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

To: marc chatman who wrote (45770)	6/2/1999 10:03:00 AM
From: Crimson Ghost	Respond to of 95453

opec-commentary opec members in strong position to choose partners - bulletin vienna, june 2, irna -- giant oil companies seeking new partners to create mega-mergers are not the only players in the industry on the look-out for a "good fit", according to the latest issue of the "opec bulletin" monthly magazine published here. members of the organization are in a strong position to seek out the right partner for joint ventures since they have a great deal to offer to any partnership, says the magazine's commentary, which is headlined: "matching interests - oil companies are not the only ones looking for a good fit." it says: "as a general rule the heads of oil companies like to harp on the advantages of prospective mergers in terms of what each of the two partners is bringing to the marriage. "sometimes this is a good geographical fit, where strength in one regional market can be complimented by a healthy presence in a different part of the world. "in other cases, it may be a question of a company with some well-placed but under-used refining assets looking to offset a weakness in, say, access to reserves of light crude," the publication, issued here today by the opec secretariat, says. the magazine points out that several members of the oil-exporting group have been following a similar line of development for their national oil companies, for a decade or more. "the sought-after goal is to somehow parlay security of supply into kuwait, saudi arabia and venezuela - have made considerable progress in this direction with their respective overseas downstream activities. "kuwait successfully ventured into european refining and marketing by making well-timed purchases in the 1980s, notably during gulf oil's fire sale of assets. nowadays its q8 service station sign is an established presence along the highways of many cities. "it thus managed to become the first opec member country not only to secure a complete downstream route for a considerable slice of its production, but also to deftly attach its name to the end-product." other members, the bulletin points out, including saudi arabia, through its star tie up with texaco in the united states, and venezuela, linked via its veba and ruhr ventures to both europe and the us, respectively, have also succeeded in pushing all the way downstream. however, the commentary notes that conditions in the industry are not what they were in the mid-1980s, when the kuwait petroleum corporation (kpc) went bargain-hunting, but the wave of mergers that is shaking up the industry clearly shows that an opportunity is there for member countries to drive equally shrewd bargains. "for what opec has to offer above all is its possession of an upstream cornucopia, in the form of over three-quarters of the world's known oil reserves. "and regardless of which estimates for non-opec oil resources are used, these reserves will be productive long after all others are exhausted," the publication emphasizes. "in return for access to a share of this portfolio of assets, opec member countries are entitled to make a reasonable request from the newly-merged would-be partners: they can seek the downstream security they need to maintain a steady flow of revenues, and thus avoid repeating the experience of stop-go budgets. "this phenomenon, which has continually plagued opec's efforts to achieve steady economic development, is the bugbear of all commodity-exporting developing countries. "upstream strength for downstream security - this would make a good fit for any ambitious suitors. opec can deliver on its promises. it remains to be seen what suitable offer the partners can make," the commentary concludes. kz/mhj/hm end ::irna 02/06/99 01:22