More Government News

DOE TO SELL 3.9 MILLION BBL OF SPR CRUDE OIL

Eleven companies were high bidders for 3.925 million bbl of U.S. Strategic Petroleum Reserve oil last week. Their bids averaged $34.14/bbl for sour crude and $38.68/bbl for sweet. The Department of Energy had offered 5 million bbl, the maximum allowed by law for a "test sale," which does not require an energy emergency declaration, and 33 bidders made 40 offers totaling 10.4 million bbl.

OGJ NEWSLETTER

Rumor sets the price of oil today. U.S. crude futures prices went on another wild roller coaster ride last week in response to false rumors emanating from the Persian Gulf crisis. Reports of U.S. troops being sent into Kuwait pushed Nymex crude to more than $41 in early trading Oct. 10, countered by another false alarm about Saddam being shot that in turn pulled the closing price down almost $2 vs. a record $40.40 closing Oct. 9. The Oct. 10 close of $38.69/bbl was up almost $5 on the week.

WATCHING WASHINGTON THE MOST POWERFUL PARTY

with Patrick Crow Rep. William Dannemeyer (R-Calif.) is the antithesis of the usual television-slick, one-eye-on-the-polls southern California congressman. He's opinionated, outspoken, and apparently unconcerned about public opinion. Not surprisingly, he's one of the few California congressmen who supports offshore drilling. And he's one of the very few congressmen who dares to criticize the environmental movement.

NGSA: U.S. GAS SUPPLY ADEQUATE FOR WINTER

The Natural Gas Supply Association predicts U.S. gas supplies will be adequate this winter at normal demand volumes. NGSA also reported the gas supply surplus is slowly but surely diminishing. It said gas wellhead capacity utilization increased on an annual and peak month basis in 1989, and the higher utilization rate indicates that the gas supply surplus is shrinking. The survey found capacity utilization increased to 82.3% in 1989 from 81% in 1988.

TRIMBLE FIELD, MISS.: 100 BCF OF BYPASSED, LOW RESISTIVITY CRETACEOUS EUTAW PAY AT 7,000 FT

Philip L. Cook Jr. Cook Energy Inc. Jackson, Miss. Robert D. Schneeflock John D. Bush John C. Marble Paramount Petroleum Co. Jackson, Miss. The Upper Cretaceous Eutaw formation of Mississippi has produced almost 2 tcf of gas since its initial discovery at Gwinville field in 1944. Prior to Trimble field, the last major Eutaw gas discovery in the state was Maxie-Pistol Ridge field in 1951.

OGJ NEWSLETTER

The widely predicted "windfall profits" for big U.S. oil companies stemming from the crisis induced runup in oil prices probably won't materialize. Dean Witter estimates third quarter earnings will slip 1% to $3.286 billion for the 11 majors it tracks. Upstream earnings will benefit from WTI postings jumping about $6.40/bbl from third quarter 1989, says Dean Witter, but "no meaningful benefit will accrue from domestic natural gas operations, which experienced slack demand and depressed

GASOLINE CONFUSION HURTS U.S.

The U.S. seems terminally confused about gasoline. After a decade of cheap motor fuel, the country is in a frenzy because prices jumped after Iraq invaded Kuwait Aug. 2.

PETROBRAS CHIEF QUITS; FURTHER SHAKEUP AHEAD

The president of Brazil's state owned oil company has resigned after a dispute with the federal government, presaging more shakeups for Petroleos Brasileiro SA. His successor is an economist who promises to press government austerity measures and efforts to privatize Brazil's petroleum industry. The upshot likely will be a round of severe personnel cuts at Petrobras, slower increases in domestic petroleum prices, and a strengthened role for Petrobras' international arm, Braspetro.

SUIT FILED TO BLOCK MARAD'S LNG TANKER DEAL

Energy Transportation Group Inc. (ETG), New York City, has filed a federal lawsuit to block the sale by U.S. Maritime Administration (Marad) of three liquefied natural gas tankers. The proposed sale stems from a settlement reached last month of a dispute over ownership and sale of LNG tankers (OGJ, Oct. 1, p. 28). Marad's agreement covering the Arzew, Southern, and Gamma vessels is with units of Royal Dutch/Shell Group, Argent group, and Cabot Corp. Marad acquired the tankers by

CLEAN AIR BILL CHALLENGES REFINERS

U.S. refiners face technological demands in the next few years as challenging as those they faced satisfying aviation fuel needs in World War 11 and removing lead from gasoline in the 1970s and '80s. And they'll have to meet those demands while conducting business under market conditions no one can predict.

CLEAN AIR AMENDMENTS DRAW INDUSTRY FIRE

Congressional conferees agreed on a U.S. Clean Air Act reauthorization last week, clearing the way for House and Senate votes on the bill before adjournment. The petroleum industry blasted the measure, warning of "substantial" increases in the cost of gasoline with little environmental benefit even if the required volumes of motor fuel can be made. Aides pointed out any senator can kill the bill with a filibuster, which happened to similar legislation in 1976.

COMMENT NGSA: THERE'S STILL LOTS TO DO TO IMPROVE FERC, PIPELINE RATES

Nicholas J. Bush President Natural Gas Supply Association Washington, D.C. The U.S. natural gas industry's transition to a more competitive environment continues. And, while several major obstacles to achieving a more market based system have been overcome, the frustrations of unraveling more than 50 years of stifling regulations still surface. Recent congressional hearings on operations and procedures at the Federal Energy Regulatory Commission, for example, raised questions about the

CONGRESS TRIMS OIL INCENTIVES IN BUDGET BILL

Before adjourning last week, Congress scaled back tax incentives for oil companies in budget deficit legislation. The final pact will increase the 9cts/gal gasoline tax and 15cts/gal diesel tax each by 5cts/gal effective Dec. 1. The bill gives industry $2.5 billion in tax and production incentives in fiscal 1991-95 vs. $4 billion in the initial budget deficit agreement (OGJ, Oct. 8, 1990, p. 30), which the House rejected.

OGJ NEWSLETTER

Just how cozy will oil exporters and consumers get because of the latest oil supply crisis? A U.N. sponsored meeting of OPEC and IEA, proposed by Venezuela President Perez, gets under way this week in Vienna to study ways of stabilizing oil prices. IEA in the past has expressed qualms about such meetings with the oil exporters' group (see story, p. 19). Attending are Algeria, Brazil, France, Germany, Netherlands, India, Indonesia, Iran, Japan, Mexico, Norway, Saudi Arabia, Tanzania, U.S.,

UNDER FIRE, FERC SEEKS TO SPEED PIPELINE PERMITTING

Patrick Crow Washington Editor The Federal Energy Regulatory Commission is coming under increasing pressure to streamline its certification process for new gas pipeline projects. FERC is trying to speed permitting on its own yet gets defensive when industry and congressmen complain about delays. The problem is mainly with major pipeline projects. A House of Representatives subcommittee recently estimated it took FERC an average of 693 days to process contested major certificate applications

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