The following
information contains a listing of the major energy events that occurred in 1997. Simply click on a specific month to review the energy chronology for that month. Sources include: Dow Jones (DJ), Energy Alert (EA), Energy Market Consultants (EMC), Herold's Oil Headliner (HOH), New York Times (NYT), Platt's Oilgram News (PON), Reuters (REU), the Wall Street Journal (WSJ), and the Washington Post (WP). For information on energy events that took place in 1996, please click here.
January 1997
February 1997
March 1997
April 1997
May 1997
June 1997
July 1997
August 1997
September 1997
October 1997
November 1997
December 1997
March 1 Sudan signs contracts with national oil companies
from China and Malaysia and a private Canadian company (Arakis)
to develop its oil reserves. The contracts also cover construction
of a 50,000-barrel-per-day oil refinery in Khartoum and a 900mile
oil pipeline to transport up to 250,000 barrels per day to Port
Sudan on the Red Sea. Sudan hopes to increase crude oil output
to 150,000 barrels per day by mid1999 (current production
is estimated between 10,000 and 15,000 barrels per day). A civil
war which erupted in 1983 hampered previous oil industry development
in Sudan, which currently consumes about 50,000 barrels per day
of refined products. (DJ)
March 3 In its regular 60day review, the United
Nations Security Council votes to maintain sanctions on Iraq.
This is the 36th review since sanctions were first imposed in
1990. (DJ)
March 3 Lyondell Petrochemical Co. and Citgo Petroleum
Corp. announce the completion of a $1.1 billion upgrade of their
joint-venture LCR refinery in Houston to process more than 215,000
barrels per day of very heavy crude oil (17 degree API gravity)
from Venezuela and produce higher valued products such as reformulated
gasoline and lowsulfur diesel. Affiliates of Venezuela=s
state oil company (Citgo's
parent company) supply up to 230,000 barrels per day of crude
oil under a long-term contract and Citgo purchases and markets
most of the refined product output. For Venezuela, the venture
secures guaranteed, longterm markets for its heavy crude
oil. (DJ)
March 3 A Venezuelan Navy spokesman announces that a major
oil spill (25,000-50,000 barrels) off Venezuela's western coast
will take at least one month to clean up. The spill occurred
when the Greek tanker Nissos Amorgos ran aground February 28 and
began leaking its cargo of 476,000 barrels of heavy crude oil.
Maraven, a unit of stateowned oil company Petroleos de Venezuela,
reports the tanker was leased by Italybased oil company
Agip. (DJ)
March 3 Mexico's
state oil company Petroleos Mexicanos (Pemex) establishes two
new petrochemical subsidiaries covering the Cangrejera and Morelos
complexes. Establishment of subsidiaries is the first step in
the process of privatizing Mexico's
petrochemical industry. To date, Pemex has established subsidiaries
for 6 of its 10 petrochemical complexes (subsidiaries for Camargo,
Cosoleacaque, Escolin and Tula were announced in late January).
Competitive bidding for the sale of 49 percent of each subsidiary
is scheduled to begin in the second half of 1997. (DJ)
March 4 Mexico's
state oil company Petroleos Mexicanos (Pemex) reports the Campeche
Sound (in the Gulf of Mexico) has hydrocarbon potential of 74
billion barrels of crude petroleum equivalent, proven reserves
of 17.1 billion barrels, and cumulative production of 11.8 billion
barrels. Pemex plans to publish estimates for Mexico's Southern
Region in 1998 and its Northern Region in 1999. At the end of
1995, Pemex claimed that proven hydrocarbon reserves (crude oil
and natural gas) for all of Mexico stood at 62.06 billion barrels
of crude petroleum equivalent. (DJ)
March 5 The United Nations approves the 36th contract
for the sale of Iraqi oil and announces that the $1.07 billion
limit for the first 90day period of Iraq's
oil-for-food program has been "more
or less" met. The $1.07 billion includes $70 million in pipeline fees to Turkey. (DJ)
March 6 The North Sea's
Captain Field, operated by a unit of Texaco, begins production.
Located about 90 miles northeast of Aberdeen, Scotland, the field
holds estimated reserves of 350 million barrels of oil and 53
billion cubic feet of natural gas. It is expected to reach peak
production of 67,000 barrels per day by mid1997. (WSJ)
March 6 The Minerals Management Service of the U.S. Department
of Interior reports a recordbreaking sale of offshore oil
and natural gas leases in the Central Gulf of Mexico, attracting
more than $824 million in high bids from 81 companies (compared
with last year's $520.9
million in high bids from 78 companies). The high bid on each
block must be evaluated to ensure fair market value before a lease
is awarded; each block is approximately nine square miles. (DJ)
March 7 Indonesia's stateowned oil and gas company
Pertamina announces that it has secured a $1.13 billion syndicated
loan to finance the development of its eighth liquefied natural
gas (LNG) plant, to be located in Bontang, East Kalimantan. The
plant, with annual production capacity of 2.95 million tons, is
scheduled to begin operating at the end of 1999 and will supply
LNG to the Korean Gas Company and the Chinese Petroleum Corporation
under a 20year contract. (DJ)
March 7 Spain's Cabinet of Ministers approves the public
offering of the government's final 10 percent stake in Repsol,
the country's largest
oil and energy group. The sale is expected to begin in April.
The government has been reducing its stake in stages since privatization
began in 1989. (DJ)
March 8 Qatar's alKhaleej offshore oilfield begins
production at an initial rate of 20,000 barrels per day, which
will gradually increase to around 30,000 per day by November 1997.
The field is being developed by a consortium including France's
Elf Aquitaine and Italy's
Agip under a productionsharing agreement with Qatar General
Petroleum Corporation. Qatar plans to increase its oil output
to around 700,000 barrels per day by 2000, from 550,000 barrels
per day currently. (DJ)
March 10 Exxon announces a 'significant discovery' in
the Gulf of Mexico, called Hoover, which may contain developable
reserves of more than 100 million barrels of oil equivalent.
(DJ)
March 11 Turkey's Minister of Energy Recai Kutan reports
that Turkey will go ahead with its plans to import Iranian natural
gas, despite objections from the United States. Turkey plans
to begin operating gas power plants by 2000, when the country's
annual demand for natural gas is projected to exceed 950 billion
cubic feet. (DJ)
March 11 Royal Dutch/Shell begins drilling its first appraisal
well at Peru's giant
Camisea field, now thought to be the largest natural gas field
in South America. The field, discovered in 1980, could contain
as much as 11 trillion cubic feet of natural gas and 600 million
barrels of condensate. (DJ)
March 12 By a vote of 99 to 1, Federico Peņa
is confirmed by the Senate and later sworn in as the eighth U.S.
Secretary of Energy. (DJ)
March 12 Turkey's BOTAS pipeline company reports that
it has received 29.1 million barrels of oil from Iraq since December
14, 1996 at its Yumurtalik pumping station on the Iraq-Turkey
pipeline, of which 8.4 million barrels were used for domestic
consumption and 20.7 million barrels were shipped abroad by 27
tankers. (DJ)
March 13 In his annual stateoftheunion
address to Congress, Venezuelan President Rafael Caldera reiterates
his administration's determination not to use oil windfall tax
revenue on current spending and notes that his administration
has created a special account for these revenues in the Central
Bank of Venezuela. Separately, Venezuela's
Finance Ministry reports the country produced approximately 3.154
million barrels of oil per day (and exported 2.723 million barrels
per day) in 1996 -- well above its current OPEC production quota
of 2.359 million barrels per day. The government expects both
production and exports to increase in 1997 (to 3.25 million barrels
per day and 2.876 million barrels per day, respectively). (DJ)
March 14 Officials at Japan's
Ministry of International Trade and Industry predict a slowdown
in the country's petroleum
product demand growth over the next 5 years, to an average annual
rate of less than 1 percent (compared with 2.1 percent annually
over the past 5 years). Declines in demand for the electric
power sector (as new coal, nuclear, and liquefied natural gas
plants come onstream) are expected to partially offset continuing
increases in other oil-consuming sectors. (DJ)
March 14 Following the signing of a final agreement on
the maritime boundary between Australia and Indonesia, Australia's
Resources Minister Warwick Parer announces that his country will
move to release exploration blocks for petroleum exploration at
the earliest opportunity. He cites recent petroleum discoveries
in the Timor Sea which previously had not been considered for
petroleum exploration due to uncertainty over which nation had
jurisdiction. (DJ)
March 14 The prime ministers of three former Soviet republics
in Central Asia Kyrgyzstan, Kazakstan and Uzbekistan
sign a series of agreements aimed at forming an economic
union. (DJ)
March 15 Vietnam accuses China of violating its waters
in the South China Sea and demands the immediate removal of a
Chinese exploratory oil rig which allegedly has been operating
between the Vietnamese coast and China's Hainan island since the
beginning of March. (DJ)
March 15 Saudi Arabian Oil Company (Saudi Aramco) reports
that production from the Shaybah oil field will begin in June
1998, earlier than its initial plan which called for production
of 500,000 barrels per day by December 1999. The field is estimated
to contain 7 billion barrels of premiumgrade extra light
crude oil with 40-42 degree API gravity. The $2.5 billion development
program for Shaybah is the largest undertaking by Aramco in recent
years. (DJ)
March 17 Mexico President Ernesto Zedillo formally presents
the country's 1997 energy sector program, under which the government
will invest 69 billion pesos (about $8.7 billion at current exchange
rates) -- an increase of 41 percent in real terms over the amount
invested in 1996 and the highest level of investment in real terms
since 1990. The president also reiterates his support for private
sector participation -- but only up to a point. Mexico has invited
private companies to participate in the transport and distribution
of natural gas, electricity generation, and minority ownership
in the petrochemicals industry, but has refused to open up its
oil production to private investors. (DJ)
March 17 Ecuador authorizes Arco to extract oil from the
Villano field in block 10 of the country's
Amazon region. Initial production is expected to be 30,000 barrels
per day of oil. Arco also plans to build an 80,000-barrel-per-day
pipeline that will connect the field with Ecuador's main crosscountry
oil pipeline by the second quarter of 1999. (DJ)
March 18 Independent oil experts suggest that Mexico may
have overstated the size of its petroleum reserves by as much
as 30 percent since the 1970s, and indicate that Mexico's
latest reserves estimates are more in line with outside estimates
such as the U.S. Central Intelligence Agency's.
This is based on an analysis of a statistical report, released
earlier this month, in which Mexico reduced its estimates of proven
reserves in the Bay of Campeche to 15 billion barrels of crude
oil and 9.7 billion cubic feet of natural gas (from previous estimates
of 23.5 billion barrels of crude oil and 11.6 billion cubic feet
of natural gas in 1996). The report was the first Mexican reserves
report to be audited by independent experts. The Bay of Campeche
currently accounts for about 80 percent of Mexico's
oil and natural gas production. Reserve studies of other major
petroleum areas (including the Chincontepec and Tabasco-Chiapas
fields) are not expected to be completed until 1999. (NYT)
March 18 Mobil announces the start-up of oil production
from the second production facility on the Wandoo field (the Wandoo
B platform) on Australia's
North West Shelf, which will boost the field's
production to 40,000 barrels per day by May 1997 (current production
is 8,000 barrels per day). Australia's
Bureau of Agricultural and Resource Economics reports several
other projects are expected to approach full production capacity
in the next fiscal (July 1997 June 1998), boosting the country's
total production by 5.7 percent. New production will be concentrated
in the Gippsland Basin offshore southeastern Australia. Other
projects expected to come on stream after 1998 include the Elang/Kakatua
and the Laminaria/Corallina fields in the Timor Sea, which together
could add a further 170,000 barrels per day of production. (DJ)
March 18 Iraq grants Russia most favored nation status
to receive Iraqi oil exports in exchange for humanitarian goods.
Of the first 37 contracts approved by the United Nations in the
oil-for-food sale, 7 went to Russian companies representing almost
20 percent of the volume of oil in the sale. (DJ)
March 18 The United Nations approves the 38th and 39th
contracts for the sale of Iraqi oil under Resolution 986, the
Iraqi oilforfood sale, bringing the total dollar value
of contracts approved to date to about $1.9 billion of oil (out
of a total value of about $2.14 billion allowed over the first
6 months of the oil sale period). According to a Western diplomat,
Iraq had shipped 55.9 million barrels of crude oil worth about
$1.11 billion under the agreement through March 14, including
4.3 million barrels worth about $77.5 million since the second
90day period began on March 10. Most of the oil (about
63 percent) has been shipped through the Iraq-Turkey pipeline
from Kirkuk to Yumurtalik. (DJ)
March 18 An explosion damages Colombia's
Cano LimonCovenas oil pipeline near the Venezuelan border,
the second attack on the country's
oil facilities in less than two days. On March 17, an explosion
affected three pipelines used to carry oil, natural gas, and petroleum
products to Colombia's largest refinery in Barrancabermeja. British
Petroleum asks Colombian President Ernesto Samper to beef up security
near the Cusiana field, the country's largest (with estimated
reserves of 1.6 billion barrels of crude oil). Earlier this month,
Colombia's state oil
company Ecopetrol reported that the Cano LimonCovenas pipeline
was attacked 12 times in January and February, and the VasconiaCovenas
pipeline was attacked once in February. The attackers reportedly
are members of the National Liberation Army, a proMarxist
group that opposes the government's oil policies. (DJ)
March 18 India's
oil minister T.R. Baalu announces a new oil policy aimed at increasing
investment in the country's
oil sector. The new policy allows -- for the first time -- oil
exploration ventures that are 100-percent private and foreign-owned.
