Change is a boon as well as a bane for business, and oil and gas companies are no exception.
Last week in Washington, a Petroleum Finance Co.-Petroleum Intelligence Weekly seminar sought to explore potential changes in store for the international oil industry.
CHANGES IN STORE
In international natural gas markets, the focus is on the competition between Russian and North Sea gas for the European market and the need to increase liquefied natural gas sources to meet Far Eastern demand.
Speakers said more U.S. oil and gas companies will seek opportunities abroad in the 1990s, particularly in exploration and production.
Kenneth Lay, chairman and CEO of Enron Corp., said U.S. natural gas companies may join that movement.
Lay noted Enron is half owner of a large gas fired combined cycle plant under construction in Great Britain and is looking for other prospects.
"Enron intends to become an integrated, international natural gas company over this decade.
"In the gas industry, some of the greatest growth will be outside North America. Integrated gas companies can do what integrated oil companies have been doing around the world for years."
Dale Jones, president of Halliburton Inc., said as exploration shifts to more remote areas of the world, logistics will prove more of a challenge for oil companies than technology.
He predicted oil firms increasingly will concentrate on their areas of expertise, contracting out more functions.
Continued change is also predicted for oil markets and pricing. Andrew Hall, Chairman and CEO of Phibro Energy, said the oil market has become much more efficient but prices likely will remain volatile.
He said, "The U.S. oil and gas industry has entered a difficult and lackluster phase. Oil has become another commodity and as a result is less profitable."
Bill Hopper, chairman of Petro-Canada, and Harald Norvik, CEO of Den norske stats oljeselskap AS, detailed evolution of their state oil companies. Petro-Canada is now being privatized, and Statoil is less government oriented.
Other speakers agreed that in the future, national oil companies will be used less as instruments of government policy and more as profit oriented businesses, relying more on international oil companies for exploration expertise, capital, market outlets, and technology.
ENVIRONMENTAL ISSUES
Environmental issues will be a major factor for change in the 1990s, and most refinery construction in the U.S. and Europe will be geared to antipollution requirements.
It was estimated environmental rules could cost U.S. refiners at least $7-12 billion/year and western European refiners $3-5 billion/year.
Gilbert Portal, head of the European Petroleum Industry Association, said, "The oil industry should be proud of its environmental record and let the public know of its achievements."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
