Oil spills and tanker safety continue to be the focus of industry's attention following the Mega Borg accident off Texas.
Boycott of U.S. mainland ports by the international tanker business is gaining momentum. Elf Aquitaine has followed Royal Dutch/Shell Group in banning its tankers from U.S. terminals.
Two large independent operators, World-Wide Shipping and A.F. Moller, also are considering withdrawing from the U.S. trade.
Their rationale: fear of unlimited liability in case of a spill in U.S. waters. Elf had been considering the ban before the Mega Borg accident, which accelerated the final decision. Mega Borg was on charter to an Elf subsidiary at the time. Action by Shell and Elf affects only five vessels.
A boycott by independent owners could be more wide ranging. World-Wide has a 70 vessel fleet and six 80,000 dwt tankers working between Venezuela and U.S. East and West coasts. Moller operates a fleet of 40 crude and product vessels.
London insurance sources say the Mega Borg is almost certainly beyond repair and will be a total loss for insurance purposes. A final decision on vessel status will come after surveyors have been on board the stricken vessel, probably later this week. The hull and machinery of the tanker had $16 million coverage in the Norwegian and London insurance markets.
Meantime, the Coast Guard called in cleanup crews, and lightering of remaining crude from Mega Borg was to be completed by midweek last week (OGJ, June 25, p. 26).
The Coast Guard halted flyovers and beach patrols after crews failed to find any further sign of oil in the Gulf of Mexico or more tar balls on Texas beaches.
Texas Land Commissioner Garry Mauro has proposed new oil spill response regulations, entailing among other things tougher lightering standards and support for double hulled tankers.
Petroleum Industry Response Organization has signed up 22 companies. PIRO's cost, after expansion, is pegged at $500 million the first 5 years. Sponsors plan to launch it after Congress decides on details in comprehensive oil spill liability legislation (OGJ, June 26, 1989, p. 18).
Exxon and its shipping unit will go on trial on criminal charges Apr. 10, 1991, related to a five count federal grand jury indictment stemming from the Valdez spill. Convictions could mean fines totaling as much as $700 million (OGJ, Mar. 5, p. 24).
Amoco will appeal a federal judge's preliminary ruling that the company must pay about $160 million in damages for the 1978 Amoco Cadiz spill off France. The judge, who will issue a final ruling July 24, basically followed a special master's recommendations in the case (OGJ, Feb. 27, 1989, p. 38).
A long expected decision by Norway to drop its 5% across the board production cut has had little effect on European oil markets, which are paying more attention to events in the Middle East. In the U.S., growing oil stocks and disappointing gasoline demand continue to pull oil prices down.
Markets are looking for a response to the mission by OPEC Pres. Boussena to the Persian Gulf countries appealing for production restraint, Industry sources say OPEC output fell 500,000 b/d to 23.2 million b/d the first 3 weeks of June. But they contend more restraint is needed because big volumes of Iranian crude still overhang the market.
Norway's move will add 80,000 b/d to its current flow of 1.64 million b/d. Norway introduced a 7.5% cut in early 1987 in a bid to stabilize prices. The center-right coalition government trimmed the cut to 5%, early this year.
Brent for August delivery June 27 reached $16.22/bbl but slipped back to $16.05 vs. $15.75 the day before.
Nymex WTI for August lost the ground it had gained from short covering the end of the previous week, closing at $16.68/bbl June 27, down 78 from June 22. Three refiners dropped WTI postings 75 to $15.50/bbl last week.
USX has approved a major restructuring of its energy segment to cut costs and boost efficiencies in U.S. upstream operations. It will consolidate remaining upstream assets of TXO, Dallas, with Marathon's in Houston. USX expects to sell three regional packages of TXO properties by the end of the third quarter, with unsold assets folded into Marathon U.S. E&P operations. TXO's Delhi Gas Pipeline and FWA Drilling will remain in Dallas and Wichita Falls, Tex., respectively.
Is a gasoline tax closer now that President Bush is willing to accept new taxes to reduce the federal budget deficit?
The declaration, a reversal of Bush's "read my lips" campaign pledge against tax increases, was designed to revive stalled congressional budget talks. Democratic congressional leaders had told Bush they would reduce domestic spending if he would abandon his blanket opposition to new taxes. No specific tax increases have been agreed upon, but several congressional budget negotiators favor a gasoline tax increase.
Another major survey of petroleum geology in the former Soviet bloc is in the offing. Jebco Seismic, Houston and London, in conjunction with the Soviet geology ministry's All-Union Institute for Foreign Countries Geology (VEG), is offering a text and map series review of petroleum geology in eastern Europe based on years of work by VEG geoscientists and presented in a format compatible with western exploration methods.
When the report is released in the fall, VEG authors will tour western Europe and the U.S. as consultants. Jebco is marketing data packages on six large areas in the U.S.S.R. (OGJ, Apr. 9, p. 71), and plans more data releases in the second half.
Saudi Aramco let a 5 year contract to Fluor Daniel to manage a major expansion/demothballing program to boost oil and gas productive capacity in its northern onshore and offshore areas. The contract, value of which isn't disclosed, has options for 4 more years of work. Involved are gas processing plants, pipelines, production facilities, and offshore platforms. Work, still being defined, is to begin in July.
Egypt has banned all new exploration in the Hurghada region of the southern Gulf of Suez and will not confirm three exploration pacts recently signed with Gulf Canada, Deminex and Esso Egypt. However, a Gulf Canada group that discovered Harid oil field in the East Hurghada concession will be allowed to continue with development plans under strict conditions.
Middle East Economic Survey reported the June 14 ban followed expansion of tourism in the area.
Eleven blocks in the Norwegian Barents Sea close to the disputed zone with the U.S.S.R. are attracting considerable attention from potential bidders in Norway's 13th licensing round.
Norway has 52 blocks on offer in the North Sea, off Central Norway, and in the Barents. Applications must be submitted in August, and Norway hopes to makes awards by yearend.
Royal Dutch/Shell is negotiating for a farmout on Oxy's North-west Palawan offshore concession in exchange for a drilling/project evaluation program. Oxy's Camago strike there could hold as much 5-10 tcf of gas and 200 million bbl of condensate (OGJ, Apr. 23, p. 29), but Oxy says other gas finds are needed for a commercial project. Prior to spudding another wildcat, further talks with the Philippines government are needed.
A group planning an NGL pipeline between Sarnia, Ont., and Montreal is considering a U.S. route as a cheaper alternative at $140 million. Quebec's state owned Soquip, Texas Eastern, and Petro-Canada are considering a 211 mile line from Jefferson, N.Y., to Montreal. Original plans called for a $200 million, 516 mile line between Sarnia and Montreal.
Alberta's 1990 production is expected to be 100,000 b/d less than the 1.5 million b/d forecast 2 years ago, says ERCB. Production of light and medium crudes was 6% less than forecast and bitumen 20% short, while additions to reserves from EOR in 1990 will be 6.3 million bbl, 80% below forecast.
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