The previous policy required companies to form joint ventures
that gave staterun partners up to 40-percent equity when
they bid for acreage. (DJ)
March 19 The Czech government announces a 20-year agreement
to purchase 1.9 trillion cubic feet of natural gas from a Norwegian
consortium of natural gas exporters (Norsk Hydro, Saga Petroleum,
and Statoil). Shipments will begin May 1 at the rate of 49 million
cubic feet per day, increasing to 290 million cubic feet per day
(106 billion cubic feet annually). Currently, Russia's Gazprom
is the only supplier of natural gas to the Czech Republic. The
contract represents the first time Norwegian natural gas will
enter a market in central Europe. The agreement is part of the
Czech government's strategy
to diversify its imports of natural gas. (DJ)
March 19 Texaco announces that it has received approval
from the United Kingdom (U.K.) Department of Trade and Industry
to develop the Galley oil and gas field in Block 15/23a of the
U.K. North Sea. Initial production will begin in the first quarter
of 1998 and reach 43,000 barrels per day of oil equivalent. (DJ)
March 20 China's
official news service reports that China hopes to build an annual
natural gas production base of about 1.1 trillion cubic feet by
2005 (compared with current production of about 600 billion cubic
feet) and double its known onshore reserves of natural gas by
2000 (to about 70.6 trillion cubic feet). Exploration and development
work will focus on gasrich regions such as the ShaanGanNing
Basin in centralwestern China (with proven natural gas
reserves currently estimated at about 8.1 trillion cubic feet),
the Tarim Basin in the far west (with estimated proven reserves
of about 5.6 trillion cubic feet), and Sichuan province in the
southwest (with estimated proven reserves of 7.1 trillion cubic
feet). In addition, another 1.8 trillion cubic feet of natural
gas was recently identified in the eastern part of Qinghai province,
just east of Xinjiang. (DJ)
March 20 Yemen's Oil Minister Mohammad Said alAttar
reports that he expects Yemen's
1998 oil output to rise to 420,000 barrels per day from a current
average of 360,000 barrels per day. (REU)
March 20 Colombia's Mines and Energy Minister Rodrigo
Villamizar reports that his country's
oil output will top 800,000 barrels per day by the end of 1997.
(REU)
March 21 Great Lakes Gas Transmission announces plans
to double its capacity to transport Canadian natural gas to pipeline
interconnections in the United States no later than the winter
of 1999-2000, at a cost of $2.5 billion. The project, which involves
about 1,000 miles of pipeline and associated gas compression facilities
along the entire length of the company's
pipeline system, will allow shipment of an additional 2 billion
cubic feet per day of natural gas primarily to markets in the
northeastern United States and eastern Canada. (WSJ)
March 22 Iraqi Oil Minister Amer Rashid announces the
establishment of a new Iraq/Russian oil company which will work
independently of Iraq's national oil company, and reports that
other agreements would be signed with France and China. Russia
and France were Iraq's main arms suppliers before the Gulf War.
(DJ)
March 24 Royal Dutch/Shell reports that local protesters
have detained 127 of its staff operating in western Nigeria and
taken over six flow stations, disrupting 100,000 barrels per day
of crude oil production at six fields. The company plans to maintain
oil production at approximately 900,000 barrels per day by increasing
production from other fields in the eastern region. (DJ)
March 24 Presidents Geidar Aliev of Azerbaijan and Leonid
Kuchma of Ukraine sign 17 economic, cultural, and military cooperation
agreements, including a memorandum on cooperation in the oil and
gas industries under which Ukraine will build platforms for a
future Caspian Sea drilling project. (DJ)
March 25 The United Arab Emirates appoints Obeid bin Saif
alNasiri oil minister, replacing Rakadh Bin Salem who had
served as acting oil minister since May 1995. (DJ)
March 27 Trinidad and Tobago signs a production sharing
agreement with British Gas, Agip, and Deminex for the North Coast
Marine Area, a new hydrocarbon province off Trinidad's northern
coast. The consortium plans to drill two exploration wells in
the next 6 months. The area includes four undeveloped gas fields
(Hibiscus, Orchid, Iris and Poinsettia) with potential reserves
of more than 3 trillion cubic feet of natural gas. (DJ)
March 27 Shell reports it is losing 210,000 barrels per
day of production due to protests at its oil installations in
Nigeria (twice as much as originally estimated) but that exports
are not being affected because the company has large crude oil
stockpiles in the country. (DJ)
March 30 The stateowned Dubai Natural Gas Company
opens a new methyl tertiary butyl ether (MTBE) plant with a capacity
of 500,000 metric tons a year. The company's chairman, Hussain
Alsayegh, reports that most of the output from the $250 million
facility will be exported to the United States. (DJ)
April 1 A Shell spokesman confirms the company will declare
force majeure at its Nigerian Bonny terminal due to local protests
which disrupted 210,000 barrels per day of the company's
oil production. Although the protests have ended and production
is returning to normal, the backlog is temporarily delaying loadings
by 3 days. (DJ)
April 1 Enron begins producing natural gas from the Tapti
field offshore India. Production is expected to reach 150 million
cubic feet per day by the end of 1997 and continue for 25 years.
(DJ)
April 2 The U.S. Department of Energy announces plans to
offer two types of interest in the sale of the government portion
of the giant Elk Hills oil and gas field near Bakersfield, California:
a single "operating working interest" (representing
about three quarters of the government's
interest) and separate "non-operating
working interests" (each
representing 2 percent of the government's
interests). The sale, scheduled to be completed by February 10,
1998, is one of the largest divestitures of federal property in
the nation's history.
Current ownership is divided between the U.S. government and Chevron.
(DOE)
April 2 The Potential Gas Committee of the American Gas
Association estimates that 1996 U.S. natural gas reserves had
risen 6 percent from 1994 -- to 1,039 trillion cubic feet (representing
about 55 times the current yearly U.S. production levels). The
estimate includes: 165.1 trillion cubic feet of proven gas reserves
as estimated by the U.S. Department of Energy; 190.9 trillion
cubic feet of probable gas reserves from current fields; 240.7
trillion cubic feet of possible gas reserves from new fields;
309.8 trillion cubic feet of speculative gas reserves from frontier
fields; 13.4 trillion cubic feet of probable coalbedmethane
reserves; 36.3 trillion cubic feet of possible coalbed-methane
reserves; and 82.6 trillion cubic feet of speculative coalbed-methane
reserves. The committee also presents a higher estimate (1,232
trillion cubic feet) calculated using the statistically aggregated
mean values for reserves rather that its traditional methodology.
(DJ)
April 2 EssoProduction Malaysia announces the start-up
of production and sales from the Lawit gas field (150 miles offshore
Malaysia), whose production is expected to reach about 450 million
cubic feet per day upon completion of development drilling later
this year. The company plans to install compression facilities
in 1998 to achieve design capacity of 700 million cubic feet a
day. (DJ)
April 3 Colombia Gas System announces plans to build a
$600 million natural gas pipeline to carry Canadian natural gas
to U.S. markets in the northeast. The 380-mile Millennium Pipeline
would carry at least 650 million cubic feet per day beginning
in early 1999. (NYT)
April 3 TransCanada PipeLines and Northern States Power
Co. announce plans to build a $1 billion pipeline to pump natural
gas from Alberta, Canada to the U.S. Midwest. The 800-mile Viking
Voyageur Gas Transmission project would carry up to 1.2 billion
cubic feet per day of natural gas through Minnesota, Wisconsin,
and Illinois. (WSJ)
April 7 Express Pipeline begins shipments of Canadian crude
oil from Hardisty, Alberta to the Platte Pipe Line in Casper,
Wyoming. The 785-mile pipeline gives Canadian producers access
to U.S. markets in the Rocky Mountain and Midwest regions. Initial
design capacity is 172,000 barrels per day. (DJ)
April 8 Nigeria's military government approves the first
gasoline imports since September 1996, in response to a 2-week-old
fuels shortage. A dusk-to-dawn curfew in response to communal
troubles near the country's Warri refinery is impeding fuel deliveries.
(WP)
April 8 Turkmenistan President Saparmurat Niyazov
names Deputy Prime Minister Batyr Sardjaev as the new oil and gas minister.
(REU)
April 11 China and Vietnam conclude three days of expert-level
talks with no resolution over rights to potentially oilrich
waters claimed by both countries in the South China Sea. Earlier
in the week, a Chinese oil rig left an offshore area between Vietnam's
north coast and China's Hainan Island after completing one month
of exploration and drilling. (DJ)
April 14 Australia's minister for resources and energy,
Warwick Parer, announces the release of 34 new offshore oil and
gas exploration areas -- including 11 areas adjacent to the Zone
of Cooperation between Australia and Indonesia in the Timor Sea
and 6 areas in the Browse Basin offshore Western Australia. The
minister notes that this action "is
in keeping with the government's strategy to encourage more intensive
exploration in Australia's vast continental shelf."
(DJ)
April 14 An Iraqi Oil Ministry official reports that Iraq
expects to earn more than $80 billion from its contract with Russia
for the development of the West Qurna oil field in southern Iraq.
The contract, which was initialed in March and approved by Iraq's
National Assembly on April 13, calls for 560 wells which will
produce 4.4 billion barrels over 23 years. According to the official,
the part of the field being developed with Russia has 11.5 billion
barrels in reserves and the entire West Qurna field has reserves
of 38 billion barrels. The official states that production will
begin "soon" (initially about 250,000 barrels per day,
increasing to 600,000 barrels per day). (DJ)
April 17 Royal Dutch/Shell Group estimates Nigeria's proven
oil reserves rose to 24 billion barrels at the end of 1996 (8.3
percent higher than the 22 billion barrels estimated in 1995)
and reports that Nigerian production could reach 3 million barrels
per day by 2002 (and 4 million barrels per day by 2010) with an
annual investment of $4$6 billion (DJ)
April 18 An annual ranking of the world's top oil companies
by the Price Waterhouse World Energy Group and Petroleum Intelligence
Weekly indicates stateowned oil companies continue to
dominate the upstream sector of the world oil industry and are
beginning to catch up to the major publicly traded companies in
the downstream sector. Based on 1995 data, state-owned companies
accounted for 17 of the top 20 companies in terms of oil reserves,
8 of the top 10 companies in terms of oil production, and 4 of
the top 10 companies in terms of refining capacity. However, 4
stateowned companies (Petroleos de Venezuela S.A., Saudi
Aramco, Indonesia's Pertamina, and Kuwait's KPC) increased their
refining capacity by more than 1 million barrels per day in the
19931995 period, accounting for about half of the net global
increase in refining capacity during that time. (DJ)
April 19 A senior Iranian oil industry official reports
that Iran and Russia signed three agreements on cooperation in
the oil and gas industries: 1) an agreement whereby Russia's Gazprom
would invest directly in joint operations in the development of
Iranian gas fields, production capacity, refining, liquidation,
and transport of natural gas and associated extraction industries
in the Persian Gulf and other areas; 2) an agreement between a
newly formed Russian consortium and the National Iranian Oil company
(NIOC) for drilling in Iran's continental shelf; and 3) an agreement
between NIOC and the oil company of Tatarstan for cooperation
in preextraction and postextraction industries. (DJ)
April 21 Occidental Petroleum reports that Colombia's main
oil pipeline (Cano Limon-Covenas) was bombed 21 times in the first
quarter of 1997 (compared with a total of 45 attacks in all of
1996) and that the leftist National Liberation Army (ELN) is growing
increasingly active in the region near its operations. Occidental
operates the Cano Limon field in partnership with Ecopetrol (Colombia's
national oil company) and Shell. As a result of the repeated attacks,
Occidental plans to spend $20 million on security in 1997, including
a cooperation contract with the Colombian armed forces. (DJ)
April 22 U.S. Secretary of State Madeline Albright announces
sanctions to bar new U.S. investment in Burma (also known as Myanmar)
because of the continued oppression of opposition activists by
the country's military rulers. About 20 U.S. companies have direct
investment or employees in Burma, and the eight largest investors
are oil or mining companies: Atlantic Richfield, Baker Hughes,
East Asia Gold, Halliburton, McDermott International, Newmont
Mining, Texaco Inc., and Unocal. U.S. companies have a total of
$240 million in investment in Burma. Unocal, the single largest
investor, is a partner in a $1.2 billion joint venture led by
Total of France to develop several offshore blocks with significant
natural gas reserves. (DJ)
April 23 Pakistan's government approves a plan to privatize
13 stateowned companies (including its electrical and natural gas
holdings) over the next 6 months. (DJ)
April 24 Russian President Boris Yeltsin names reformist
First Deputy Prime Minister Boris Nemtsov to the additional post
of minister of fuel and energy. Nemtsov, who has called for radical
liberalization of the energy sector, replaces Pyotr Rodionov,
who resigned in March. (DJ)
April 24 Norwegian and British authorities agree on a natural
gas treaty covering the Frigg pipeline running from the North
Sea to St. Fergus in northern Scotland, reopening the way for
exports of Norwegian gas to the United Kingdom and Ireland. Disagreement
between the two governments on the use of the pipeline had previously
stopped Norway from making new gas sales. The Frigg pipeline currently
transports 230 billion cubic feet of gas per year, but capacity
can be boosted to 424 billion cubic feet per year. In addition,
the two governments reached a framework agreement on the use of
connector pipelines to facilitate the use of new oil and gas pipelines
which tie installations together on both sides of the British
and Norwegian gas sectors. (DJ)
April 25 Shell Nigeria declares force majeure on loadings
of Forcados crude oil, effective April 29-May 20, due to the loss
of about 90,000 barrels per day from the usual daily production
of 450,000-460,000 barrels per day of Forcados crude oil production.
