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

To: Tomas who wrote (45692)	5/30/1999 11:27:00 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Financial Times World Energy: Volatility has long been a watchword for the international petroleum industry. But the extreme swings in sentiment that have affected the sector over the first three month of this year have rarely been seen in such a short period. In January and early February the gloom that had settled over world oil markets for much of last year seemed impenetrable. Oil executives spoke bleakly of prices having "entered a new paradigm", the buzz phrase for a possibly prolonged period of oil price deflation. The World Bank detected "evidence of a fundamental break in the level of commodity prices, due to rapid advances in technology and declining costs of production". The gloom deepened as the western world's biggest integrated oil companies began reporting sharp slides in profits, deep cuts in capital spending and large-scale redundancies. Many projects that had not been marginalised by low crude prices were delayed. In many oil-producing countries national budgets came under renewed pressure. There were warnings of possible civil unrest in the most vulnerable countries if prices stayed depressed. The only bright spot was the strong performance of the US economy, the world's biggest petroleum market. But even its buoyant economic growth failed to offset the collapse in oil demand in Asia and elsewhere. As the weeks passed and oil prices showed no signs of improving, fears grew that they could plunge even further as members of the Organisation of Petroleum Exporting Countries continued to squabble over production cuts agreed last year. "Earlier this year we were in imminent danger of a global price war that would have had terrible consequences for our [Opec] countries," says Ali Rodriguez, the Venezuelan oil minister. "It could even have been worse than many belligerent wars." Intense diplomacy by Saudi Arabia, the world's biggest oil producer and exporter, helped bring the oil world back from the brink. The elation with which oil producing countries and companies welcomed the agreement in the Hague in March that paved the way for a new round of global production cuts was more than understandable. ... A survey of 94 oil companies conducted by Robertson Research, a UK-based oil consultancy, suggests oil companies have lost none of their ardour for securing access to low-cost oil reserves, especially in the Middle East. It shows a sharp rise in interest in Iran, Saudi Arabia and Kuwait, even though the last two countries still do not allow direct foreign investment in their exploration and production sectors, but are studying the possibility. The long-term intentions of such producers has provoked intense debate within western oil companies. Some - including those that are keen to invest in Kuwait and Saudi Arabia - say they would view the opening of those oil industries as an admission by two of the world's leading producers that long-term prices are likely to fall. "Unless they believe that world demand will pick up at quite a rate and over a long time, they simply don't need to add capacity," says one European executive who monitors the region. Another indirect clue to possible long-term price perceptions will be whether the wave of consolidation in the US and European industry continues: "You cannot underestimate the sheer exhaustion that many chief executives feel at having to cope with low oil prices," says one merchant banker. For those companies with extensive exposure to high-cost areas, "the relentless pressure to consolidate" might prove overpowering if the current upward price trend stalls. The threat of a slow death that faced a large chunk of the world's oil industry at the start of the year may have receded. But the depth of the downturn is likely to leave lasting impressions and more than a few scars on the industry. Financial Times World Energy, April issue

To: Tomas who wrote (45692)	5/31/1999 4:32:00 PM
From: BigBull	Read Replies (1) \| Respond to of 95453

Thomas, good digging, man. Ever since the thread got wind of the damage to Iraqi fields, I've wondered about exact numbers. Your post is a beginning in getting a clearer picture of the situation in Iraq. The following statements in the article caught my attention. 1. 20% of Iraqi wells damaged irreparably. 2. 4 - 8% of Iraqi production has been lost. 3. Less 500,000 bpd for internal consumption, Iraq may be capable of only 2 mill bpd. 4. As long as sanctions are in place the situation will get worse, not better. Iraqi's can talk all they want about increasing production to 3.5 mbpd in two years, but the facts on the ground strongly suggest that this is only a dream. They may not even be able to produce 2.5. arabia.com