CAPITAL HUNT TAKES NEW TURNS IN C.I.S.

As U.S. independent producers plan a new group foray into the Commonwealth of Independent States, Russia's biggest production association prepares for a stock market debut. What's going on here, anyway?

This month, a delegation of members of the Independent Petroleum Association of America will visit Moscow, local producing associations, and oil fields looking for opportunities. It won't be the first tour of the old Soviet Union conducted under IPAA auspices. And a few independent producers from the U.S. already are at work in the Commonwealth of Independent States. This IPAA effort is significant for other reasons.

FEDERAL SUPPORT

For one thing, it has support from the Departments of Energy and Commerce, product of welcome new federal activism on behalf of U.S. companies pursuing business abroad. That the help, by all accounts especially forthcoming in the C.I.S., can extend to independent producers is encouraging. Furthermore, the IPAA tour manifests small-company interest in the C.I.S. that's impressive in view of the operating challenges there. Like major companies, many independents think potential rewards outweigh the certain risks and inconveniences. Whatever their financial troubles of recent years, independents remain as strongly attracted to opportunity as ever.

Two groups might learn something from this. One of them comprises the major oil companies now seeking exploration and development rights in Russia, Kazakhstan, and Azerbaijan. Officials in the former Soviet republics are said to be more comfortable dealing with small, independent producers and service firms than they are with large, integrated companies. There ought to be a lesson in that for the majors.

The other group includes DOE officials on tour in the U.S. to tell independent producers how much the federal government has to offer in the way of research assistance and oil recovery programs. It's an election year gambit, of course. And there certainly are independents not destined to work in the C. I. S. who can and should benefit from what DOE offers. The sad fact nevertheless remains that the U.S. is an increasingly difficult place in which to explore for and produce oil and gas. Access to prospective parts of the resource shrinks with time. Producers must contend with drilling tax penalties and swelling environmental liabilities for inconsequential missteps. It should worry anyone with responsibility for energy policy that U.S. independents view opportunities in the C.I.S. with growing favor in relation to those in their own country.

INTERESTING TRANSFORMATION

Meanwhile, Russia's Surgutneftegas Oil Production Association has picked a financial advisor to help it become a publicly owned, profit-centered, international oil company. A transformation like that can't happen overnight, but the prospect is interesting: The 314 million bbl of oil Surgutneftegas expects to produce this year would hold position No. 13 in a production ranking of worldwide oil companies, including those owned by governments. The Russian group's anticipated oil production falls between the 1991 totals of British Petroleum Co. plc and Chevron Corp. Whether Surgutneftegas can produce that much oil efficiently enough to earn competitive returns remains to be seen. But its step toward world capital markets has implications as far reaching as IPAA's reconnaissance patrol of C.I.S. oil fields.

What's going on here? The petroleum industry's defining dynamic, that's what: Capital seeking resource meets resource seeking capital. Except for geography, it's business as usual. The main political question is who wants the work and who doesn't.