The disruption is the result of an escalation of fighting between
local communities in the Warri region of Nigeria. (DJ)
April 25 Russian President Boris Yeltsin signs a decree
in support of the Caspian Pipeline Consortium (CPC). The decree
gives CPC a 16-year special exemption from rules mandating it
must convert foreignexchange revenues into rubles as part
of a package of support for the venture -- on condition that the
company reinvest its revenues in the project. The CPC is a $2
billion joint project of the governments of Russia, Kazakstan,
and Oman and a group of private oil companies set up to build
a 932-mile pipeline (planned capacity is 1.5 million barrels per
day) from Kazak oilfields on the eastern shore of the Caspian
Sea across southern Russia to an export terminal near the Black
Sea port of Novorossisk. (DJ)
April 28 The Middle East Economic Survey reports
that Iraq's State Oil Marketing Organization (SOMO) is continuing
to hold negotiations with international oil companies, despite
the fact that the 50 sales contracts approved so far have reached
the $2 billion target for the first 180 days under the oilforfood
agreement with the United Nations. According to United Nations
statistics, Iraq has sold 121.164 million barrels (averaging 673,000
barrels per day for the 6month period ending June 7) worth
a projected $2.142 billion (including $142 million in pipeline
fees for Turkey). (DJ)
April 28 Russian President Boris Yeltsin signs a decree
ordering sweeping reforms in the country's natural gas, electric,
rail and telecommunications sectors aimed at reducing rates and
stimulating investment. At a news conference announcing the decree,
First Deputy Prime Minister Boris Nemtsov explains that the state
will retain control over these key natural monopolies and will
not break up their national supply networks. With respect to natural
gas, the government will retain its 40-percent equity stake in
the monopoly RAO Gazprom indefinitely and work to strengthen Gazprom's
international position and boost its share price. Gazprom will
lose its monopoly right to develop new gas deposits (which instead
will be allocated at tenders open to competitors), will offer
equal access and competitive rates on its national pipeline network
to all producers (giving oil and other companies the opportunity
to compete in the gas business), and will be required to ensure
transparency of its finances with detailed annual financial reports.
(DJ)
April 28 Turkey signs a $12 billion agreement to boost
its imports of Russian natural gas (from the current level of
212 billion cubic feet) by 18 billion cubic feet in 1997, 71 billion
cubic feet in 1998, 106 billion cubic feet in 1999, and 159 billion
cubic feet in 2000. By the year 2001, Turkey's total gas purchases
from Russia will reach 494 billion cubic feet per year. The gas
will be shipped through the existing pipeline, which will be expanded
by two new joint ventures which will invest $1.5 billion to add
compressor stations and new stretches of pipe to double the capacity.
(DJ)
April 29 The U.S. Department of Energy begins soliciting
public comment regarding the future of the Strategic Petroleum
Reserve (SPR), which will be incorporated into a Statement of
Administration Policy on the SPR to be issued in September 1997.
(DJ)
April 29 In a report to Congress, the U.S. State Department
estimates that the Caspian Sea basin contains proven recoverable
oil reserves of 15.6 billion barrels and possible reserves of
an additional 163 billion barrels (compared with more generally
used estimates of 27.5 billion barrels of proven oil reserves
and an additional 40-60 billion barrels of estimated reserves).
According to the report, Kazakstan has the largest reserves in
the region (10 billion barrels proven, 85 billion barrels possible),
followed by Turkmenistan (1.5 billion barrels proven, 32 billion
barrels possible), Azerbaijan (3.6 billion barrels proven, 27
billion barrels possible), Iran (no proven reserves, 12 billion
barrels possible) and Russia (no proven reserves, 5 billion barrels
possible). (WSJ)
April 30 For the fourth year in a row, three Organization
of Petroleum Exporting Countries (Iran, Iraq, and Libya) are named
on the U.S. State Department's list of the top sponsors of international
terrorism (other countries on the list are Cuba, North Korea,
Sudan and Syria). Appearance on the list automatically triggers
U.S. government sanctions, including: a ban on military sales
and aid; controls over export of dualuse items that can
be used for either military or civilian purposes; prohibitions
on economic aid, and miscellaneous financial and other sanctions.
(DJ)
April 30 Shell Nigeria reports that four out of the five
flow stations that had shut in 80,000 barrels per day of Forcados
crude oil production in the Western Delta area of Nigeria since
April 25 have been reopened. The Warri River flow station
is the only one that is still shutin. (DJ)
May 1 In its regular 60day review, the United Nations
Security Council votes to maintain sanctions on Iraq. This is
the 37th review since sanctions were first imposed in 1990. This
vote, however, does not affect the humanitarian oil sales. (DJ)
May 2 Shell Nigeria announces the release of 15 contractor
staff held hostage for 12 days by a local community in Nigeria's
Western Delta and the reopening of flow stations that had been
disrupted by unrelated civil unrest in the area since April 25.
The company expects output of Forcados crude oil, which initially
was disrupted by 80,000 barrels per day, to return to normal within
a few days. (DJ)
May 2 South Korea Development Corporation buys a 15-percent
stake in the North Sea's Captain field from Texaco Inc. The
purchase will provide a steady supply of high-sulfur crude oil
that will be refined into fuel oil for Korean power generation
and will enable the country to develop a strategic fuel reserve.
(NYT)
May 2 British Petroleum announces a new oil discovery,
the Liberty field, off the north coast of Alaska. Recoverable
reserves are estimated at 120 million barrels. (NYT)
May 4 Chinese deputy Vice Premier for trade Li Lanqing
and Iranian vicepresident Mohammad Hashemi sign a new trade
protocol under which exports of Iranian crude oil to China would
be increased from the current level of 70,000 barrels per day
to 100,000 barrels per day (200,000 barrels per day by 1999).
China also accepts an offer from Iran to equip a Chinese oil
refinery to handle high-sulfur Iranian crude oil. (DJ)
May 5 The New York Mercantile Exchange (NYMEX) adds Colombia's
Cusiana crude oil as a deliverable for its light, sweet crude
oil futures contract, effective with the July 1997 contract.
(DJ)
May 6 The Energy Information Administration releases the
International Energy Outlook 1997 which forecasts worldwide
demand for crude oil and natural gas will grow steadily through
2015. Crude oil demand is projected to average 77.8 million barrels
per day by 2000 and 104.6 million barrels per day by 2015. Natural
gas demand is projected to reach 98.1 trillion cubic feet by 2000
and 144.5 trillion cubic feet by 2015. This represents an average
annual demand increase of 2.1 percent for crude oil and 3.1 percent
for natural gas between 1995 and 2015. (DJ)
May 6 The director of exploration and production for Petrobras,
Brazil's stateowned oil company, reports that the company
plans to spend $3 billion per year to increase its production
to 1.6 million barrels per day by 2001 (from the current level
of 900,000 barrels per day and a projected level of 1.2 million
barrels per day in 1998). Editor's
note: The Energy Information Administration estimates that Brazil
produced 840,000 barrels per day of crude oil and 35,000 barrels
per day of natural gas plant liquids in March 1997. (DJ)
May 7 Mexico's energy regulatory commission (CRE) awards
the concession to distribute natural gas in the northern state
of Sonora to a U.S.Mexico consortium, including U.S. company
KN Energy Inc. (DJ)
May 8 Elf Petroleum Nigeria begins construction of its
Obite Gas Project, which will supply 253 million cubic feet per
day of natural gas to the Nigeria liquefied natural gas plant
being constructed at Bonny. The project, which is scheduled for
completion in 1999, also involves the construction of an 87-mile
pipeline to Bonny and production of about 18,000 barrels per day
of condensates. (DJ)
May 9 Colombia's national oil company, Ecopetrol, reports
that guerrillas have attacked the country's largest oil pipeline
(Cano LimonCovenas) 24 times so far in 1997, spilling a
total of 78,000 barrels of crude oil and reducing production by
500,000 barrels. Colombian armed forces blame the National Liberation
Army for 460 separate attacks since the pipeline started operating
in 1986. (DJ)
May 10 General Binford Peay, head of the U.S. Central
Command, warns that U.S. forces will respond if Iran tries to
make good on a threat to close the Persian Gulf's Strait of Hormuz
if it felt threatened by the United States. Iran issued the threat
earlier in May, following reports that U.S. officials were considering
missile strikes against Iran if it was found responsible for a
truck bombing that killed 19 American servicemen in Saudi Arabia
in 1996. In addition, Iran held military exercises in the Gulf
to demonstrate its naval capability. The United States has 18,550
Air Force, Army, Navy, and Marine personnel on 14 ships or at
installations in Saudi Arabia, Kuwait, Qatar, and Bahrain. The
Strait of Hormuz is the gateway to about onefifth of the
world's oil supply. (DJ)
May 10 Qatar Liquefied Gas Company (Qatargas) signs a
contract with Spain's Enagas for the sale of 420,000 tons of liquefied
natural gas (LNG) -- 32,300 tons per month for delivery over a
13-month period, beginning September 1997. This will be the company's
first LNG sale to the European market. Current capacity is 6
million tons of LNG per year, with most of the output committed
to Japan's Chubu Electric Power Company under a 25year contract.
(DJ)
May 10 Turkey and Iraq sign a preliminary agreement to
build an 807-mile pipeline to carry Iraqi natural gas to Turkey's
Mediterranean port of Ceyhan. The project must secure $2.5 billion
in financing prior to implementation. (DJ)
May 10 Libya's oil minister reports that his country has
lost about $3 billion in oil revenues since the United Nations
imposed sanctions in 1992. The sanctions (which limit diplomatic
contacts, ban arms sales, and prohibit air traffic in and out
of Libya) are intended to force the surrender of two Libyan suspects
wanted in connection with the 1988 bombing of Pan Am Flight 103
over Lockerbie, Scotland, in which 270 people were killed. Editor's
note: In November 1993, United Nations sanctions were extended
to include a freeze on Libyan funds overseas, a ban on the sale
of equipment for oil and gas export terminals and refineries,
and tougher restrictions on civil aviation and the supply of arms.
(DJ)
May 13 Russian President Boris Yeltsin signs a decree
substantially increasing the state's role in managing natural
gas giant RAO Gazprom. The order names First Deputy Prime Minister
Boris Nemtsov to head a special commission charged with setting
government policy at the 40-percent stateowned company (Russia's
largest) and calls on the government to draft new regulations
on foreign investment in Gazprom shares. (DJ)
May 14 Yemen's oil minister, Mohammed alAttar, reports
that his country's oil production capacity is expected to increase
to 500,000-550,000 barrels per day by 2000. Editor's
note: The Energy Information Administration estimates that Yemen
produced 410,000 barrels per day of crude oil in March 1997.
(DJ)
May 14 The leaders of Iran, Turkey, and Turkmenistan sign
an agreement under which 1.059 trillion cubic feet per year of
Turkmen natural gas would be exported to Turkey, via Iran, for
shipment to European markets. (DJ)
May 15 Turkish Energy Minister Recai Kutan reports that
Turkey's state pipeline company, Botas, has started construction
work for the first phase of a pipeline that will transport Iranian
gas into Turkey. He adds that Iran has also begun building its
part of the pipeline under the $20 billion, 22year gas project
announced by the two countries in August 1996. (DJ)
May 15 The managing director of Shell Exploration and
Production Namibia reports that the company has applied to Namibia's
Ministry of Mines and Energy to have the Kudu gas field declared
an official petroleum field. This marks the first step in developing
the field, located off the country's southern Atlantic coast,
which is believed to contain sufficient natural gas to power a
planned 750-megawatt power plant in Namibia for at least 20 years.
(DJ)
May 15 The Canadian Gas Potential Committee estimates
that Canada has 570 trillion cubic feet of discovered and undiscovered
natural gas in conventional and unconventional reservoirs (including
coalbed methane, tight gas reservoirs, and shale gas). The reserves
represent approximately 50 years of supply from conventional sources
and another 50 years from unconventional sources. Most of the
natural gas is located in the Western Canada Sedimentary Basin.
(DJ)
May 15 Tosco Corporation announces the reopening of its
Marcus Hook refinery in Trainer, Pennsylvania, after a $100 million
refurbishment program. Tosco bought the refinery in 1995 from
British Petroleum, and shut it down in January 1996 after failing
to reach an agreement with union workers over a new labor contract.
In 1996, Tosco said it was cutting the refinery's crude processing
capacity to 150,000 barrels per day from the previous level of
190,000 barrels per day. (DJ)
May 16 A final agreement creating the Caspian Pipeline
Consortium (CPC) is signed by project participants: Russia (24
percent), Kazakstan (19 percent), Chevron Corp. (15 percent),
AO Lukoil/Arco Corp. (12.5 percent), Mobil Corp. (7.5 percent),
AO Rosneft/Shell Corp. (7.5 percent), Oman (7 percent), Agip
SpA (2 percent), British Gas PLC (2 percent), Oryx Corp. (1.75
percent), and Kazakstan Pipeline Ventures, a joint venture of
Kazakstan's state oil company and Amoco Corp. (1.75 percent).
The Russian government plans to transfer its stake to two Russian
oil companies, AO Lukoil and AO Rosneft. CPC plans to begin building
a 932-mile pipeline to transport crude oil from the Caspian region
to Russia's Black Sea coast in 1998 and begin shipping around
558,000 barrels per day of oil in 1999 (planned peak capacity
is 1.4 million barrels per day). (DJ)
May 16 USX Corp. and Ashland Inc. announce plans to combine
most of their downstream oil businesses, creating one of the largest
U.S. refiners and continuing an industry trend to consolidate
gas station operations. This would be accomplished by a joint
venture (for which Ashland Petroleum Co. has signed a letter of
intent with Marathon Oil Co., a unit of USX) involving 5,400 gas
stations and 6 percent of U.S. refining capacity. (WSJ)
May 20 President Clinton signs an executive order barring
new U.S. investment in Burma (also known as Myanmar), effective
May 21 and renewable annually. U.S. companies have invested about
$250 million in Burma, primarily in the oil and gas sector. The
biggest U.S. investor is Unocal, which is building (with France's
Total) a $1.2 billion pipeline from Burma's Yadana natural gas
field to an electric power plant in Thailand. (DJ)
May 21 The U.S. Department of Energy authorizes its financial
advisors to begin contacting prospective bidders for the Elk Hills
Naval Petroleum Reserve, one of the largest producing fields in
the lower 48 states. Bids must be received by October 1, 1997,
and the sale is expected to close by February 10, 1998. (DJ)
May 22 A Mobil Oil executive reports that his company
has relocated three rigs outside Nigeria, and may relocate a
fourth, because of the Nigerian government's failure to maintain
payments for its share of joint venture production costs. Most
of Nigeria's oil production (currently 2.2 million barrels per
day) comes from joint ventures with international oil groups led
by Shell, Mobil, and Chevron. (DJ)
May 23 The International Energy Agency (IEA) issues a
communique reaffirming that oil security remains a serious concern,
particularly given the prospect of increasing import dependence
and the increasing concentration of remaining oil reserves in
the Middle East. The IEA states that spare crude oil production
capacity is now lower than before the 1990 Gulf crisis, and the
potential for further fuel switching has diminished. The communique
was issued following a meeting of the IEA's Board of Governors,
at which Hungary was welcomed as the organization's 24th member.
