OGJ NEWSLETTER

The International Energy Agency has sharply lowered its previous estimate of OECD energy consumption in fourth quarter 1989 and forecast for all of 1990.

Revised data show OECD demand rose 100,000 b/d in fourth quarter 1989 to 39.3 million b/d, a 0.3% increase from the same period of 1988. Before the revision, IEA estimated fourth quarter demand growth of 400,000 b/d to 39.6 million b/d.

Preliminary data and estimates suggest a 300,000 b/d rise in first quarter 1990 to 38.7 million b/d. IEA's previous estimate was a 500,000 b/d increase to 38.9 million b/d.

IEA estimates a 400,000 b/d rise in consumption for all of 1990 to 37.9 million b/d, down from its previous estimate of a 38 million b/d average for the year.

The Bush administration is studying a proposal by Rep. Dan Rostenkowski (D-Ill.), House ways and means committee chairman, to reduce the federal deficit.

President Bush said last week he is willing to work with Rostenkowski, although Bush opposes the tax increases in the plan.

Rostenkowski said the deficit could be cut $55 billion in fiscal 1991 and there could be a surplus by 1995 if Congress would freeze spending, earmark military spending cuts for deficit reduction, increase some income taxes, and raise the federal gasoline tax by an undisclosed amount.

Deputy Energy Sec. Henson Moore said the U.S. Department of Energy is negotiating with the Soviet Union to improve cooperation in energy research and development, energy data exchange, and service and supplies imports/exports.

A Soviet delegation has visited the U.S., and DOE will send a delegation to Moscow next month.

Non-Soviet companies are showing interest in data packages offered by two Soviet ministries that could lead to exploration, development, and production sharing joint ventures on Soviet soil (see p. 15).

DOE has resumed spot market purchases of crude oil for the Strategic Petroleum Reserve, buying 500,000 bbl of North Sea sour crude from Texaco Britain Inc.

It has bought crude exclusively from Petroleos Mexicanos for more than 4 years but when that contract expired decided to buy crude with different specifications for the rest of the fiscal year, which ends Sept. 30.

Mobil North Sea Ltd. has agreed to sell a 5% stake in its Beryl operations in the U.K. North Sea to the U.K. affiliate of Austria's OMV AG for $200 million. OMV will acquire a share in the main Beryl field, the Ness and Linnhe satellites, and the associated gas transportation/processing system. The area produces about 120,000 b/d.

The deal is subject to preemptive right of Mobil's Beryl partners, Amerada Hess Ltd., Enterprise Oil plc, and North Sea Inc., formerly Texas Eastern (U.K.), and U.K. Department of Energy approval.

Mobil North Sea Chairman Robert W. White said OMV's unsolicited offer for this small interest is extremely attractive and provides value Mobil could not otherwise realize. Mobil's remaining interest is 45%.

Canada-Newfoundland Offshore Petroleum Board has offered exploration rights on 14 blocks covering 21,748 sq miles off Newfoundland.

Properties include nine blocks on the west coast of Newfoundland, three in the Flemish Pass area, and two in the South Whale basin. Bidding will close in late October.

The board will call for nominations in early April for rights to about 1,243 sq miles in the Jeanne d'Arc basin on the Grand Banks.

The Jeanne d'Arc properties are expected to revert to government ownership at the end of March.

Kern River Gas Transmission Co. will transport a firm 50 MMcfd of gas for Amoco Energy Trading Co. through its proposed 700 MMcfd, 36 in. pipeline from Wyoming to California. With the Amoco pact, Kern River has 655 MMcfd in long term contracts.

BP America has completed cleanup of the Feb. 7 spill of Alaskan crude off Huntington Beach, Calif., amid glowing reviews. The company had spent more than $19 million on the cleanup and collected 9,000 tons of oil debris by the time all affected beaches were reopened last week.

The Coast Guard reported a world record on-water oil recovery of 35-37% in the spill response, which saw as many as 22 skimmers working.

Repercussions from the California spill aren't helping Chevron Corp. gain support for its efforts to tanker crude from its hamstrung Point Arguello project off Santa Barbara County to Los Angeles refineries.

Chevron called a new report by the staff of the county's energy division "distorted and misleading ... to support what is clearly the staff's intent: to deny a review of oil tanker transportation based on the facts established by (the county mandated) crude oil transportation analysis."

The U.S. Internal Revenue Service has issued final rules, published in the Federal Register Mar. 9, that make ethyl tertiary butyl ether eligible for the 60/gal alcohol fuels tax credit.

Companies are pressing alternate motor fuels initiatives in the U.S.

Sun Refining & Marketing Co., with President Bush on hand, opened a retail methanol dispensing pump in Washington, D.C., first in the U.S. outside California.

Sun and Ford Motor Co. started a methanol fuels research.-program to measure tank and pump materials service, customer refueling impressions, emissions, fuel system performance, motor oils, and high density polyethylene tanks that can be molded into irregular shapes to hold more fuel and improve driving range.

Sun is to open a pump at a Dearborn, Mich., gasoline station to dispense 85% methanol and 157, unleaded gasoline.

Marathon Oil Co. is kicking off a pilot program to sell reformulated gasoline at 161 branded outlets in southeastern Michigan, the product's first appearance outside southern California and the Denver area.

That part of Michigan is an ozone nonattainment area.

Phillips 66 Propane Co. will buy the LPG assets of Schrader Oil Co., Fort Collins, Colo., and use Schrader facilities in Colorado and Wyoming to launch its retail fleet LPG marketing program (OGJ, Mar. 5, Newsletter).

Phillips will open its first LPG fueling, service, and conversion center in Denver by May 31.

The Irish government has dropped plans to allow Nigerian National Petroleum Corp. to take a stake in the state owned, 56,000 b/d Whitegates refinery near Cork.

NNPC would have funded modernization of the outdated unit.

The government is now hoping to attract money and expertise for the Whitegates revamp through a joint venture with international oil companies.