A campaign by Oman's oil minister Said Al Shanfari to rally support for production cuts among non OPEC producers has failed.
Middle East Economic Survey said despite Shanfari's references to positive responses" from producers such as Russia, Egypt, Syria, Angola, Malaysia, and Brunei, there have been no pledges from them to cut output.
Only Oman and Yemen have so far volunteered to cut production. Effective this month, Oman will trim its output by 5% to 765,000 b/d this quarter, and Yemen will cut its flow by 5%.
The fourth quarter plunge in oil prices has blunted what otherwise would have been a strong showing for 1993 U.S. company profits sparked by a continuing cost cutting frenzy.
Amoco noted, "In view of the drop in prices, earnings performance was strong. Efforts at restructuring, streamlining, and cost reduction are helping to offset the unfavorable price environment in which we operate."
Amoco, which met its target of eliminating $600 million in expenses during the preceding 18 months, posted only a slight gain in fourth quarter net income to $584 million from $548 million in 1993.
Big writedowns and other charges related to restructuring, however, contributed to some companies' profits decline. ARCO had a net loss of $330 million in the fourth quarter, taking a $487 million after tax charge for restructuring.
Companies with upstream portfolios weighted toward natural gas tended to fare better than those biased toward oil because of a $3 4/bbl drop in prices received for their crude. Natural gas prices also were lower for the quarter, but many companies reported higher gas prices for the year overall. ARCO's U.S. crude price was $9.89/bbl in the fourth quarter vs. $13.25 the year prior. Pogo's average gas price jumped to $1.98/Mcf in 1993 from $1.75/Mcf in 1992 as its earnings rose 35%.
Downstream, the picture brightened somewhat. Mobil's refining/marketing income jumped by $714 million to $1.087 billion in 1993.
U.S. company earnings, in millions of dollars, with 1993 first and losses in parentheses were: Exxon 5,280 vs. 4,770, Mobil 2,084 vs. 862, Amoco 1,820 vs. (54), Chevron 1,265 vs. 1,569, Texaco 1,259 vs. 1,038, Sun 288 vs. (559), Occidental 283 vs. (591), ARCO 269 vs. 801, Panhandle Eastern 148.1 vs. 187.1, FINA 70.4 vs. (10.2), Union Texas 27 vs. 14, Lyondell 26 vs. 16, Pogo 25 vs. 18.5, Diamond Shamrock 18.4 vs. 8.7, Quaker State 13.7 vs. (93.8), Noble Affiliates 12.6 vs. 41.2, and Amerada Hess (133.6) vs. 17.9.
Chevron wants to resume tankering of Point Arguello crude to Los Angeles on grounds the southern California pipeline system was disrupted by the Jan. 17 Northridge earthquake (OGJ, Jan. 24, pp. 22, 27). The company was expected to lose its tanker permit this week for failure to have contracts in hand by Feb. 1 for a new onshore pipeline to transport Point Arguello crude to market. An emergency tanker permit could take weeks, and Chevron and partners are buying space for 77,000 b/d in pipelines hound for refineries elsewhere in the state to maintain Point Arguello production.
U.S. and Canadian gas pipelines last week claimed high marks for reliability and cooperation in the first real test of FERC Order 636 rules as record cold in the U.S. spawned a flurry of operating records.
Interstate lines for the most part fulfilled all commitments to firm customers and delivered emergency supplies beyond contract volumes to customers that set peak day consumption records when arctic weather blanketed much of the U.S. this month (OGJ, Jan. 24, Newsletter).
Several weather stations in the U.S. Northeast reported 30 consecutive days of below normal temperatures.
Transco's two interstate lines delivered all gas nominated under firm contracts while more than meeting record demand. TGPL delivered a peak day record of about 6.3 bcf Jan. 19 and Texas Gas about 2.9 bcf on Jan. 18.
In addition, Transco Gas Marketing sold about 100 MMcfd of incremental emergency service beyond contract volumes for 5 days, moving peak day volumes of more than 2.4 bcf.
Brooklyn Union had a record gas sendout Join. 19, delivering 1.02 bcf to New York customers. Piedmont Natural Gas also reported a record sendout Jan. 19, delivering 903 MMcf to its Carolinas/Tennessee service.