(DJ)
May 24 Mohammad Khatami, a moderate cleric, is declared
the winner in Iran's presidential election. He will succeed President
Hashemi Rafsanjani, who steps down in August after two, fouryear
terms. (DJ)
May 27 Former Iraqi oil minister Issam AlChalabi
estimates Iraq needs $5 billion of outside investment and two
to three years for its oil industry to restore production to the
level prior to the imposition of United Nations sanctions (3.8-4.2
million barrels per day). He also indicates that it would take
5 years and $30-50 billion to achieve production capacity of 5.5
million barrels per day. (DJ)
May 28 The United Kingdom is reported to have added at
least 161,000 barrels per day of new offshore oil production in
1997. New oil field startups could add up to 190,000 barrels
per day more by the end of the third quarter of 1997, and another
84,000 barrels per day at the beginning of the fourth quarter.
(DJ)
May 28 West Africa magazine reports that a widespread,
complicated series of interethnic claims and conflicts stretching
across state and local government boundaries in Nigeria's Niger
Delta leaves many onshore and offshore oil and gas projects vulnerable.
This area produces about 37 percent of Nigeria's onshore oil
production. (DJ)
May 28 Russian President Boris Yeltsin signs a decree
designed to limit foreign investment in natural gas giant RAO
Gazprom. (DJ)
May 28 Royal Dutch/Shell Group (RD) reports that the Cornea
oil structure, located in the Browse Basin offshore northwestern
Australia, could contain up to 2.67 billion barrels of oil. (DJ)
May 30 Iraq's Oil Minister, Amer Mohammed Rasheed, reports
that the full allotment of $2.14 billion in Iraqi oil (including
$140 million for maintaining oil pipelines) has been exported
under the United Nations' 6-month oilforfood program.
Oil sales totaled 120 million barrels under 51 contracts with
international companies. The United Nations is expected to renew
the agreement, which began in December 1996 and expires in early
June. (DJ)
June 1 Oman and Iran agree to draw up a joint development
plan for the Bukha/Hengam oil field which is jointly owned by
the two countries. (DJ)
June 1 Shell Oil Company and Mobil Corporation combine
their California exploration and production units into a joint
venture company, Aera Energy LLC (58.6 percent Shell, 41.4 percent
Mobil). With proven reserves of about 1 billion barrels of oil
equivalent and production of about 250,000 barrels per day, the
venture is now the largest oil producer in California. (WSJ)
June 2 Amoco Corporation announces plans to sell about
15 percent of its domestic oil and natural gas reserves to allow
the company to focus future efforts on six regions: Trinidad (where
it is expanding a liquefied natural gas plant); Venezuela; the
Eastern Mediterranean (especially Egypt's
Nile Delta); the Caspian Sea; heavy oil projects in Alberta, Canada;
and deep-water projects in the Gulf of Mexico. The reserves --
located in Wyoming, Colorado, New Mexico, Oklahoma, and along
the coast of the Gulf of Mexico -- total about 450 million barrels
of oil equivalent (about two-thirds natural gas) and provide about
10 percent of the company's
domestic production. (WSJ)
June 3 Japan's Minister of International Trade and Industry
says Japan needs to diversify the sources of its oil supplies
further to improve its energy security. (DJ)
June 4 In a unanimous vote, the United Nations Security
Council renews for another 180-day period its "oilforfood"
initiative with Iraq. Under the resolution, Iraq may sell $2 billion
worth of oil to buy food, medicine and other necessities to alleviate
civilian suffering under the sanctions imposed when it invaded
Kuwait in 1990. (WP)
June 4 China signs separate agreements with Kazakstan and
Iraq to secure oil supplies into the next century. The agreements
cover a $4.3 billion investment in Kazakstan's
Aktyubinsk oil enterprise over the next 20 years, a planned oil
pipeline from Kazakstan to China, and the development of the Ahdab
oil field in southern Iraq (1 billion barrels at a cost of $1.2
billion). (WP)
June 5 Russia's
Deputy Prime Minister Alfred Kokh announces plans to sell an additional
15 percent share of state-owned oil producer AO Lukoil. No details
are provided. (WSJ)
June 6 Australian Prime Minister John Howard announces
that his country will phase out the use of lead in automobile
gasoline by 2010. (DJ)
June 6 Venezuela completes a 5-day auction of 20 marginal
oil fields in its third round of sales to foreign investors, earning
about $2 billion (twice as much as expected). Successful bidders
receive a 20-year production contract with certain minimum investment
levels and must pay set royalties and fees for each barrel of
oil produced. They include U.S. companies Atlantic Richfield,
Chevron, Pennzoil, and Phillips Petroleum; British company Lasmo;
and the China National Petroleum Company. (WSJ)
June 10 Chevron Corporation signs a production-sharing
agreement to perform seismic tests and drill wells deep beneath
China's second largest
oil field (Shengli). This is the first onshore exploration pact
in China for Chevron, which already has offshore leases in China's
Bohai Gulf and the South China Sea. (WSJ)
June 10 The National Iranian Oil Company agrees to spend
$250 million to upgrade a large refinery in southern China to
increase its capacity for processing Iranian crude oil. (WSJ)
June 10 Kazakstan and Azerbaijan agree to build a 1600-mile
pipeline along the floor of the Caspian Sea to ship 315-350 million
barrels per year of Kazak oil via Turkmenistan to Baku in Azerbaijan.
The pipeline would continue overland across Georgia and Turkey
to the Mediterranean Sea. Construction is slated to begin in 2000
and be completed within 3 years. (WP)
June 11 Canadian Prime Minister Jean Chretien names Ralph
Goodale the country's new natural resources minister. (DJ)
June 13 Triton Energy reports that it expects combined
production from Colombia's
Cupiagua and Cusiana fields to reach 500,000 barrels per day in
early 1998 (currently 185,000 barrels per day). The company had
planned to achieve this goal by the end of 1997, but has recently
encountered problems in construction and drilling operations in
the Cupiagua field. (WSJ)
June 18 Turkey and Ukraine sign a deal to build a pipeline
from Turkey's Mediterranean coast to its Black Sea coast for oil
shipments to Ukraine. (DJ)
June 19 The U.S. Supreme Court rules in favor of the Federal
Government in an 18-year-old boundary dispute with Alaska over
control of offshore areas along the Arctic coast. The decision
effectively prevents development of the area's
oil and natural gas reserves, as the Federal Government has said
it would not permit drilling off the coast of wildlife refuges.
(NYT)
June 19 Exxon appeals the $5.3 billion verdict awarded
in 1994 to fishermen, native Alaskans, and others harmed by the
1989 Exxon Valdez oil spill. (NYT)
June 20 Talisman Energy receives permission to develop
the Ross oil field in the United Kingdom sector of the North Sea.
The field, which contains estimated reserves of 60-100 million
barrels of oil and 20-30 billion cubic feet of natural gas, is
expected to begin producing in September 1998 and reach peak production
of 40,000 barrels per day in 1999. (WSJ) June 20 Russian President
Boris Yeltsin orders cuts of up to 40 percent in natural gas prices for
businesses that pay their overdue Gazprom bills in cash by the end of the year.
High customer debt (estimated at $12.15 billion) makes it difficult for the
company to pay its national tax arrears. (WSJ) June 24 Russia's State Duma
(lower house) approves a long-awaited law that would allow production-sharing
agreements for development of major natural resource deposits, including five
oil fields (Samotlor, Krasnoleninsk, Romashkinskoye, Prirazlomnoye, North
Sakhalin), the Kuranakhskoye gold field, and the Yakovlevskoye iron-ore deposit.
Investment in these projects is expected to total $16 billion. The legislation
now goes to the upper house for consideration, which is expected to consider the
measure this fall. (DJ) June 25 Partners in
Australia's Stuart Oil Shale project announce that they have obtained financing
to proceed with the first phase of development for what could become the world's
first commercial project extracting crude oil from oil shale. If successful, the
project would produce 85,000 barrels per day within 10 years. Partners are
Canada's Suncor (50 percent) and two Australian companies (Southern Pacific and
Central Pacific, 25 percent each). (WSJ) June 26 The Organization of
Petroleum Exporting Countries (OPEC) extends its current output ceiling of
25.033 million barrels per day of crude oil through the end of 1997. The
official communique indicates quota adherence will be "closely monitored" and
announces that the next meeting would take place November 26 in Jakarta,
Indonesia. OPEC Secretary General Rilwanu Lukman tells a news conference after
the meeting that OPEC's target price remains at $21.00 per barrel. Individual
quotas remain as follows (in millions of barrels per day): Saudi Arabia, 8.0;
Iran, 3.6; Iraq, 1.2; Venezuela, 2.359; Nigeria, 1.865; Indonesia, 1.33; Kuwait,
2.0 ; Libya, 1.39; United Arab Emirates, 2.161; Algeria, 0.75; and Qatar, 0.378.
(DJ) June 26 Iranian Oil Minister
Gholamreza Aghazadeh reports that U.S. sanctions to deter Iran's ability to
attract outside capital "haven't worked at all" because creative financing
methods allow foreign companies to avoid punishment under the Iran and Libya
Sanctions Act (which was passed in 1996 and applies to investments of $40
million or more). He cites the use of buyback contracts under which companies
pay for development rights in oil rather than in dollars, and direct financing
by foreign banks (which are not covered by the sanctions law). (DJ) June 26 The government of
Portugal confirms the sale of a 27.5 percent stake in petroleum company Petrogal
to Saudi Aramco. Under an agreement scheduled to be finalized by the end of
1997, Saudi Aramco would supply Petrogal's sour crude requirements under a
long-term contract. Petrogal operates two refineries (with capacity totaling
300,000 barrels per day) and supplies 50 percent of the country's petroleum
products. Portugal's government retains a 45 percent stake (down from 55
percent) and Petrocontrol, a private consortium of shareholders, retains a 27.5
percent stake (down from 45 percent). A leading Portuguese newspaper estimates
the reference value of the Saudi share at $1.4-1.5 billion. (DJ) June 27 International Energy
Agency head Robert Priddle says he "regrets" the previous day's action by the
U.S. House Appropriations Committee approving a $209 million sale of crude oil
from the U.S. Strategic Petroleum Reserve. Priddle notes that U.S. strategic
stocks have already dropped from a 90-day supply to less than 70 days currently,
following earlier sales of 30 million barrels of crude oil. (DJ) June 27 China's Premier Li
Peng and Russia's Prime Minister Viktor Chernomyrdin sign a series of agreements
to boost trade and economic relations between their countries. Included is a
planned $4-5 billion project involving the development of Russian natural gas
reserves in the Irkutsk region of western Siberia to supply up to 1 trillion
cubic feet per year via pipeline to China's coast. (DJ) June 30 Iran's top military
commander says his country does not intend to start a war with the United
States, but promises to turn the Persian Gulf into a slaughterhouse if attacked.
The pledge follows a series of U.S. warnings about Iran's potential to use
missiles to close the Strait of Hormuz to oil tankers and other shipping.
(DJ) June 30 Nigeria's government
authorizes the Nigerian National Petroleum Company to swap 100,000 barrels per
day of crude oil for petroleum product imports, reversing a year-earlier
decision banning the practice due to widespread abuses. The action comes one
week after the government authorized importing 33 cargoes of oil products to
ease fuel shortages associated with problems at domestic refineries. (DJ)
July 1 The Russian
government begins offering many of its remaining oil-industry holdings in a
series of auctions and investment tenders expected to raise $780 million by
mid-December 1997. The privatizations, which are open to foreign bidders,
include Russia's stakes in AO Vostsibneftegaz (38 percent), AO Vostochnaya
Neftyanaya (51 percent), AO Sibur (36.28 percent), AO Tyumenskaya Neftyanaya
(48.68 percent), AO Komitek (27.1 percent), and AO Norsi-Oil (45.45 percent).
(WSJ) July 1 The British colony of
Hong Kong reverts to Chinese rule as a Special Administrative Region. Chinese
Prime Minister Li Peng declares Beijing's rule of law will protect foreign
interests in post-handover Hong Kong. China has promised laissez-faire oversight
under the principle of "one country, two systems." (DJ) July 5 China National
Petroleum Corporation (CNPC) reports plans to intensify exploration in eight
basins that contain 80 percent of the country's onshore oil and gas reserves
while continuing its efforts to secure overseas supplies. According to CNPC, the
company has verified 25.6 billion barrels of crude oil reserves and 22.6
trillion cubic feet of natural gas reserves in the past 6 years. (DJ) July 6 The government of
India approves the sale of shares in four state-run companies, including Gas
Authority of India Ltd. and Indian Oil Corp. (DJ) July 9 Corpoven (a unit of
Venezuela's state-owned oil company) signs a formal agreement with three
U.S.-based companies (Atlantic Richfield, Phillips Petroleum, and Texaco)
creating a $3.5 billion joint venture to extract and upgrade 197,000 barrels per
day of extra-heavy crude oil in the Hamaca Zone of Venezuela's Orinoco Belt.
