The oil spill off California should have no bearing on whether to hold offshore lease sales, says President George Bush (see story, p. 30). He has read a task force's report on controversial California and Florida lease sales and should decide "fairly soon" on their future.
Bush said, "The tanker had a hole punched in it, and I see a bunch of guys jumping up and down saying this proves you can't have any offshore drilling...I'm not sure I understand the connection (with) tankers. Do they want to cut off all tankers or do we just want to do our level best to make tankering safer?
" I have said that we're not going to have drilling in highly environmentally sensitive places, but I'll be darned if I think we ought to shut down all offshore drilling everywhere. And I don't see that a spill from a tanker really has much to do with whether you can drill an offshore well safely because it's going on all the time. And this country depends on it."
Meantime, National Ocean Industries Association said the spill shows why the U.S. should proceed with OCS exploration.
NOIA said, "The excellent safety record of the U.S. offshore industries remains intact. The fact that today the OCS safely supplies 13% of our domestic oil and 26% of our natural gas cannot be ignored.
"The fact that the offshore produces predominantly clean burning natural gas, which cannot result in an oil spill, also should not be overlooked. In addition, it should be acknowledged that almost all the oil produced offshore is transported ashore by pipeline, not tankers."
Requiring double hulls on tankers, an issue that came up after the Exxon Valdez spill, was revived as a result of the American Trader spill.
The House of Representatives voted 376-37 to require in a conference committee measure merging Senate and House oil spill liability bills that new and existing tankers be double hulled.
The requirement would not be strictly binding and is silent as to when the requirement would take place and whether large and small tankers would have to be retrofitted. The American Trader spill occurred the day the House voted but wasn't mentioned in debate.
State oil companies that supply crude on a direct-deal basis are still trying to keep pace with a recent upturn in prices.
Japan, one of the biggest direct-deal custom buyers, reported hikes in Mexican Isthmus light to $18.16/bbl and Mayan this year. The work is a spinoff from a seminar at yearend 1989 on use of seismic stratigraphy and sequence stratigraphy on the Barents Shelf and adjacent areas with particular emphasis on the Upper Paleozoic and Mesozoic.
IKU said the joint seismic program will probably lead to a collaborative shallow drilling program on the northern Norwegian and Russian shelves in 1991.
Exports of Norwegian LNG to the U.S. have moved a step closer.
Enron Corp. and a Norwegian group led by Den norske stats oljeselskap AS agreed in principle on a 20 year contract to export 88 bcf/year of gas using a price -formula that links imported LNG to U.S. market prices.
Enron, Statoil, Norsk Hydro, and Saga Petroleum will negotiate for access to one of four U.S. LNG import terminals and complete a deal for two new 125,000 cu m gas carriers.
Project start-up is between 1994 and 1996. Remaining details must be worked out by yearend 1990 and a final contract signed to meet a 1994 deadline.
Royal Dutch/Shell is unhappy over some conditions of a permit to build Thailand's fourth major grassroots refinery, a 145,000 b/d, $756 million plant scheduled to start up in 1994 (OGJ, Jan. 29, p. 34).
The government requires Shell to allow Caltex a 15% interest in the project to ensure competition. Shell instead is negotiating a 10% stake for Caltex contending the bigger Caltex stake would come at the expense of its 10-12 committed partners.
Shell's original bid--which bettered a Caltex bid--called for its group to have a 36.4% stake, state owned Petroleum Authority of Thailand (PTT) 25%, a government-nominated shareholder 10%, and the public the remainder. The government set interests at Shell 30%, PTT 25%, Caltex 15% and the public 30%.
U.S. crude and products imports averaged 9,133,000 b/d in January, 54%, of domestic demand and a monthly record, American Petroleum Institute reports.
The Energy Information Administration's latest outlook shows U.S. oil imports will reach 10-15 million b/d by 2010.
How are horizontal wells in Mississippian Bakken shale in the Williston basin performing?
A Golden, Colo., firm has begun an industry sponsored study to compare the reservoir engineering aspects of Bakken horizontal and vertical wells.
Simtech Consulting Services plans to use sophisticated reservoir, well test, and hydraulic fracturing simulation technology. The study has 11 industry sponsors and is open to others.
Gas futures trading will begin in New York Apr. 3, subject to approval by Commodity Futures Trading Commission.
New York Mercantile Exchange said June 1990 will be the first contract delivery month.
heavy to $15.26/bbl, the highest levels since January 1986.
Japanese sources said the Mexican moves followed increases in direct-deal prices for Saudi Arabian, Iranian, and Iraqi crudes and took prices to 4 year highs.
North Sea crude prices were steady last week, with Brent blend for March delivery trading at $19.60/bbl.
WTI futures for March delivery closed Feb. 14 at $22.07/ bbl, down 25 on the week. WTI postings, at $21-22.50/bbl for most of January, settled at $20.75/bbl last week.
Venezuela, in a major policy turnabout, will allow state owned Petroleos de Venezuela SA to seek international participation in exploration and development in the country--the first time since nationalization of the petroleum industry in 1976.
In recent years, Pdvsa has sought foreign partners only for downstream projects in Venezuela.
Britain's Department of Energy is making a bid to stimulate wildcatting in U.K. continental shelf frontier areas.
The department plans a licensing round devoted entirely to areas that have seen relatively little exploration.
Initial approaches to oil companies produced a favorable response. DOE is likely to announce details this spring, when it will also disclose a schedule for the 12th licensing round containing mainly acreage in mature North Sea areas.
Norway's Continental Shelf Institute (IKU) and the Soviet Union's Scientific Research Institute for Marine Geophysics (Niimorgeophysica) plan a joint seismic survey in the Barents Sea.
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