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

To: ron peterson who wrote (24875)	6/28/1998 9:11:00 AM
From: P.Prazeres	Respond to of 95453

Mexico confident oil cut accord will be respected MEXICO CITY, June 26 (Reuters) - Mexico's Energy Minister Luis Tellez said on Friday he was confident that oil-producing countries will comply with supply cuts agreed to by OPEC members this week in a bid to boost flagging oil prices. ''I am sure the different countries will comply with what they have committed themselves to,'' Tellez said at a news conference. Oil monopoly Petroleos Mexicanos (Pemex) said in a document distributed to reporters that it had programmed crude exports of 1.644 million barrels per day for the rest of the year. This complies with its commitment to slash exports by 200,000 bpd, compared with first-quarter exports of 1.84 million bpd, it said. Pemex chief Adrian Lajous reiterated that Mexico was strictly complying with its export cuts, but said rising internal demand prohibited it from slashing production as such. Mexico, together with Organization of Petroleum Exporting Countries members Venezuela and Saudi Arabia, spearheaded a second round of output cuts by oil-producing nations in an effort to boost flagging oil prices. Saudi Arabia surprised the market by saying it believed some of the countries that agreed to the cuts would cheat. Mexican officials, however, said they were sure all would comply with their commitments.

To: ron peterson who wrote (24875)	6/28/1998 9:16:00 AM
From: P.Prazeres	Respond to of 95453

FOCUS-Kuwait seen setting foreign oil role by summer's end By Ashraf Fouad KUWAIT, June 26 (Reuters) - Kuwait is moving closer to a major oil policy change that would eventually open potentially lucrative drilling operations to huge foreign oil companies, which have been patiently waiting in the wings since the 1991 Gulf War. Kuwait controls slightly less than 10 percent of the world's proven oil reserves, which will last it more than 100 years at current production levels. As of July 1, Kuwait's oil production will drop to 1.96 million barrels per day (bpd) from 2.19 million bpd earlier this year as part of a collective effort by the Organisation of Petroleum Exporting Countries to boost world prices. Kuwait ''is still studying the formulae on offer and how to go about it (foreign participation)...A response is expected by the end of the summer,'' a senior executive familiar with official thinking told Reuters. Kuwaiti officials and Western oil executives told Reuters the Gulf Arab state was eager to grant foreign oil companies some role in its oil industry to boost production capacity, but it is still searching for a formula acceptable to both the country's sceptical parliament and foreign bidders. While some MPs stress that production sharing violates the constitution, industry executives say formulae under discussion would work around that limitation. The much-awaited move was at the centre of separate high-level talks earlier this month in Kuwait by John Browne, the chief executive of British Petroleum Co. Plc (quote from Yahoo! UK & Ireland: BP.L), and Richard Matzke, president of Chevron Overseas Petroleum Inc., a unit of U.S.-based Chevron Corp. (CHV - news). BP and Chevron are just two of many foreign firms eager to secure a role in the fully state-controlled local oil production operations in Kuwait. Mainly ''Exxon (XON - news), Shell (RD.AS), BP, Total (TOTF.PA), Chevron presented ideas for a role and a formula, but they did not include details. We have not reached that stage yet but we are getting there,'' said an official, who asked to not be identified. For Kuwait, providing a role for foreign firms in the country's oil production is key to securing needed technology to implement a plan estimated to cost some $13 billion to raise production capacity by one million bpd early in the next century from a current 2.4 million bpd. International hopes for a role in Kuwait's upstream operations, including oil fields close to the northern border with former occupier Iraq, were renewed last year when the country's highest oil policy decision-making body gave its approval in principle to foreign participation. Twice before, in 1993 and 1995, Kuwait's Supreme Petroleum Council gave a similar approval. Sources told Reuters that market talk of a joint Chevron-BP offer was not ''exactly correct'' nor did Kuwait officially ask them to make such an offer. Western executives and diplomats here say Chevron and BP are the front-runners in the race, noting that Washington and London led the 1991 Gulf War to free Kuwait of Iraq's occupation that began in August 1990. State-owned and -controlled Kuwait Petroleum Corp. and its upstream arm Kuwait Oil Co. brought in Coopers & Lybrand to help in ''evaluating international agreements and study the formulae. What they (foreign firms) have presented is slightly different from one another, but they are still general ideas. ''Talk linking BP and Chevron probably came from the fact that they both showed interest in the northern fields. That is the similarity,'' a senior official added. Kuwait explained to its Western allies that the decision was a ''difficult political'' move, both on the domestic and international fronts. ''We want many firms to get involved,'' said the official, adding that Kuwait has yet to decide on whether to take the international tender approach or direct negotiations with firms it favours dealing with. ''They (foreign firms) told us, 'If you have difficulty, why not think of the consortium option to make things easier?'...When we look around us, we see that consortia now are the standard practice in the oil industry,'' the official said. --------------------------------------------------------------------------------