Drilling is expected to start in late 1998, with oil production beginning in
1999 at an initial rate of 35,000-40,000 barrels per day. The first of two
upgrading facilities, designed to produce a grade similar to Alaskan North Slope
crude oil, is scheduled to be completed by 2002. (DJ) July 11 The German cabinet
approves a supplementary budget that includes proposals to sell part of the
government's strategic oil reserves to meet European Monetary Union criteria for
a budget deficit of 3 percent of gross domestic product. Germany plans to sell
about $224 million worth of reserves in 1997 (roughly 15 million barrels of
oil), and additional volumes in 1998 and 1999. (DJ) July 11 A tripartite
agreement on the transportation of Caspian Sea crude oil via the
Baku-Grozny-Novorossiysk pipeline is signed in Baku by Russian Oil and Energy
Minister Boris Nemtsov and representatives of Azerbaijan's state oil company and
the Chechen oil company. The pipeline, which will pump oil from Azerbaijan
across Chechnya to a Russian export terminal in Novorossiisk, is expected to be
operational within one month. (DJ)
July 15 The president of the
Colombian Petroleum Association declares that repeated attacks on Colombia's oil
installations have led to a "critical" situation for private oil companies
operating in the country. This is in reaction to three attacks in the last 10
days, which forced state-owned oil company Ecopetrol and field operator
Occidental Petroleum Corporation to close down production and declare force majeure for all export commitments in the Cano
Limon field. The Cano Limon-Covenas pipeline has been attacked 470 times since
it began operations in 1986, causing damage in excess of $1.5 billion; however,
this is the longest time field operations have been suspended due to the
attacks. (DJ) July 15 Guatemala awards oil
exploration contracts in its northern Peten province to four foreign firms
(including U.S.-based Oil Technology Service) and one Guatemalan company.
Minister of Energy and Mines Leonel Lopez Rodas expects company investments of
$128 million in nine potential fields in 1997 and 1998 will make Guatemala
self-sufficient in energy supply. Guatemala previously awarded 23 drilling
contracts to private firms. (DJ) July 16 The Brazilian Senate
approves the creation of a regulatory body (the National Petroleum Agency)
required for implementation of a 1995 constitutional amendment allowing private
domestic and foreign enterprises to compete with federally controlled oil
conglomerate Petroleo Brasileiro SA (Petrobras). The legislation also creates a
National Energy Policy Council. (DJ) July 16 Tengizchevroil,
operator of Kazakstan's Tengiz field, awards a $250 million contract for
construction of a new oil and gas processing plant that will increase production
capacity by 30 percent (from 160,000 barrels per day currently to 240,000
barrels per day by the end of 1999). (DJ) July 17 Texaco, the
government of Saudi Arabia, and the U.S. unit of Royal Dutch/Shell agree to
merge their U.S. East Coast and Gulf Coast refining and marketing businesses in
a joint venture company pooling four refineries (with total capacity of 823,000
barrels per day) and 14,717 gasoline stations currently owned by Shell and Star
Enterprise (a joint venture between Texaco and Saudi Aramco). Under the
agreement, Shell would own 35 percent of the new company, and Texaco and Saudi
Arabia would hold 32.5 percent each. (WSJ) July 19 Iran opens an oil
jetty for petroleum product exports at Nowshahr port on the Caspian Sea.
According to Iran's managing director of Ports and Shipping Organization, the
country plans to increase its total port capacity to 4 million barrels per day
by the year 2022 (currently 800,000 barrels per day). (DJ) July 22 The first shipments
of oil produced from Kazakstan's Tengiz field arrive at terminals on the Black
Sea in Novorossiysk (Russia) and Batumi (Georgia) for subsequent export through
the Bosphoros Strait. Volumes total between 100,000 and 150,000 barrels per day.
(DJ) July 23 A senior official
with Royal Dutch/Shell reports that the company plans to spend at least $10
billion in Latin America by the year 2005, primarily in four countries: Peru,
Venezuela, Brazil and Argentina. Major projects include Peru's Camisea fields
and the Bolivia-Brazil natural gas pipeline. (DJ) July 23 The U.S. State
Department rules that Turkey's August 1996 agreement to purchase $23 billion
worth of natural gas from Iran over a 20-year period does not violate the Iran
and Libya Sanctions Act. In a May 1997 memorandum of understanding with Iran and
Turkmenistan, Turkey modified the original arrangement so that the natural gas
will be purchased from Turkmenistan rather than Iran. (DJ) July 23 Officials from
Turkmenistan, Pakistan, Unocal, and Delta (a Saudi oil company) sign an
agreement to build a natural gas pipeline from Turkmenistan across Afghanistan
to Pakistan (871 miles). Under the agreement, a consortium will be formed by
October 1997, construction will begin by December 1998, and the project will be
completed by 2001 at an estimated cost of $2.0-2.7 billion. The pipeline will
carry up to 706 billion cubic feet of natural gas annually from Turkmenistan's
largest natural gas fields, at Daulatabad. (DJ) July 24 The government of
Chile approves CMS Energy Corp.'s $650 million Atacama project, which will
transport natural gas via pipeline from northern Argentina across the Andes
Mountains to two new natural gas-fired electric generating units at Mejillones
in northern Chile. The project is being built in conjunction with Chile's
Empresa Nacional de Electricidad SA. Construction of the pipeline will begin in
the fourth quarter of 1997 and commercial operations will begin by early 1999.
(DJ) July 25 Presidents Gonzalo
Sanchez de Lozada of Bolivia and Fernando Henrique Cardoso of Brazil sign
construction contracts for the longest natural gas pipeline in South America --
a 1900-mile pipeline from Rio Grande, Bolivia to three Brazilian cities (Sao
Paolo, Curitiba, and Porto Alegre). The 32-inch diameter pipeline, estimated to
cost about $2 billion, is scheduled to begin operating in 1999 at an initial
rate of 283 million cubic feet per day, increasing to 565 million cubic feet per
day after 7 years. Major contractors include Enron, Bechtel and Royal
Dutch/Shell. (DJ) July 26 Iran's President
Hashemi Rafsanjani formally inaugurates the 232,000-barrel-per-day Bandar Abbas
refinery -- the country's eighth oil refinery. The facility, which will run
Iranian Heavy crude oil, has partially started up and is scheduled to be fully
operational in March 1998. Iran hopes to become selfsufficient in gasoline,
kerosene, jet fuel, and diesel, and begin exporting petroleum products at that
time. Domestic petroleum demand averages about 1.1 million barrels per day. The
country's refining capacity (excluding Bandar Abbas) totals about 1.2 million
barrels per day. (DJ) July 28 Egypt's Petroleum
Minister Hamdy el-Banbi announces that the private sector will be allowed to
launch distribution networks for natural gas as part of the government's plan to
substitute natural gas for oil. (DJ) July 28 Azerbaijan's
President Heydar Aliyev, on his first visit to the United States, repeats his
support for Turkey's port of Ceyhan on the Mediterranean Sea to be the main
export route for his country's Caspian Sea crude oil. (DJ) July 29 State-owned oil
company Petroleos de Venezuela (PdVSA) signs agreements turning over operating
contracts for 17 marginal crude oil fields to 17 national and international
consortiums, the winners in the country's third round of auctions for 20
marginal oil field contracts held in June 1997. The auction raised $2.08
billion. Two fields received no bids and the winning bid on one field (Mata) was
later revoked by PdVSA. (DJ) July 30 The U.S. Federal
Energy Regulatory Commission approves several natural gas pipeline projects for
delivery of Canadian natural gas to the United States: 1) the U.S. portion of
Alliance Pipeline Ltd.'s new $3.6 billion pipeline from British Columbia and
Alberta to the Midwest (conditional upon Canadian regulatory approval); 2)
expansion and extension of Northern Border Pipeline from the Canadian border to
the Chicago area; and 3) a portion of the Maritimes & Northeast Pipeline
from Sable Island, Nova Scotia, to markets in New England. (DJ) July 31 Russian state-owned
oil company AO Rosneft announces it is pulling out of a $1 billion oil deal
(signed July 4) to develop Azerbaijan's Kyapaz field, in the Caspian Sea. The
deal has been challenged by neighboring Turkmenistan, which claims the field as
its own (under the name Serdar). (DJ)
August 1 Azerbaijan signs
production-sharing contracts with Chevron Corporation, Exxon Corporation, Mobil
Corporation, and Amoco Corporation. Officials from Azerbaijan value the Caspian
Sea projects at more than $10 billion. Mobil will develop the Oguz exploration
area, Chevron the Zeynabdin Tagiyev area, Exxon the Nakhchivan area, and Amoco
the Inam Prospect. (WSJ) August 1 United Nations
Secretary-General Kofi Annan approves Iraq's request to add the Iraqi-Syrian
border as an entry point for food and humanitarian aid under the oil-for-food
program. The request provides further evidence of re-established official ties
between the two countries. Ties were severed after Syria supported Tehran during
the Iran-Iraq war, and this new link between Iraq and Syria follows the
reopening in mid-June of three border points that were shut in 1980. (DJ) August 1 Mobil Corporation
announces a favorable $78.3 million judgement in litigation with the federal
government. The lawsuit involved Mobil's offshore North Carolina federal Outer
Continental Shelf oil and gas leases. The company said that the judgement
recognizes Mobil's right to terminate five Outer Continental Shelf leases, and
recover the purchase price. Mobil sued the federal government in 1992 for the
government's failure to allow development of certain oil and gas leases offshore
Alaska, Florida, and North Carolina. The Alaska and Florida parts of the
litigation were settled in 1995. (DJ) August 1 Russia annuls a $1
billion oil deal with Azerbaijan in support of Turkmenistan's protest that the
deal is illegal. On July 4 Russia's Rosneft and Lukoil signed a deal with
Azerbaijan's Socar to develop the Kyapaz field at the edge of Azerbaijan's zone
in the Caspian Sea. The Turkmen government protested claiming the field, which
Turkmenistan calls Serdar, as its own. (DJ) August 2 Shell Netherlands
B.V., a unit of Royal Dutch/Shell Group, unexpectedly shuts down part of
Europe's second largest oil refinery. A company spokesperson indicated that the
unit at Shell's Pernis refinery near Rotterdam could be closed all month, but
did not give a reason for the shutdown. (NYT) August 4 Mohammad Khatami, a
cleric viewed as moderate, is sworn in as Iran's new president. (DJ) August 4 In Colombia,
Occidental Petroleum, a California-based international oil company, and
Ecopetrol, Colombia's national oil company, declare force majeure on all oil exports from the Cano Limon
field. The declaration comes after a series of attacks dating back to July 30
knocked out a major oil pipeline transporting oil from the field to the
Caribbean port of Covenas. The pipeline has been attacked 45 times this year
which is equal to the total number of attacks for 1996. Responsibility for the
attacks has not been determined, but leftist guerrillas from the National
Liberation Army are usually blamed for such attacks. The force majeure declaration does not apply to the oil
contained in the 2 million barrel storage facility at Covenas. (DJ) August 4 United Nations
(U.N.) Secretary-General Kofi Annan approves a revised Iraqi aid distribution
plan under the U.N. oil-for-food program. The oil-for-food program allows Iraq
to sell approximately $2 billion of crude oil every six months. Sale periods are
divided into two 90-day intervals. The proceeds from the oil sales are paid into
a U.N.-run escrow account from which humanitarian supplies are purchased for the
Iraqi people. The program went into effect in December 1996 and was renewed for
another six months on June 8, 1997. However, since late May 1997, Iraq has
refused to sell any oil until the U.N. approved the revised aid distribution
plan which is designed to speed up the procedure for approving shipments of
humanitarian goods. The next step for Iraq is to gain U.N. approval of an oil
pricing formula, and then the U.N. must approve purchase contracts from buyers.
Following these two approvals, Iraq can resume its oil exports. Iraq has until
September 5, 1997 to sell $1.07 billion of oil under the current 90-day period.
(DJ) August 5 Mobil reveals that
production at Nigeria's 100,000 barrel per day Oso condensate field has been
completely shut-in since the previous week to repair faults in the gas
reinjection wells. Bolts securing one offshore injection wellhead sheared, and
as a precaution, Mobil decided to replace all the bolts securing offshore
injection wellheads. Officials expect delays to Oso condensate loadings, but
could not specify how many days' cargoes would be delayed. (DJ) August 6 Nigeria's
government releases $145 million to the state petroleum corporation to begin
repair work on its oil refineries. All four of the country's refineries were
either closed or had production severely reduced in May due to maintenance
problems. These problems have forced Nigeria to import oil to meet domestic
needs, despite its position as the world's sixth-largest producer of crude oil.
