WATCHING THE WORLD OIL'S ROLE IN COAL

British Petroleum Co. plc's withdrawal from the international coal business as part of a strategy of concentrating on core assets may have given the impression that oil companies are losing interest in coal.

Nothing, however, could be further from the truth. Oil companies are still among the big investors in coal and are developing into an influential force in the international export sector.

SHEFFIELD'S REPORT

A report into competition and performance indicators among worldwide coal companies by Sheffield Energy & Resources Information Services, Sheffield, England, shows that during 198590 oil companies increased their share of world coal production as well as their share of international coal sales.

In neither case, said the report, did the performance of oil companies imply a clear trend toward domination of the world coal industry of the kind many politicians feared in the late 1970s.

On the other hand, said the report, some of the oil companies have been at the cutting edge of the rapidly growing seaborne steam coal trade. That's a development that has been much more significant in its implications than its relatively small volume would suggest, particularly for the future of the coal industry in the European Community.

During 1990 world hard coal production fell to 3.507 billion tons from 3.534 billion tons the previous year. While total production was in decline the international trade increased to 399.7 million tons from 379.4 million tons with seaborne steam coal trade leading the upward trend.

Only one oil related group, Du Pont, appeared in the list of top 10 producers. The company's Consolidation Coal Co. subsidiary also showed the biggest increase in capital spending.

But when it comes to exports it is a different story.

Four of the top 10 companies are in the oil sector.

Australia's BHP, perhaps better described as a hard minerals company that has been successful in oil, stands at No. 3 after the Soviet and Polish state export agencies. The Royal Dutch/Shell Group is No. 5, with Du Pont and Exxon Corp. filling the eighth and 10th spots in the table.

ACTIVE NEWCOMERS

The report also looks at newcomers to the coal business. One of the most active is Japan's diversified energy company Idemitsu Kosan, which unlike other Japanese companies is seeking 100% interests in coal operations. Its production is small, but it's set to increase considerably during the next few years.

Another name to watch for is the ENI subsidiary Agip Carbone, which now has assets in Australia, South Africa, the U.S., Sardinia, and Venezuela.

Carbocol and Carbozulla, respectively the coal subsidiaries of Colombian and Venezuelan state oil companies, also are beginning to play an important role in the international coal business, breaking into the markets of Europe and the U.S.