INTERNATIONAL BITS AND PIECES
U.S. Won't Push Saudi Arabia To Open Oil Sector
During this week's U.S. visit of Saudi Crown Prince Abdullah, the Clinton administration won't pressure him to open Saudi Arabia's energy sector to more foreign investment, especially by U.S. oil companies, White House spokesman Mike McCurry said Thursday.
Prince Abdullah, the heir to the Saudi throne, has invited top executives from major U.S. oil companies to meet with him this weekend. Industry observers speculate the kingdom may be ready to discuss liberalizing its state-controlled oil industry.
McCurry said that while ''it's not surprising'' that oil executives attending the meeting may raise ''those concerns and discussions'' about allowing foreign energy investments, the administration will not be pushing the issue.
''I don't think we will be in a position to suggest specific (Saudi) regulatory policies,'' McCurry told reporters during the White House daily press briefing.
''We will certainly stress the importance that the Kingdom of Saudi Arabia plays in the world oil market, and we will recognize that the Kingdom of Saudi Arabia must be a secure and reliable supplier of natural resources, especially to the United States,'' McCurry said.
Saudi Arabia holds about 262 billion barrels of oil, equal to a quarter of the world's proven crude reserves, and is a key oil supplier to the United States.
Weak oil prices have reduced the country's crude earnings, which account for about 75 percent of state revenues, by one-third this year to $29.4 billion and strained its finances.
The kingdom has slashed budgets by 10 percent across government ministries and is in the process of privatizing postal and communications sectors. The oil sector, however, has been considered of such strategic importance that it has remained closed to private ownership, even while other Middle East Gulf and OPEC members have opened up their sectors.
Allowing more foreign investment in its energy sector would bring in additional revenue for the kingdom and free up some government spending.
Some analysts believe there is a better chance Saudi Arabia would allow foreign companies to take part in natural gas development before the country would open its oil sector.
''It would be a turnaround of phenomenal proportions,'' said Raad al-Kadiri, Middle East analyst at Petroleum Finance Co. in Washington. ''There are certainly other moves they could take, short of selling off any oil assets.''
Those executives confirmed to attend Saturday's meeting with the prince, which is taking place at the Saudi ambassador's residence in Washington, are from Mobil Corp. (NYSE:MOB), Chevron Corp. (NYSE:CHV), Phillips Petroleum Co. (NYSE:P), Texaco Inc. (NYSE:TX) and Atlantic Richfield Co. (NYSE:ARC).
Conoco Inc., a unit of DuPont Co. (NYSE:DD ), Exxon Corp. (NYSE:XON) and Occidental Petroleum Corp. (NYSE:OXY) also have received invitations.
Nigerian Ethnic Clash Over Oil Prospect Kills 23
Clashes between ethnic rivals in southern Nigeria over land believed to contain oil have killed at least 23 people, local newspapers said on Thursday.
The papers said the clashes between Ijaws and Ilajes were concentrated in the Apata district on the fringe of Nigeria's oil-rich region where more than two million barrels of crude per day are produced.
"Many people have died in the clashes. Maybe about 23 people have been recorded but we are trying to get the exact figure," the independent newspaper Vanguard quoted the police commander in the Ondo State capital as saying.
Papers said villagers who fled the fighting saw dozens of bodies floating in the waterways.
Nigeria is increasingly beset by bloody disputes between local rivals battling for natural resources. The West African country has a population of at least 104 million people, from more than 200 ethnic groups.
Georgia and Azerbaijan Sign Oil Pipeline Protocol
Georgia and Azerbaijan have signed a protocol on building a major oil pipeline across Georgia, the president of the Georgian International Oil Corporation said on Thursday.
"This document means that if Azerbaijan chooses the Baku-Ceyhan route as the main pipeline for transporting Caspian oil to world markets, it will definitely go through Georgia," Gia Chanturia told Reuters.
The route from the Azerbaijan's capital Baku to the Turkish Mediterranean port of Ceyhan is favoured by many involved in producing oil in the Caspian basin, a major new frontier for international energy firms.
Chanturia said a similar document had recently been signed by Azerbaijan and Turkey.
The final decision on building a huge new pipeline, called the Main Export Pipeline, to pump Caspian crude to world markets is due to be made by the end of October.
There has been speculation among industry officials, as well as western diplomats in Azerbaijan, that a decision on the huge new pipeline may be delayed well into next year.
This has been attributed in part to depressed world crude prices and political instability in Russia, perceived as possibly affecting Azerbaijan, although Baku has said Moscow's financial and political woes have limited impact on it.
"We are still eyeing an October deadline for the final decision and hope the Baku-Ceyhan route will be chosen," Chanturia said.
