APPEA chief blasts internet investors, Aussie energy policies
Australia's petroleum industry has warned that the investment community's "love affair" with high-risk internet stocks could cause a plunge in exploration and production expenditures that might ultimately lead to declines in oil production, disruptions to supplies, worsening of national accounts, and a compromised position on greenhouse gas emissions.
Speaking on the eve of the 40th annual Australian Petroleum Production & Exploration Conference (APPEA) in Brisbane, the association chairman, John A. Crum-former managing director of Apache Energy Pty. Ltd. (AEPL), Perth-added that the industry is also being put at risk by the Australian government's inaction over a number of legislative problems that are driving exploration dollars overseas.
Crum said the lack of interest in the oil sector from investors means that the value of assets in the industry has decoupled from the oil price. This underlines a great irony, he says: While investor interest has fallen off, local oil companies have never had it better, in terms of commodity prices and profit levels.
APPEA says the focus of fund managers on maximizing short-term rates of return has had a detrimental effect on the attractiveness of the oil and gas industry as a place to invest. This undermines shareholders' returns, compromises the attractiveness of farmin projects, and leads to a drying up of risk capital.
On government inaction, Crum said that the industry does not know the rules that now apply to oil exploration. The native title impasse in the Senate has to be resolved within weeks, not months, he said. He added that there has been a lack of guidelines provided to the oil and gas industry over new legislative moves in environmental conservation and corporate tax regimes (see Government Trends, Newsletter, p. 7).
The root of the problem, he said, is that the federal and state governments continue to treat energy policy as a subset of other industry policy. All these things add to the risk of doing business in Australia at a time when there is strong competition for exploration dollars in other countries.
Apache changes
Crum was recently promoted to the newly created position of executive vice-president, Eurasia and new ventures. He will return to the US after serving 5 years as managing director and regional vice-president of AEPL. Crum will oversee Apache's Western Australia, Poland, and China regions as well as the company's new ventures group. Also at Apache, H. Craig Clark has been promoted to executive vice-president, US operations, of Apache Corp., Houston. He was a regional vice-president and CEO of ProEnergy, formerly the oil and gas marketing affiliate of Apache. Clark will be responsible for exploration and production activities in the company's Midcontinent, southern, and offshore regions. Lisa A. Floyd has been promoted to executive vice-president, business development and E&P services. Floyd joined Apache in 1984 and has held numerous technical and managerial positions in the company, including vice-president of technical services. Her current position includes leadership of the company's business development activities and E&P services, including corporate reservoir engineering, and crude oil and gas marketing. Roger B. Plank has been promoted to executive vice-president and CFO. Plank joined Apache in 1981, and has served as vice-president and CFO since 1997.
Other moves
In other personnel news, Robert F. Unger of Marathon Oil Co. has been appointed secretary of the Oklahoma Energy Resources Board. He is regional manager of Marathon's central production region in Oklahoma City. Unger was appointed to the board in 1989 and replaces James Bass as secretary.
Todd A. Boortz has joined Dallas-based Crosstex Energy Services Inc. as vice-president. He served most recently as engineering manager of LG&E Natural & Processing Co. Prior to that, Boortz held positions as facilities manager with Highlands Gas Corp. and as operations engineering manager with Delhi Gas Pipeline Corp. Rodney A. Madden has been promoted to vice-president, producer services, at Crosstex. He was manager, producer services. Prior to that, Madden served as vice-president for Box Energy.
Charles W. Adcock has been promoted to the new position of senior vice-president, operations and engineering, for Houston Exploration Co. (HEC), Houston. He was vice-president, project development. Adcock joined the company in 1993. Michael J. Simon has joined HEC as manager, offshore operations. Prior to that, he served more than 20 years with Sonat Exploration Inc. in various operating capacities. Joanne C. Hresko has been named manager, onshore operations, at HEC. She will oversee the company's onshore operations in South Texas, South Louisiana, Arkoma basin, East Texas, and West Virginia.