Repairs are expected to begin October 1 and take at least 60 days. (DJ) August 7 Romanian Prime
Minister Victor Ciorbea announces the closure of three of the country's nine oil
refineries. Petrotel, Vega, and Darmanesti will close immediately in order to
reduce a surplus of oil refining capacity and cut government spending. (DJ) August 7 Exxon Corporation
confirms that it has been chosen as sole foreign partner in a proposed
multi-billion-dollar project to expand oil refining and build a major
petrochemical plant in Fujian province, China. The joint project, involving
Exxon and Fujian Petrochemical, includes increasing oil refining capacity at
Xiaocuo from 80,000 barrels per day to 240,000 barrels per day and constructing
a 600,000-metric-ton-per-year ethylene plant. In addition, the plant will
include a 450,000-ton-per-year polyethylene plant and a 300,000-ton-per-year
polypropylene plant. Exxon has a 50 percent share in the joint venture. (DJ) August 7 Nova Corporation, a
Canadian natural gas services and petrochemicals company, officially opens the
GasAndes pipeline. The pipeline will initially transport 140 million cubic feet
per day of natural gas from Argentina to Chile. The volume will increase to 250
million cubic feet per day by fall 1998. The new pipeline will supply three new
gas-fired power plants in Chile that are set to open in October 1997, spring
1998 and fall 1998. The power plants are part of a program to improve the air
quality in the Chilean capital, Santiago, by switching from coal-fired to
natural gas-fired electrical generation. Nova holds a 56 percent interest in the
GasAndes project. (DJ) August 8 The United Nations
approves a sale-price formula for Iraqi crude oil sales under the oil-for-food
plan. The approval cleared the way for Iraq to resume limited oil exports
immediately through the Turkish port of Ceyhan on the Mediterranean Sea and
Iraq's Gulf port of Mina al-Bakr. The United Nations will also begin reviewing
contracts for Iraqi crude oil purchases. Iraq has until September 5 to raise the
$1.07 billion allowed under the existing 90 day oil-for-food plan window. Iraqi
officials state they will boost exports to 2 million barrels per day to meet the
sales target. However, industry experts say that Iraq's export capacity is
untested beyond 1.4 million barrel per day. (DJ) August 8 Shell Nigeria
announces that it expects to produce 7 percent to 8 percent less oil than had
been originally planned for 1997. Officials cite a reduction in hard currency
available to its joint venture partners as the reason for the decrease. A
cutback in production would reduce output by approximately 70,000 barrels per
day to 856,000 barrels per day. (DJ) August 11 Colombia's
national oil company, Ecopetrol, lifts the force
majeure declaration on all oil exports from the Cano Limon field. A company
spokesman states that crews completed repairs to the Cano Limon-Covenas pipeline
on Saturday August 9 and that normal operations have resumed. (DJ) August 12 A spokesman for
Saga Petroleum ASA announces that oil production from the Snorre oil field in
the Norwegian sector of the North Sea has been restarted and that it should
return to full production within a day. A restart date for the Vigdis field,
which was also shut down, has not been set. Production at the two fields was
stopped on August 11 following the discovery of a production fault. Snorre
produces 200,000 barrels per day while Vigdis has been gradually working towards
40,000 barrels per day following repairs to the gas compressor. (DJ) August 12 Exxon Corporation
shuts down a catalytic cracking unit at its refinery in Baytown, Texas because
of an unspecified operating problem. Exxon declined to say when the unit, which
produces more than 100,000 barrels per day of gasoline components, is expected
to return to service. (NYT) August 14 Stefan Balabanoff,
acting head of economics and finance in the OPEC research division, predicts
that OPEC's share of the world oil market will rise from a current level of
about 40 percent to 52 percent by 2020. Balabanoff estimates that OPEC's
production capacity must rise to 50 million barrels per day to meet the
increased demand. From 1995 to 2000 he sees oil demand increasing by an average
of 2.1 percent per year and from 2000 to 2010 demand is forecast to rise by 1.4
percent per year. Asian and Pacific countries are predicted to lead the
increases in demand. In addition, Balabanoff forecasts growth for non-OPEC
supply centered on the North Sea, non-OPEC developing countries, and the
Commonwealth of Independent States. (DJ) August 18 Three
international groups confirm that they plan to bid on Petroleos Mexicanos'
(Pemex) Cantarell project in the Yucatan peninsula. Pemex, the Mexican
state-owned oil monopoly is seeking to boost oil production by injecting
nitrogen into the terrain of Campeche state and into the sea floor beneath
Campeche Bay in the Gulf of Mexico. Dresser Industries Inc. of Dallas will
submit a joint bid with U.S. companies Marathon Oil and Praxair Inc., Nova Gas
International of Canada, and Bufete Industrial of Mexico. Shell Oil Company
entered a joint bid with Enron Corporation and Air Products and Chemicals Inc.,
both from the U.S., and Japan's Mitsui and Company. The third group is led by
BOC Group PLC of Britain. Industry officials estimate the price of the project
at $950 million. (WSJ) August 18 A spokesman for
Saga Petroleum ASA reports that production at the Vigdis oil field in the
Norwegian section of the North Sea was restarted despite the absence of a
replacement gas seal. A temporary measure of transferring gas from the field to
the Snorre field for processing enabled the company to restart Vigdis. The
replacement seal is in production and scheduled to be completed by August 25.
(DJ) August 20 The Iranian
parliament, the Majlis, confirms all 22 of President Mohammad Khatami's
nominations for his cabinet. The confirmations are seen as a strengthening of
Khatami's mandate to move towards a less strict society and a weakening of the
hard-liners' power base in parliament. One of the nominees has advocated direct
talks with the United States. Editor's note: The new
Iranian Oil Minister is Bijan Namdar Zaganeh. (DJ) August 20 Mexican President
Ernesto Zedillo inaugurates the first U.S.-originated natural gas delivery to
the Mexican state of Baja California. The new gas distribution system in
Mexicali, the state capital just across the United States border, is the first
under the Mexican government's natural gas privatization program. A binational
consortium comprised of Enova International, Pacific Enterprises International
and Proxima Gas, S.A. de C.V. will distribute the gas for the next 30 years. The
deal is valued at $20 million over the first three years for the supply more
than 10 billion cubic feet of gas. (DJ) August 20 The Saudi Arabian
Oil Company (Aramco) shut down its 300,000-barrel-per-day oil refinery on the
Persian Gulf for maintenance. Aramco expects the shutdown to continue until
September 17. Reports suggest that the shutdown will result in the release of
extra supplies of Arab Light and Extra Light crude oil for export in August and
September. (DJ) August 20 YPF SA, an
Argentine energy company, and Amoco Corporation sign an agreement to operate
U.S. natural gas fields with estimated reserves of 989 billion cubic feet of
gas. YPF reveals that the joint venture includes 2,000 productive wells in the
Texas Panhandle and western Oklahoma, two processing plants with combined daily
capacity of 230 million cubic feet of gas, a 932-mile distribution system and
889,560 acres of leased land for exploration. The companies have set up a 50-50
holding company called Crescendo Management LLC to operate the joint venture.
(DJ) August 21 The United Nations
approves the pricing formula for September crude oil exports under the United
Nations/Iraq oil-for-food sale. Shipments of Iraqi Kirkuk crude oil headed for
Europe will increase 20 cents per barrel, and shipments of Basrah Light crude
oil to the Far East and United States, as well as Kirkuk crude oil to the Unites
States, will increase 10 cents per barrel. (DJ) August 22 An analyst with
Calgary's First Energy Capital Corporation reports that western Canada's natural
gas production is declining for the first time in many years and that demand
could outstrip supply soon. In addition, the analyst estimates that natural gas
reserves in western Canada are declining between 17 percent and 18 percent per
year. Ontario Hydro's recent decision to close seven of nineteen nuclear power
plants could increase the demand for western Canadian natural gas thereby
exacerbating the potential shortage. (WSJ) August 26 Enterprise Oil
announces that it has received approval from the British government for a
development plan for the Pierce Field in the central North Sea. The company
expects the first oil from the field in August 1998 with an initial rate of
production of 20,000 barrels per day. Enterprise expects a continuous rate of
45,000 barrels per day shortly thereafter. In addition, Enterprise reveals that
it completed a deal with British Petroleum which increases its stake in the
Pierce Field to 75 percent. (DJ) August 26 China plans to
spend $600 million combining onshore and offshore exploration activities at its
biggest offshore oil field, Suizhong 36-1 in Bohai Bay. The Bohai Oil Company
will build facilities for oil and gas processing, storage, and marketing as well
as a new oil berth. Suizhong 36-1 covers 18.5 square miles and has proven oil
reserves of 2.1 billion barrels. (DJ) August 26 The leader of
Norway's oil workers union, Terje Nustad, said that the union plans to expand a
strike already affecting five oil rigs on the Norwegian continental shelf. The
expansion will start after September 10 and will include the West Epsilon rig,
the Transocean rig, and the Poly Saga rig. Approximately 340 oil workers went on
strike August 24 after rejecting a 7.8 percent raise offered by the Norwegian
Shipowners' Association. The strike has not slowed daily oil production because
the five affected rigs are mainly used for drilling new wells. However, if the
strike is expanded, the annual maintenance stoppage at Statfjord B in the North
Sea could be extended. Moreover, the restart of Norne field production,
scheduled for September, could be delayed. (DJ) August 27 Consulting firm
Arthur Anderson reports that world oil companies increased spending on U.S.
exploration and development to $21.6 billion in 1996, an increase of 24 percent
over 1995. Major oil companies spent $11.1 billion in the U.S., a 13 percent
increase, while independent companies spent $10.5 billion, a 37 percent
increase. Royal Dutch/Shell Group, Texaco Inc., and Amoco Corporation led the
major companies in 1996 U.S. exploration expenditures. Independent spending
leaders were Union Pacific Resources Group Inc., Burlington Resources Inc., and
Enron Oil & Gas Company. (WSJ) August 27 The United Nations
Security Council announces that it will discuss a possible rollover of Iraqi oil
sales from the current 90-day period to the second 90-day period under the
renewed oil-for-food program. The existing six month period of the oil-for-food
program began on June 8, 1997, but Iraq stalled on the oil sale until mid-August
1997. The delay makes it impossible for Iraq to sell $1.07 billion of oil during
the first 90-day period which is set to end on September 5, 1997. If the
rollover gains approval, it could prevent Iraq from losing an estimated $400
million in sales because of the late start. (DJ)
August 28 Russian officials
annul a high-profile deal with Exxon Corporation to develop huge oil deposits in
Russia's far north. Late last year Exxon's affiliate, Exxon Arkhangelsk, beat
out several international consortia for a 50 percent stake in oil fields in the
Timan-Pechora province. Russian officials cite five undisclosed violations
committed by Exxon during the tender process as the reason for scrapping the
agreement. Some analysts suggest that the cancellation of this $1.5 billion
investment project could shake investor confidence in Russia's energy sector and
may deter private investment in Russia. (DJ) August 29 A spokesman for
Enterprise Oil confirms that production at Enterprise's North Sea Nelson oil
field is to be halted at midnight while an unexploded World War II bomb is
removed from close to the Nelson pipeline. The work may take as many as five
days to complete; however, Enterprise hopes to restart production on September 1
Normal production from the field is 160,000 barrels per day. (DJ) August 29 Russia and Turkey
sign an agreement to build an underwater pipeline across the Black Sea to
transport Russian natural gas to Turkey. The proposed 225-mile pipeline would
run from the Russian port city of Tuapse to the Turkish port city of Samsun, and
initially carry 280 billion cubic feet of gas. The amount will reportedly double
by 2003. Construction of the pipeline is scheduled to start next year and is
expected to be complete by 2000. (DJ)
September 1 South Korea's
state-run Daehan Oil Pipeline Corporation (DOPCO) dedicates a 593-mile oil
pipeline and a large oil storage terminal in Songnam, 20 miles south of Seoul.
DOPCO has invested about $890 million over seven years to complete the two
projects. The storage terminal is capable of storing 1.97 million barrels of
petroleum products and loading 186,000 barrels of oil per day. The pipeline will
transport oil products from five domestic refineries including Yukong Ltd. and
Hyundai Oil Refining Company. (DJ) September 1 Saga Petroleum,
a Norwegian upstream oil company, reports that production stoppages at the North
Sea Vigdis Field, caused by gas compressor problems, have reduced this year's
output target from 25 million barrels to 16 million barrels. (DJ) September 1 Shell Nigeria
resumes operations at Nembe Creek flow stations following repairs of a pipeline
leak. Nembe Creek flow stations are a major trunk line feeding Nigeria's Bonny
terminal. Shell officials suspect that the line had been sabotaged to force
Shell to pay compensation to the local communities for other pipeline leaks.
Shell confirms that negotiations are under way with the local communities.
(DJ) September 3 Japanese and
Russian governors sign an oil and gas development agreement at a meeting on
economic cooperation between three Russian Far East regions and Japan's
northernmost prefecture. The agreement targets development of the Sakhalin
continental shelf and encourages private companies to participate in offshore
oil and gas drilling projects. Commercial production is expected as early as
1999. (DJ) September 3 After months of
negotiations, Chechnya and Russia reach a compromise on transporting Caspian Sea
oil across Chechnya. The last issue holding up the agreement was disagreement
over tariff rates for the use of the existing Chechen pipeline. (DJ) September 3 Workers from
Colombia's oil, banking, and judicial sectors launch a 24-hour strike to protest
government plans to privatize state-held assets. The oil workers are also
protesting the detention of 17 oil workers, on charges of bombing Colombia's oil
installations and talks between Ecopetrol and British Petroleum to renegotiate a
contract to develop the Piedemonte field. (DJ) September 5 Amoco
Corporation announces an agreement to merge its oil and natural gas business in
South America's southern region with Bridas Corporation of Argentina. The deal
will create what will be Argentina's second-largest oil and natural gas company
with more than $3 billion in assets. The new company is currently unnamed with
Amoco holding a 60 percent interest and Bridas the remaining 40 percent. The
venture will focus on exploration and production in Argentina, Bolivia, Brazil,
Paraguay, Chile, Peru, and Uruguay. (WSJ)
September 5 Mobil Oil Canada
and Chevron Canada Resources enter a strategic alliance for exploration and
development of 29 million acres in the Grand Banks area, offshore Newfoundland.
