of its under-funded, run-down plants -- the 150,000 bpd New Port Harcourt refinery -- now operating reliably. This has left Nigeria's 104 million population chronically short of fuel in recent months, despite the country's huge energy wealth. The chaos has sparked civilian protests and heavy gasoline and diesel imports. --------------------------------------------------------------------------------