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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (13985)	12/2/1998 6:43:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / OIL & GAS Merger Mania Calgary Sun CONDITIONS RIPE FOR MORE OILPATCH DEALS The record-breaking merger between petroleum titans Exxon Corp. and Mobil Corp. will likely touch off a string of other blockbuster deals in the industry. And Canada is not immune. Analysts say the conditions are ripe for more monolithic marriages -- and some could involve Canadian firms. When asked if that means Calgary could be hit by waves of layoffs, analyst Carol Crowfoot replied, " I hope not. "But cashflow of companies has been hurt significantly (by low oil prices) and that affects their budgets," said Crowfoot, senior energy economist for Gilbert Laustsen Jung Associates Ltd. in Calgary. Houston-based Exxon announced yesterday it will take over rival Mobil of Fairfax, Va., for $77 billion US forming the world's largest petroleum company. Exxon has said it is buying Mobil to reduce its costs by eliminating overlap and shrinking its payroll. Some analysts have suggested job cuts worldwide might reach 20,000 -- or 16% of the companies' combined workforce of 123,000. Exxon owns 69.9% of Imperial Oil Ltd., Canada's largest oil producer and operator of thousands of Esso stations across the country. Toronto-based Imperial has 7,000 employees while Calgary-based Mobil Canada has 950 employees. Merger mania was touched off by the first blockbuster deal between British Petroleum PLC and Amoco Corp. last August. Two European petroleum giants -- French petroleum company Total and Belgian refiner Petrofina -- also announced an $11.8-billion merger yesterday to form the world's fifth-largest company. Plunging oil prices, now at their lowest in 12 years, are battering bottom lines of companies and have prompted investors to dump oil shares for safer havens. That leaves those companies unable to raise cash to exploit lucrative but expensive oilfields vulnerable to larger companies with light debt loads. And the sagging loonie makes Canadian companies potential targets, said Judith Dwarkin, vice-president of global energy for the Canadian Energy Research Institute.

To: Kerm Yerman who wrote (13985)	12/2/1998 6:46:00 AM
From: Kerm Yerman	Read Replies (2) \| Respond to of 15196

IN THE NEWS / Mobil Canada's Project Up In The Air, Say Experts EDMONTON SUN What about the Kearl oilsands upgrader? Analysts disagreed yesterday and company spokesmen said they don't know what will happen to Mobil Canada's proposed $1-billion oilsands mine near Fort McMurray and $1-billion to $1.5-billion bitumen upgrader project in the wake of its parent company's merger with Exxon. Exxon's Canadian company, Imperial Oil, is now in public hearings for expansion of its Cold Lake heavy oil project. It also owns 25% of Syncrude Canada, which is to open its Aurora oilsands mine expansion by 2001. Analysts said the merger means spending plans by the two companies will be reviewed. "Projects will be prioritized around the world," said Rick Roberge, senior vice-president of the oil and gas group at PricewaterhouseCoopers. "An oilsands project fits in with Exxon's current strategy and, at this point, no one has any reason to believe Mobil's oilsands will be in jeopardy." But Ian Doig, oil analyst and publisher of Doig's Digest, thinks Kearl may be in doubt. "Syncrude is going ahead and Imperial is part of that," said Doig. "Imperial is going ahead at Cold Lake. So, although Mobil's talked the talk, I don't think they're really going to walk the walk with Kearl. "They certainly weren't going to walk that walk 100% on their own, so I would think that's going to become a casualty." The Kearl project still has no corporate sanction or regulatory approval, said Mobil senior public affairs officer Sharon Dey from the Fairfax, Virginia, head office. Plans will be reviewed in the wake of the merger, she said. Mobil has 950 Canadian staff, including about 200 at it Hibernia and Sable Island projects in Eastern Canada, and 750 more in Western Canada, most in Alberta, said Dey. The Kearl project now has about 25 staff, she said. Pius Rolheiser, Imperial Oil spokesman in Calgary, said it's too early to say what will happen to its Alberta plans. Esso employs 1,500 Albertans.