Some brief, local curtailments to interruptible customers were reported, but the few disruptions that occurred resulted not from regulatory problems but from cold related mechanical problems or electric power outages. Utilities in Maryland, New Jersey, Pennsylvania, and Washington, D.C., imposed rolling blackouts to cope with power demand surges caused by the cold. Panhandle Eastern's Tetco, in turn, was forced to curtail gas supplies to Northeast utilities by 15%, or 386 MMcfd, Jan. 19 because of power outages at compressor stations along its Pennsylvania system caused by the blackouts. Tetco resumed full service Jan. 20.
Meantime, some Canadian pipelines are reporting record throughput in 1993.
Westcoast's mainline throughput hit a record 579 bcf in 1993, up 13% from 1992. Westcoast also reported a peak day delivery of 1.87 bcfd Dec. 27.
Nova's Alberta gas system AGTD set records for annual and single day delivery as well as requests for access. AGTD moved 11.6 bcf out of Alberta Jan. 14 and delivered 3.8 tcf in 1993, up 10.9% from 1992, with the biggest growth in eastbound gas.
The surge in requests for access is driving a $2 billion (Canadian) pipeline expansion program Nova plans the next 3 years.
Meantime, AGTD plans to use Grade 550 (X 80) pipe in a Southeast Alberta pipeline expansion. It's the first time the high strength pipe will be used on a mainline project in North America, Nova said. Beginning in July, AGTD will install 18 miles of Grade 550 pipe on the 48 in. Matzihiwin East project, part of a 240 mile expansion of Nova's eastern Alberta mainline. By cutting the volume of steel, AGTD expects to save $21 million on construction material alone for the overall expansion.
Statoil proposes laying two parallel gas pipelines through Germany's coastal wetlands for Europipe landfall. This will allow Statoil's proposed fourth North Sea gas trunkline to Europe to be tied in at a later date without adding to environmental disruption. Statoil says Germany must approve the twin line option quickly if Europipe start up is not to he delayed. Pipelaying must begin in April to meet the Oct. 1, 1995, deadline for gas sales to Europe. Recent gas sales contracts and current negotiations will boost gas demand from the Norwegian shelf after 1998. Statoil will decide this year whether a new trunkline is required. Statoil also is considering landfall options in Belgium and Netherlands for the fourth trunkline.
Conoco is excited over results from the first exploratory well in 20 years on southern North Sea Block 49/16. The 49/16 11 well flowed 73.4 MMcfd of gas from Rotliegendes Leman sands through a 96/64 in. choke.
Conoco is evaluating 2D seismic on the block and planning 3D seismic surveys and drilling near Viking field. Conoco recently completed expansion of its Theddlethorpe onshore terminal, which processes gas from 12 gas basin fields, including Viking (OGJ, Nov. 29, 1993, p. 37).
Argentina has asked for a meeting with U.K. Foreign Office officials to discuss possible oil development around the Falkland Islands.
The request follows growing media speculation over prospectivity of the area after seismic surveys were conducted at the request of British Geological Survey, Edinburgh. Initial results suggest the Falklands prospective area may be larger than the U.K. North Sea's. An exploration licensing round is planned later this year (OGJ, Jan. 17, p. 67). London's Financial Times said the British government will allow Argentine participation in Falklands field developments if Argentina acknowledges U.K. ownership of reserves.
A Foreign Office official denied the statement, saying Falklands law permits seismic work in territorial waters and allows Argentine firms to participate on a commercial basis.
Russia's state oil company Lukoil is reportedly pushing for equity shares in large oil and gas projects throughout the former Soviet Union without offering capital contributions. Lukoil was allowed to participate in the Azerbaijan government's share in a group developing Chirag and Azeri fields in the Caspian Sea. Now Lukoil is said to be muscling in on all major oil deals in Kazakhstan, notably Karachaganak gas field, currently under development by British Gas and Agip.
Russian oil companies apparently believe they have a valid claim to share in major FSU developments because the discoveries were made during the Soviet era. Russian participation offers little threat to foreign companies so long as the shares come out of the host government's stakes.