INTERNATIONAL SKOPE AT THE KORNER
OPEC Chief Calls For Greater Cooperation With Oil Companies
The member states of the Organisation of Petroleum Exporting Countries (OPEC) and the world's oil companies should cooperate more, OPEC secretary Rilwanu Lukman said at a conference Saturday.
Speaking at a gathering organised by the US Petroleum Finance Company, Lukman said that with the fall in oil prices "people are starting to realise it's not merely a problem for producers or a problem for consumers, and that's a very healthy development."
But Lukman refused to comment on OPEC policy with regard to the continued price slump ahead of the group's next meeting in Vienna in November. "I can't say if we'll study new cuts," he said in reply to repeated questions.
The president of the Petroleum Finance Company, Robinson West, said that the closed door conference had agreed not to discuss oil prices, and that an American lawyer was on hand to ensure it did not.
Some 15 top officials of the world's leading oil companies, including Chevron of the United States, France's Elf, Italy's ENI and Lasmo of Britain, attended the conference.
West said there was "no effort to reach a consensus, but exchanges of ideas, on evolution of the industry and its repercussion on society."
Participants were reportedly divided on continued concentration in the oil sector, in the wake of the recent Amoco-BP merger, with West saying they were "not sure that bigger is better."
ENI chief Franco Bernabe said that in fact the oil industry was alone in deconcentrating, with excellent results. While at the beginning of the 1970s the six leading oil groups controlled 60 percent of production, today the 20 main groups controlled no more than six to seven percent.
In the future, "success will go to companies well focussed" on their markets, he predicted.
Bernabe was pessimistic about the immediate future, however, saying that "financial instability has lowered demand. I don't see any improvement in the coming months."
Oil Majors Wind Up Secretive Venice Talks
Glum oil companies feeling the heat from a global economic downturn gathered for a second day of secretive talks in Venice on Sunday, insisting that such taboo subjects as prices and mergers were still strictly off the agenda.
After Saturday's "vigorous talks" on industry restructuring, oil barons including world giant Saudi Aramco barricaded themselves behind the walls of a Venetian convent away from the glare of the media to conclude their two-day informal assembly.
The heads of some of the industry's most powerful petroleum concerns decided to pack their bags early, skipping the final day's talks on the environment -- no doubt angering Greenpeace, who turned up as an uninvited guest.
On Saturday, the group of 15 public and private sector firms had what organisers described as lively discussions on upcoming privatisations and investment openings, new technology and energy geopolitics.
Participants were quick to squash any hint of anti-consumer conspiracy -- an ongoing industry theme which has been scrutinised by U.S. and European regulatory authorities.
But few were eager to open up to the media about the talks, casting a veil of mystery over the unusual meeting steered by the Petroleum Finance Co, a Washington D.C. consulting firm.
Aramco President Abdullah Jumah, arguably the world's most influential oil industry executive, was particularly eager to stay silent during the weekend.
"We have decided not to talk to the press at this meeting and so I can't answer any of your questions," Jumah, who left early on Sunday, told Reuters.
Mergers and acquisitions -- a hot industry topic after the announcement of a planned mega merger between British Petroleum and Amoco -- stayed off the agenda.
And despite the pressure on revenues from the effects of a slump in prices, this was also a taboo subject for oil barons who were kept in check by the presence of an antitrust lawyer.
However, there was a consensus among U.S., European, African and Middle Eastern firms that oil oversupply looked set to continue.
But despite this oversupply, Italy's ENI Chief Executive Franco Bernabe commented that private and commercial openings meant there were investment opportunities galore.
Top of the list is a mouthwatering array of resources, particularly in the Gulf. European companies are keen to meet the Saudis after Crown Prince Abdullah invited top executives from major U.S. companies to meet him, Bernabe said.
Adding a lighter touch to the conference was Greenpeace, whose activists stormed the secluded island where executives were meeting on Saturday but were swiftly escorted back to the city.
Karachaganak Oilfield (Kazakhstan) Output Falls Due To Russian Crisis
Oil production at the Karachaganak oil and gas field in northwestern Kazakhstan has been cut by about two-thirds due to the Russian financial crisis, a vice president of the U.S. oil giant Texaco said Sunday.
"On a barrel per day basis, we were producing upwards of 60,000 barrels a day and we're down to less than 20,000 now, and we're going to stay that way for quite a while," said Larry Andersen, who attended the opening of Texaco's first gas station in Almaty.
The field, which exports its oil to Orenburg, Russia, was expected to produce three to four million tonnes of oil annually before the production cutbacks occurred two weeks ago, he said.
"We can't continue to sell products into Russia and not get paid," he said.
While Texaco is waiting for the Caspian Pipeline Consortium's pipeline to come on line, carrying crude to world markets via the Black Sea port of Novorossiisk, the company will look for other means of exporting small amounts of oil, Andersen said.
One option is to transport about a half million tonnes of oil per year by railway and ship it across the Caspian Sea to Baku, Azerbaijan, he said.
Despite the decrease in production, Texaco plans to invest more than two billion dollars in the next four years into Karachaganak, which is co-owned by British Gas, Italy's Agip and Russia's Lukoil, and 500 million to one billion dollars in the North Buzachi field, which Texaco and Saudi Arabia's Nimir Petroleum purchased on September 23.
Texaco also is looking at some off-shore oil exploration tenders in Azerbaijan, Andersen said.
Andersen is among the first of hundreds of oil executives expected to arrive in Almaty this week for the three-day Kazakhstan International Oil and Gas Exhibition.
Oil Production to Slide in Russia but Not Export
Oil production will slide in Russia this year as a result of the financial and economic crisis. However, its export will remain at the planned level, Russian Minister of Fuel and Energy Sergei Generalov told reporters here on Sunday. He is a member of the Russian delegation, participating in the annual session of the International Monetary Fund and the World Bank in Washington.
According to Generalov, oil companies were forced to cut considerably investments in the development of their enterprises. As a result, the volume of recovered oil will slip to 296-298 million tonnes in 1998 as against 305 million tonnes in 1997. The minister noted that this trend may persist next year too.
He noted at the same time that the export of crude in the fourth quarter is to remain at the planned level of 28 million tonnes, although its small drop is expected in the latter half of the year as a whole. "It is impossible technically to export more than 110-111 million tonnes of crude annually," Generalov stated. "Therefore, I believe that there will be no boost in the export."
Thailand's Petroleum Demand Declines
Kerm's Example Of Far East Demand For Crude & Why He Feels The Far East Is Key For Oil Markets Recovery
Thailand's petroleum demand fell by 8.6 percent during the first eight months of this year compared with the same period last year to 872,270 barrels per day (BPD), The Nation reported Saturday.
Demand for oil production was down 11.8 percent to 662,310 BPD.
Kerosene consumption shrank the most - by 36.3 percent to 1 ,000 BPD - followed by lubricants, which fell 27 percent to 4,540 BPD.
Diesel oil demand, which represented roughly 40 percent of the nation's oil consumption, plunged 17.6 percent to 264,290 BPD. Fuel oil, mainly used by the manufacturing and power sectors, was down 11.6 percent to 143,920 BPD.
Thailand's oil import bill during the period was down 8 percent to 104.39 billion baht (2.6 billion U.S. dollars), comprising finished oil import which plunged 66.4 percent to 3.86 billion baht (96.5 million U.S. dollars) and crude oil import which dipped 1.5 percent to 100.54 billion baht (2.5 billion U.S. dollars).
By volume, imported finished oil production fell 63.5 percent to just 27,630 BPD and imported crude oil dipped 5.1 percent to 707,150 BPD. |