John Leggate, President of the $8 billion Azerbaijan International Operating Company (AIOC), a British Petroleum-led 12-member consortium said in Baku last week he also thought the October deadline would be met.
Azeri President Haydar Aliyev has regularly voiced Azeri support for the Baku-Ceyhan route, vigorously supported by the United States and Turkey.
Chanturia said the cost of the project would be about $3 billion. The annual capacity of the pipeline is estimated at 50-60 million tonnes (1.0-1.2 million barrels per day) of oil.
Other possible routes are from Baku to the Georgian Black Sea terminal at Supsa and to the Russian Black Sea port of Novorossiisk.
Members of the AIOC consortium are: BP Amoco (34.1367 percent); Unocal Corp. (10.0489 percent); Exxon Corp. (8.0006 percent); Pennzoil Co. (4.8175 percent); Turkish Petroleum (6.75 percent); Delta Oil (1.68 percent); Ramco (2.0825 percent); LUKoil LKOH.RTS (10 percent); Statoil (8.5633 percent); Itochu (3.9205 percent), and SOCAR (10 percent).
There are other nearby concessions with Canadian Interests.
Colombian Oil Pipeline Bombed 62 Times This Year
Colombia's Cano Limon-Covenas oil pipeline, which was shut down Thursday after another rebel bomb attack, has been crippled by 62 bombings so far this year, according to state oil company Ecopetrol.
That's just four shy of the record 66 bombings on the 460-mile (700-km) pipeline in all of 1997-- and a tie with the previous record of 62 attacks in 1994.
The pipeline carries Cano Limon crude to the Caribbean lifting terminal of Covenas. Since it came into operation in late 1985, the pipeline has been blasted 563 times.
In addition to severe ecological damage, repair costs have been estimated at about $250 million and the value of lost crude oil output is placed at more than $1.5 billion.
An Ecopetrol spokesman said the latest attack, the second this week, occurred at 1:30 p.m. local time (1830 GMT) on Wednesday, in an area near the sprawling Cano Limon oil field operated by U.S.- based Occidental Petroleum Corp. (OXY.N) in northeast Arauca province.
Between 4,000 and 5,000 barrels of Cano Limon crude were believed to have been spilled in the blast, which was the work of suspected Revolutionary Armed Forces of Colombia (FARC) rebels, the spokesman said.
The Marxist-led FARC is the largest and oldest guerrilla army in the hemisphere.
An Occidental spokesman said it was not immediately clear how the latest bombing might affect output from the field.
But production-- which has to be cut during any prolonged pipeline closure because of limited onsite storage capacity -- was only cranked back up to a daily average of about 150,000 barrels Wednesday morning, after repairs to a section of the line ruptured in a bomb attack Sunday afternoon.
"We don't know the exact situation at the moment, but certainly there is a great deal of concern," said the Occidental spokesman. "It's not looking good."
Spokesmen for both Occidental and Ecopetrol said repair work on the damaged segment of the pipeline had still not gotten under way, as of late Thursday afternoon, because the military was securing the area where the attack occurred.
Ecopetrol said the military feared that rebel landmines may have been planted in the area around the ruptured section of the tube, something that could cause extensive delays since it would prevent any repair crews from moving into the area until a mine- sweeper was sent in.
Wednesday's attack occurred as the leftist and fiercely- nationalistic state oil workers' union, known as USO, was joining in a 48-hour strike by public sector employees against the government's call for economic austerity measures.
But Ecopetrol said there was not believed to be any link between the strike and the pipeline blast.
Amoco Finds More Oil, Gas Off Trinidad Coast
Amoco Corp. said on Thursday its Trinidad and Tobago unit discovered more natural gas and crude oil off the east coast of Trinidad, near other recent successful exploration sites.
Amoco, which agreed last month to merge with British Petroleum Co. Plc (UK & Ireland: BP.L), said in January its Trinidad division made its largest crude oil discovery in 25 years with estimated oil reserves of 40 million to 70 million barrels.
In this newest discovery, Amoco said the well identified 870 feet of gross oil and gas pay in 11 different productive zones, according to a statement the company issued from Port of Spain, Trinidad and Tobago.
The 11 zones are the most that Amoco has had in any exploratory discovery in Trinidad. Preliminary estimates for recoverable resources are 750 billion cubic feet of gas and 25 million barrels of oil and condensate.
The Parang well is located 43 miles (70 km) southeast of Galeota Point in water depths of 230 feet, and was drilled to a depth of 12,164 feet. No tests were performed on the identified pay zones.
On Thursday, Amoco's stock fell 13/16 to 55-7/8 in composite New York Stock Exchange trading.
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