The companies indicate the alliance enables them to move more quickly on
proposed exploration and development plans. (DJ) September 8 YPF SA,
Argentina's largest energy company, confirms that its board approved a
previously announced agreement with Amoco Corporation to operate U.S. natural
gas fields with an estimated 989 billion cubic feet of gas reserves. The venture
will be called Crescendo Resources LP, with YPF holding an indirect 64 percent
interest and Amoco the remaining 36 percent. (DJ) September 8 China National
Oil Development Corporation, a unit of state-owned China National Petroleum
Corporation (CNPC), and Pan-China Resources Ltd., a unit of Canada's Ivanhoe
Capital Corporation, sign a production-sharing contract to develop oil reserves
in China's Hebei province. The two firms will develop the 34.9-square-mile
Kongnan block of the Dagang oil field, located 62 miles south of Tianjin. The
contract is CNPC's latest effort to stabilize production in China's eastern oil
fields. (DJ) September 10 Norway's
state-owned Statoil AS and United Kingdom's (U.K.) Enterprise Oil sign a deal to
develop and produce the Pierce oil field located in the U.K. sector of the North
Sea. According to Statoil, the deal is worth around $280 million and will last
for a minimum of 5 years. The Pierce field has recoverable reserves of 84
million barrels of oil. When it comes on stream in the fall of 1998, it is
expected to produce 45,000 barrels per day. (DJ) September 11 China completes
a natural gas pipeline from Shaanxi province to Beijing. The 534-mile pipeline
is the county's longest land pipeline. The project cost about $475 million and
will supply gas from the Changqing field in northwest China's Ordos Basin. The
pipeline is expected to supply Beijing with 10.6 billion cubic feet of gas in
1998 and eventually deliver 212 billion cubic feet of gas annually. (DJ) September 11 Israel's Prime
Minister Benjamin Netanyahu orders a freeze on a major natural gas deal with
Russia, which includes the construction of an underwater pipeline to transport
the gas from Turkey across the Mediterranean to the Israeli coast. Prime
Minister Netanyahu cites suspicions that Russia is helping Iran develop
ballistic missiles as the reason for the freeze. (DJ) September 11 Colombia's
President Ernesto Samper inaugurates a natural gas pipeline stretching from the
southwestern city of Cali to the city of Mariquita. The 211-mile pipeline cost
$312 million and has a maximum capacity of 200 million cubic feet of gas per
day. The line will transport gas to 3 million people in about 47 municipalities.
(DJ) September 12 The United
Nations Security Council passes a resolution that allows Iraq to reach the $2.14
billion oil sales limit under its oil-for-food program by December 5. The
current 6-month oil sales window, running from June 8 to December 5, will be
split into a 120-day segment and a 60-day segment instead of two 90-day
segments. During each segment Iraq can sell $1.07 billion worth of oil. The
resolution should enable Iraq to make up for lost revenues during a delay in the
start of oil sales during the first two months of the current six month sale
period. (DJ)
September 15 U.S.-based
Bechtel, Peru's Cosapi, and Brazil-based Odebrecht win a $2 billion contract for
the design and construction of a natural gas pipeline stretching from Peru's
Camisea gas fields to the capital city, Lima. The field is being developed by a
joint venture between Royal/Dutch Shell and Mobil Corporation. (DJ) September 16 Amoco
Exploration Company announces a major North Sea drilling program designed to
increase reserves and production from its central and northern United Kingdom
(U.K.) oil and natural gas fields. The cost of the program is expected to exceed
$160 million and extend over a three-to-five year period. The program will
initially concentrate on additional development drilling in Amoco's Arbroath
field and then continue on to other fields in the central and northern U.K.
sector. The program will also utilize new drilling rigs built to operate in
harsh conditions. (DJ) September 17 One day after
sending money to Chechnya for repairs to a war-torn pipeline, a Russian
commission announces a decision to construct a new pipeline that would bypass
Chechnya. The new 176-mile pipeline will run along the Chechen border in the
Dagestan republic to the Stavropol region, and then on to Russia's oil terminal
at the Black Sea port of Novorossiysk. First Deputy Prime Minister Boris Nemtsov
estimates the cost of the project at $220 million. (DJ) September 22 Texaco Inc.
confirms that is has agreed to sell all of its assets in Burma to the United
Kingdom based Premier Oil PLC for $260 million. Texaco holds a 42.9 percent
interest in the Yetagun natural gas field and a 50 percent interest in Block
M-10, a nearby exploration area. Premier will reportedly sell most of the
interests to Petronas, Malaysia's state-owned oil and gas company. (DJ) September 23 Greenpeace
begins legal proceedings against the United Kingdom Department of Trade &
Industry in an attempt to block oil and gas exploration west of the Shetland
Islands and Scotland in the Atlantic Frontier. Greenpeace is asking for a full
judicial review of operating licenses awarded in April's 17th Offshore Licensing
Round. The environmental group contends that the European Habitats Directive
requires special consideration be given to reef habitats before licenses are
granted. If Greenpeace is successful, a full judicial hearing could be held in
November. (DJ) September 24 A four-week-old
Norwegian oil strike intensifies as the Norwegian Shipowners' Association
threatens to lock out oil workers from 13 floating oil rigs beginning on October
8. The strike began on August 24 and has mainly affected exploration drilling
rather production. However, on September 22 the strike forced the closure of the
35,000-barrel-per-day North Sea Yme field. The oil workers union called the
strike after rejecting a 7.8 percent pay increase offered by the Shipowners'
Association. (DJ) September 25 Dominique
Simondon, chief of conceptional engineering for Elf Aquitaine on the Girassol
project, reveals that reserve estimates for Elf's Angolan block 17 oil
discoveries have been increased to 3 to 4 billion barrels. Initial reserve
estimates of 1 to 3 billion barrels had already made it one of the largest finds
offshore west Africa. The Girassol field is due to begin producing oil in the
second half of 2000 and is expected to have a production capacity of 200,000
barrels per day. (DJ)
September 25 Russia's State
Property Committee approves a privatization plan for AO Rosneft. The approval
clears the way for the sale of the Russian government's last major holding in
the oil industry. The sale will take place during the fourth quarter of 1997 and
the first half of 1998 and will be open to foreign and domestic investors.
(DJ) September 26 Kazakstan and
China sign a $4.3 billion deal to explore the Aktyubinsk oil fields in western
Kazakstan. The deal comes two days after the China National Petroleum
Corporation and the Kazak Ministry of Energy and Natural Resources signed a
contract for joint exploration of the Uzen oil field, which includes the
construction of a $3.5 billion, 1,863-mile pipeline from western Kazakstan to
China. Work on the pipeline is expected to begin in 1998 and be completed by
2005. (DJ) September 29 France's Total
SA confirms that it reached a $2 billion agreement with the National Iranian Oil
Company (NIOC) to develop part of the South Pars natural gas field. Other
companies that are part of the deal include Russia's Gazprom and Malaysia's
Petronas. The South Pars gas field has estimated reserves of 300 trillion cubic
feet and is located in the Persian Gulf adjacent to Qatar's North Dome natural
gas field. Under the terms of the agreement, Total and its partners will be
responsible for the initial development and production of the field until 2002.
At the completion of this work, NIOC will take over as production operator. In a
related story, the French government warns the United States not to apply the
"D'Amato law" to the agreement. The law allows the President of the United
States to impose sanctions on foreign companies investing more than $40 million
per year in Libya or Iran. (DJ) September 30 Brazil's
Petrobras begins oil production in two major fields in the Campos Basin. The
Barracuda and Caratinga fields together contain reserves of one billion barrels
of oil equivalent and 530 billion cubic feet of natural gas. The fields are
located 50 miles off the coast of Rio de Janeiro. (DJ)
October 1 Russian oil
company AO Sidanko's petition to settle a lengthy legal battle with the Russian
government and state-owned AO Rosneft for control of the Siberian oil production
company AO Purneftegaz is accepted by the Supreme Arbitration Court. The end of
the lawsuit clears the final hurdle for the privatization of AO Rosneft. (DJ) October 1 South Korea's
state-owned Korea Petroleum Development Corporation (Pedco) agrees to
participate in a consortium to develop Venezuela's Onado oil field. Pedco will
hold a 12 percent interest in the development project with the remaining 88
percent split among CGC of Argentina, Carmanah Resources Limited of Canada, and
Distral of Venezuela. The Onado field contains 162 million barrels of oil and is
expected to produce 52,000 barrels per day beginning in January 1998. (DJ) October 2 In a joint
statement, Norway's Saga Petroleum and state-owned Statoil announce a deal to
jointly develop the Haltenbanken South oil and gas area in the Norwegian Sea.
The deal combines Haltenbanken's four fields, Kristin, Lavrans, Tyrihans, and
Trestakk, into one unit and should speed up the development of the area.
Combined reserves are estimated at around 7 trillion cubic feet of natural gas
and 630 million barrels of crude oil and condensate. Production is expected to
start in 2001. (DJ) October 2 The Venezuelan
Congress approves a proposed $2.5 billion joint venture between Lagoven, a unit
of state-owned Petroleos de Venezuela, U.S.-based Mobil, and Germany-based Veba
Oel AG to extract and upgrade extra heavy crude oil from the Cerro Negro zone of
the Orinoco belt. The project is projected to last 35 years with peak production
of 120,000 barrels per day reached by 2001. (DJ) October 5 Japan Gasoline
Corporation (JGC) announces that it has won a contract to design, build, and
equip an oil refinery in Pakistan. JGC estimates the total cost of the project
to be around $600 million. The refinery will include a crude oil distillation
unit and a hydrocracker and will have a processing capacity of 100,000 barrels
of crude oil per day, making it Pakistan's largest refinery. It is designed to
help meet Pakistan's domestic demand for oil products and is expected to be
complete by the end of 2000. (DJ) October 6 Japan's Itochu
Corporation and Japan Gasoline Corporation secure an oil refinery construction
contract from the Georgian government. The contract is estimated to be worth
between $200 and $300 million, with construction beginning in 1998 and start-up
scheduled for 2001. The refinery will be built in Supsa on the Black Sea and
will process 60,000 barrels of crude oil per day. It will supply gasoline, gas
oil, and heavy fuel oil for domestic consumption in Georgia and export to
Ukraine, Turkey, and other neighboring countries. (DJ) October 6 The Malaysian
government confirms that it has approved a proposal submitted by Japan's Chiyoda
Corporation to build a 118-mile crude oil pipeline across the Malay peninsula.
The $2 billion pipeline will have the capacity to carry 2 million barrels per
day from the Malaysian town of Alor Setar to the Thai port of Sai Buri. Thailand
still needs to approve the project before it can go forward, but, Chiyoda is
expecting that to occur soon. (DJ) October 6 The U.S.
Department of Energy announces that it will sell its 78 percent share of the Elk
Hills Naval Petroleum Reserve in California to Occidental Petroleum for $3.6
billion. Currently, Elk Hills produces 60,000 barrels per day of oil, down from
a high of 150,000 barrels per day in 1981. The U.S. Congress and the U.S.
Department of Justice have 31 days and 60 days, respectively, to review the
sale. (DJ) October 8 The United
Nation's Iraq Sanctions Committee votes to provide funds to Turkey to purchase
spare parts for the Kirkuk-to-Yumurtalik pipeline that carries Iraqi crude oil
to the Turkish port of Ceyhan. The Committee said that the funds are for
medium-term maintenance of the pipeline which is to carry at least half of
Iraq's oil exports under the current six-month phase of the oil-for-food
program. (DJ) October 9 Turkey's
state-owned oil company, Turkiye Petrolleri AO (TPOA), signs a $750 million deal
with Kazakhstan to develop oil reserves in the northwestern Aktyubinsk region
near the Caspian Sea. The contract is expected to last at least 29 years, and
Kazakhstan could earn $1.8 billion in revenues. TPOA and Amoco will set up a
50-50 joint venture to finance and implement the project. The first four years
of the contract are set aside for exploration and the following 25 years for
production. Turkish officials estimate that the region contains about 327
million barrels of oil. (WSJ) October 9 Norway's
state-owned oil company, Statoil AS, reports that so far about 60 million
barrels of recoverable oil have been found in eight exploration wells drilled
this year. In the North Sea, new discoveries were made in the Beta West
structure on the Yme field, in the Glitne oil field north of the Sleipner area,
and in the Statfjord field. By the end of the year, Statoil will drill four more
exploration wells. Its greatest expectations are for the first deep water well
on the Vena Dome in the Voering plateau in the Norwegian Sea. (DJ) October 11 Pilipinas Shell
Petroleum Corporation, a unit of Royal Dutch/Shell, and Occidental Philippines
Incorporated, a unit of Occidental Petroleum Corporation of the U.S., announce a
$5 billion joint venture to distribute natural gas from the Malampaya/Camago
natural gas field off the western Philippine island of Pauline. The Philippines
has depended heavily on imported coal and oil for its energy needs and has begun
to develop its domestic energy resources to reduce this dependence. The Filipino
government will retain 60 percent of the revenues generated by the project which
should translate into an estimated $8 billion. The remaining 40 percent goes to
the Shell/Occidental partnership. Shell and Occidental stand to earn $500
million per year in revenues with investments fully recovered in seven to eight
years. (DJ)
October 11 Nine days after
signing a $2 billion contract with the National Iranian Oil Company, France's
Total SA begins Phases Two and Three of the development plan for Iran's South
Pars natural gas field. The field contains an estimated 280 trillion cubic feet
of natural gas and 7.5 billion barrels of natural gas liquids. Phases Two and
Three are designed to produce two billion cubic feet of natural gas per day over
30 years. The deal has the support of the European Union, but has drawn harsh
criticism from the Unites States. (DJ) October 11 Egypt and Libya
announce a $1 billion project that includes the construction of a 386-mile oil
pipeline between the two countries. The line will transport up to 150,000
barrels of oil per day, carrying Libyan crude oil from the border town of Tobruk
to Egyptian refineries. (DJ) October 13 The Gulf
Cooperation Council (GCC), whose membership includes Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia, and United Arab Emirates, opens a two-day conference with
the European Union in Manama, Bahrain, focusing on advanced oil and gas
technologies. Fayez al-Sadah, general manager of Bahrain National Oil Company,
opened the conference by stating that world crude oil demand is expected to rise
from today's level of 72 million barrels per day to 96 million barrels per day
by 2010 and that the GCC states are ready to meet any increases in world oil
demand. (DJ) October 14 Shell U.K.
Exploration and Production reports that production has started on the Central
North Sea Kingfisher condensate field, four weeks ahead of schedule and
significantly under budget. The field's reserves are estimated at 56 million
barrels of crude oil and condensate and 368 billion cubic feet of gas.
