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

To: Tomas who wrote (44976)	5/19/1999 9:10:00 AM
From: Tomas	Read Replies (2) \| Respond to of 95453

The North Sea: UK oil has lost gloss - warning. Halliburton Aberdeen Press & Journal, May 19 OIL companies will not be keen to take the shackles off their spending until they see a convincing recovery in oil prices, the North Sea community was warned yesterday. Speaking at a UKOOA Energy Breakfast in Aberdeen, Halliburton Energy Development president, Norman Chambers said the pain currently being inflicted on the contracting community could well extend into 2000. And he warned that the North Sea had in any case lost its gloss as an attractive place to invest. Other energy provinces were emerging as better bets. "My view is that higher oil prices will have to be sustained for some considerable time, increasingly influenced and supported by demand, before oil and gas companies will increase their spending," said Mr Chambers at the UK Offshore Operators Association session. Leaving aside the vagaries of the oil markets, he said industry consolidation also had a part to play in making trading conditions tougher and that the era of the supermajor had dawned ... referring to BP Amoco, the Exxon/Mobil merger and the possible marriage of Chevron to Texaco. As for super-contractors Schlumberger and Halliburton, they arguably supplied a greater breadth and depth of services than any others. "So a case could be made that the larger companies will have a disproportionate influence on the industry. It seems likely that consolidation will restrict the expenditure of money in a low oil price environment. "But I do not subscribe to the view that there will be no room for smaller companies." Mr Chambers admitted this was in part because most of the world's oil and gas reserves were in the hands of state companies and not the multinationals. However, small and medium firms also had a place in the game plan of the multinationals and big contractors. "I cannot imagine a future that does not include us actively fostering, supporting and partnering with SMEs in a mutually beneficial manner." Homing in on North Sea investment prospects, Mr Chambers said "significantly less" money would be spent than in the past. "On one level, the returns for new oil developments simply are not here - reserve potential is too low - finding and lifting costs are too high. "Investment would look for higher, risk adjusted returns elsewhere. "However, I think it is premature to say that the North Sea chapter is closed. Clearly production will be extended as long as economically feasible." He urged the North-east offshore community to grasp new opportunities in the new business landscape, after all the oil and gas industry was hungry for skilled professionals and companies with good ideas and technologies to offer. pressandjournal.co.uk