In its 20 years, the National Ocean Industries Association has seen hard times before. But never this hard.
Meeting last week in Washington, offshore oil industry delegates commiserated with each other about extremely low oil and gas prices and the rock bottom level of offshore drilling.
UNPRECEDENTED HOSTILITY
But the preeminent topic was unprecedented congressional efforts to restrict drilling off the U.S. coastline.
Bills are pending in the House that would ban new federal leasing until after 2000 everywhere except off the central and western Gulf of Mexico and off Alaska-except for Bristol Bay.
C.J. Silas, chairman of American Petroleum Institute and Phillips Petroleum Co., said the U.S. government has become one of the most hostile in the world to the oil industry.
He noted U.S. oil companies are shifting their drilling budgets to overseas projects. "When the best exploration areas in the country are off limits, such as the Arctic National Wildlife Refuge in Alaska or the continental shelf, just what do the politicians think drilling companies are going to do?"
J. Landis Martin, chairman and CEO of Baroid Corp., Houston, said, "It is ironic that one of the most exciting projects my company is working on today is in Russia."
William C. O'Malley, NOIA chairman and executive vice president of Sonat Inc., Houston, said "Every producing country except the U.S. is trying to increase its reserves. This country is virtually the only one in the world in which we are not welcome. Our government adds to the financial drain of the cost of doing business, while foreign governments work with us to encourage investment."
BUSH NOT SUPPORTIVE
NOIA officials praised the Bush administration for helping fight anti-offshore drilling amendments but criticized it for not working harder before.
Robert Stewart, NOIA president, said the administration helped defeat anti-drilling amendments in the Senate recently, deeming that effort "the first time the administration has worked on the issue and worked it hard."
He added that "does offer some hope we can muster the same forces against similar amendments on the House side."
But he said, "The administration has not been terribly supportive of our industry" since Bush arbitrarily, withdrew large areas of the offshore from leasing in 1990 and "sent a signal on offshore issues" to Congress.
O'Malley agreed, saying, "He hasn't helped the oil industry in years and years. You see no sign of a continuing allegiance to the oil industry."
SOLE ENCOURAGING NOTE
About the only encouraging note at the meeting was Interior Sec. Manuel Lujan's announcement his department has proposed some ways to reduce offshore royalties. Other federal agencies now are reviewing the plan.
Lujan said, "As many leases are nearing the end of their economic viability royalty rate reductions could serve as an incentive to promote continued production of investments in recovery enhancement."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
