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To: Alex who wrote (26358)	1/17/1999 3:09:00 PM
From: goldsnow	Respond to of 116764

North Sea oil crisis It costs more to produce a North Sea barrel than it can be sold for Nearly three quarters of the North Sea's prospective new oil fields are uneconomic, according to a British oil expert. Professor Alexander Kemp has told the BBC's Money Programme that at current world oil prices of around $10 a barrel, only 12 of the 40 new fields he has studied can pay their way. Oil prices have ben severely depressed by the slowdown in the world economy since the Asian crisis and the inability of the Opec producer nations to prevent an oversupply on world markets. In real terms oil prices are at their lowest level in 50 years. It is estimated that 380,000 jobs depend directly or indirectly on the North Sea oil fields. Thousands of job cuts have already been announced by big and small oil companies alike as a result of the downturn. There has ben a big cutback in spending by oil companies which are constantly downwardly revising their spending plans on North Sea projects, said Dr Larry Farmer, president of oil industry equipment supplier Brown and Root. Despite a cost-cutting program by North Sea producers, average costs were thought to be $12 a barrel recently - $2 above the selling price. But Crine, a cost-cutting body in the industry says the true costs are even higher, at $14. This is likely to to prove a further deterrent to already declining North Sea investment and the production at the oilfields is expected to fall away much faster than previously expected. news.bbc.co.uk Business: The Economy North Sea oil crisis It costs more to produce a North Sea barrel than it can be sold for Nearly three quarters of the North Sea's prospective new oil fields are uneconomic, according to a British oil expert. Professor Alexander Kemp has told the BBC's Money Programme that at current world oil prices of around $10 a barrel, only 12 of the 40 new fields he has studied can pay their way. Oil prices have ben severely depressed by the slowdown in the world economy since the Asian crisis and the inability of the Opec producer nations to prevent an oversupply on world markets. In real terms oil prices are at their lowest level in 50 years. It is estimated that 380,000 jobs depend directly or indirectly on the North Sea oil fields. Thousands of job cuts have already been announced by big and small oil companies alike as a result of the downturn. There has ben a big cutback in spending by oil companies which are constantly downwardly revising their spending plans on North Sea projects, said Dr Larry Farmer, president of oil industry equipment supplier Brown and Root. Despite a cost-cutting program by North Sea producers, average costs were thought to be $12 a barrel recently - $2 above the selling price. But Crine, a cost-cutting body in the industry says the true costs are even higher, at $14. This is likely to to prove a further deterrent to already declining North Sea investment and the production at the oilfields is expected to fall away much faster than previously expected.