Kingfisher is located about 155 miles northeast of Aberdeen. A second production
well should be flowing by the end of 1997 and four more wells are expected on
line by early 1999. (DJ) October 14 At a joint news
conference, officials from Turkmenistan and Iran announce an agreement to set up
a joint consortium to develop offshore oil and gas fields located on their joint
border in the Caspian Sea. The two countries also agreed to further efforts
toward determining the legal status of the Caspian region in order to provide
more guarantees to international companies interested in long-term work in the
Caspian. (DJ) October 20 Two of Mexico's
main Gulf Coast crude oil export ports reopen after being closed for five days
due to poor weather conditions. The port of Pajaritos usually exports around
400,000 barrels of oil per day and the port of Dos Bocas exports around 300,000
barrels per day. These two ports, along with the port of Cayo Arcas, handle the
vast majority of exports from state-owned Petroleos Mexicanos. (DJ) October 20 The Maritime and
Port Authority of Singapore confirms that a 166,500-barrel oil spill from a
collision of two oil tankers has been contained in a region southwest of
Singapore. On October 15, an empty, very large crude carrier and an oil tanker
collided in the Singapore Strait. The oil tanker was carrying about 800,000
barrels of marine fuel oil before the collision. Neither ship was in danger of
sinking and clean-up operations began immediately. However, clean-up efforts
have been hampered by thick haze from forest fires in nearby Indonesia. The
individuals in charge of the two vessels have been charged with reckless
navigation. The spill has been described as Singapore's worst. (DJ) October 21 The U.S.
Department of Energy announces a new method of producing electricity from
gasoline that yields twice as much useful energy as today's car engines with 90
percent less pollution. This marks a significant step toward developing an
electric car without having to frequently recharge heavy batteries. The new fuel
cell makes an electric current by combining hydrogen and oxygen into water.
Energy Secretary Federico Pena said that cars using this new technology could be
on the road by 2010. (NYT) October 21 Thailand's
Songkla Petroleum & Chemical Limited signs a $2.2 billion contract with a
German joint venture company, Kruppe Uhde GmbH & Thyssen Rheinstahl Technik
GmbH, to design and build a crude oil refinery, a petrochemical complex, and a
150-megawatt power plant. The project is part of Thailand's Southern Seaboard
Development program and will be constructed in Songkla province in southern
Thailand. The oil refinery will have a capacity of at least 125,000 barrels per
day. (DJ) October 21 Qatar General
Petroleum Corporation announces that it will move forward with its plans to
build a gas pipeline from its North Dome natural gas field to Jebel Ali in the
United Arab Emirates. The proposed pipeline will have a capacity of 800 million
cubic feet per day and is scheduled to be completed in three years. The project
is being developed by a five-member consortium led by Atlantic Richfield of the
U.S. (DJ) October 22 Kazakhstan's
Ambassador to Rome, Olxas Suleimenov, announces that Italy's Ente Nazionale
Idrocarburi (ENI), Texaco, BG PLC, and Kazak Gas will invest $9 billion over 40
years to develop Kazakhstan's giant Karachaganak oil and gas field. ENI and BG
will each hold a 32 percent stake in the field, Texaco 20 percent and Kazak Gas
16 percent. The Karachaganak field contains reserves of 17.66 trillion cubic
feet of gas and 2.2 billion barrels of crude oil and condensates. (DJ) October 23 Oilwatch Alaska,
an oil industry watchdog group, is calling for an antitrust investigation of the
companies that control the Trans-Alaska oil pipeline. The group charges that
high shipping charges are strangling competition for development of the North
Slope oil fields. Oilwatch also accuses the companies of overcharging for oil
shipments through the pipeline, which allegedly cuts into profits and costs the
state of Alaska billions of dollars in royalties and taxes. The 800-mile
pipeline carries 20 percent of US domestic oil production. The companies that
control the pipeline include: British Petroleum 50 percent, Arco 22 percent,
Exxon 20 percent, and Mobil 3.2 percent. Amerada Hess, Philips Petroleum, and
Unocal each own less than 2 percent. (DJ) October 23 The Afghanistan
Taliban Islamic movement and Turkmenistan have reached an agreement on setting
up a tripartite commission to build a natural gas pipeline from Turkmenistan to
Pakistan via Afghanistan. Officials from Turkmenistan and Pakistan signed an
agreement in July 1997 to build the pipeline which will carry up to 706 billion
cubic feet per year of Turkmen gas. (DJ) October 23 In response to
Iraq's recent refusal to comply with United Nations (U.N.) arms inspections, the
U.N. Security Council approves a resolution condemning Iraq's actions. Although
the measure does not add new sanctions on Iraq, it expresses the Council's
intentions of adopting travel restrictions on Iraqi military and intelligence
officials if Iraq continues to inhibit U.N. arms inspections. The resolution
passed by a 10-0 vote with five abstentions. (DJ)
October 25 The State Oil
Company of Azerbaijan opens an oil pipeline stretching northwest from Baku on
the Caspian Sea, through a 93-mile segment in Chechnya, and on to the Russian
port of Novorossiysk on the Black Sea. The ceremony marks the first time
Azerbaijan has exported its own oil to Western markets in 65 years. (WP) October 27 Unocal
Corporation organizes a multinational consortium to build a natural gas pipeline
from Turkmenistan to Pakistan, and possibly India, via Afghanistan. The CentGas
pipeline will cost about $2 billion and will transport two billion cubic feet of
gas per day 790 miles from the Turkmen border to Multan, Pakistan. The pipeline
is expected to take two years to complete. The consortium has also proposed a
$600 million, 400-mile extension to New Delhi. Unocal will act as project
leader, retaining a 46.5 percent interest in the project. The rest of the
consortium consists of Saudi Arabia's Delta Oil (15 percent), the Turkmen
government (7 percent), Japan's Itochu Oil Exploration (6.5 percent), Indonesia
Petroleum (6.5 percent), Korea's Hyundai Engineering & Construction (5
percent), and Pakistan's Crescent Group (3.5 percent). A 10 percent share has
been reserved for Russia's Gazprom, which is expected to sign onto the project
soon. (WSJ) October 27 The Tehran Times newspaper reports that Russia and Iran
have signed a memorandum of understanding for Russia to build an oil refinery
and a petrochemical complex in the Chahbahar free trade and industrial zone in
southeast Iran. (DJ) October 27 Under pressure
from the U.S. Congress, the U.S. Export-Import Bank is expected to suspend $186
million in loan guarantees to 21 oil service companies, that were expecting to
sell oil well drilling and measuring equipment to Russia's Gazprom over the next
year. The U.S. Congress is calling for the suspension of the loans because of
Gazprom's ties to Iran. Gazprom recently signed onto a $2 billion contract to
develop Iran's South Pars natural gas field, a deal that may violate the Iran
and Libya Sanctions Act. The Export-Import Bank is due to vote on the loan
guarantees by the end of 1997. (DJ) October 28 The U.S. Senate
passes the $13.8 billion Interior Appropriates bill that includes a provision
directing the Department of Energy to sell $207.5 million of oil from the
Strategic Petroleum Reserve. Revenues from the sale will pay for the Reserve's
operations over the next year. The bill also extends for another year the
current moratorium on offshore oil and gas drilling in parts of the Gulf of
Mexico and Alaska. The U.S. House of Representatives has already passed its
version of the bill and President Clinton is expected to sign it. (DJ) October 29 A consortium of
South Korean, British, and Italian firms has discovered an oil field in Libya
with estimated recoverable reserves of one billion barrels. The field is located
466 miles south of Tripoli on the Murzuk NC-174 block. A contract to explore the
field was signed in 1990 by the consortium and Libya's National Oil Company
Under the terms of the agreement, the Libyan company will retain 75 percent of
the oil produced and the rest will be equally split among the consortium's
members. (DJ) October 29 Iraq's Revolution
Command Council, the country's main decision making body, announces that it will
no longer allow U.S. citizens and U.S. aircraft to serve with the United Nations
(U.N.) arms inspection teams. The council's statement gives U.S. citizens
working with the inspection teams one week to leave Iraq. Iraq has also asked
the U.N. to stop flights by American reconnaissance aircraft monitoring its
compliance with U.N. resolutions requiring the elimination of weapons of mass
destruction. In response to this statement, the U.N. Security Council
unanimously approves a statement condemning Iraq's threats to expel the
Americans. (DJ) October 31 Chevron
Corporation announces that its Kuito Field (formally known as Block 14) off the
coast of Angola, may contain at least one billion barrels of oil. This estimate
makes the field one of Chevron's largest finds in several decades. Production is
expected to begin by early 1999. Chevron holds a 31 percent interest in the
field followed by France's Total, Italy's Agip, and the Angolan government each
with 20 percent share, and by Portugal's Petrogal with about a 9 percent share.
(WSJ)
November 3 An official from
Russian oil drilling company Zarubezhneft denies an Iraqi news report that it
will begin developing Iraq's 600,000-barrel-per-day West Qurna oil field.
Zarubezhneft is part of a consortium led by Russia's Lukoil that signed a
23-year production sharing agreement with Iraq, valued at $3.8 billion, to
develop the field. Zarubezhneft's Deputy General Director Yuri Agababov
indicates that there have been negotiations but reiterates that work in Iraq
will not start until United Nations sanctions are lifted. (DJ) November 3 Dutch and Belgian
oil worker unions call for a boycott of Nigerian crude oil as part of a campaign
to secure the release of jailed Nigerian oil union leaders Milton Dabibi and
Frank Korkori. (DJ) November 4 The U.S.
Department of the Interior rejects a petition from environmental groups seeking
to halt crude oil and natural gas drilling in the Beaufort Sea off the coast of
Alaska's Arctic National Wildlife Refuge. The petition expressed concern for
potential damage to the ecosystem of the refuge from pollution and possible oil
spills. However, the Interior Department states that Atlantic Richfield
Company's plan for exploration in the Beaufort Sea has adequate safeguards to
protect the area. (DJ) November 4 Turkmenistan
withdraws three of eleven blocks from the first round of an offshore oil and gas
tender opened on September 1, 1997. The three blocks, Lachin, Burgut, and
Yelbars, lie on the Turkmen-Iranian Caspian Sea border-zone, calling ownership
into question. The three blocks contain estimated reserves of 17.1 trillion
cubic feet of natural gas and 5.4 billion barrels of oil. (DJ) November 5 Texaco North Sea
U.K. Limited announces that natural gas and condensate production has begun in
its United Kingdom North Sea Erskine field. This follows a November 3, 1997
announcement that first production had been delayed again from the original
start-up date of October 14, 1997 due to final testing on a pipeline that will
carry gas and condensate to a London platform operated by Amoco Exploration
Company. Peak production is expected to reach 120 million cubic feet of gas per
day and 29,600 barrels per day of condensate by October 1998. Estimated
recoverable reserves total more than 330 billion cubic feet of natural gas and
over 75 million barrels of condensate. (DJ) November 5 Turkmenistan
resumes natural gas shipments to Ukraine following the signing of a new
agreement on paying for the fuel. Under the agreement, Turkmenistan will supply
99 billion cubic feet of gas through the end of 1997 and 706 billion cubic feet
in 1998. Ukraine is required to pay for at least half of the shipments in cash
and the remainder through barter and other mechanisms. Turkmenistan cut off gas
shipments to Ukraine in April 1997 to force repayment of a $300 million debt
from previous gas shipments. (DJ) November 7 Mexico's
state-owned Petroleos Mexicanos announces that it will spend $3.5 billion over
the next three years to build coker units at three oil refineries in Salina
Cruz, Ciudad Madero, and Minatitlan. The project will begin in 1998 and enable
the refineries to produce more high quality products, such as diesel fuel and
gasoline, from heavy Mexican crude oil. The upgrade is designed to meet rising
domestic demand for oil, but should also permit increased exports. (DJ) November 8 Azerbaijan's
parliament ratifies an exploration agreement signed between Azerbaijan's state
oil company and Mobil Corporation on August 1, 1997. The $2 billion deal is for
the exploration of the Oguz oil field located about 50 miles southeast of the
Apsheron Peninsula in the Caspian Sea. Each company holds a 50 percent stake in
the project, and reserves are estimated at 733 million barrels of oil. (DJ) November 11 Russian
President Boris Yeltsin and Chinese President Jiang Zemin sign an agreement to
build a $12 billion pipeline to carry natural gas from eastern Siberia to China
and then on to Japan and South Korea. The pipeline is expected to bring 353
billion cubic feet of gas to China and make available an additional 353 billion
cubic feet to Japan and South Korea over a 30-year period. South Korea and Japan
have yet to sign off on the deal, but the two countries are expected to provide
equipment and financing. (WSJ) November 11 Russian gas
company Gazprom postpones a bond offering to raise up to $3 billion for a
natural gas exploration project in Iran. Gazprom cites uncertain market
conditions as the reason for the delay. The lead underwriter for Gazprom is
Goldman, Sachs, an American investment bank, which may be in violation of the
1996 Iran-Libya Sanctions Act for its role in the bond offering. Gazprom and its
partners, France's Total and Malaysian oil company Petronas, signed a $2 billion
contract last month with Iran to begin exploration of Iran's South Pars gas
field. (NYT) November 12 BG Exploration
and Production and its partners Royal Dutch/Shell Group and Edison International
sign a natural gas sales agreement with Egyptian General Petroleum Company to
supply gas from the Rosetta Concession, offshore Egypt's Nile Delta. Gas
deliveries will begin in January 2000 and reach a maximum of 250 million cubic
feet of gas per day. The agreement is scheduled to last for a minimum of 20
years. (DJ) November 12 The United
Nations (U.N.) Security Council unanimously approves a resolution to condemn
Iraq for its decision to expel Americans from U.N. weapons inspection teams. The
Council's measure imposes a travel ban on Iraqi officials who obstruct the
inspection teams and expresses the firm intention to take further unspecified
measures if Iraq continues to defy the U.N. (DJ) November 13 Australian crude
oil and natural gas producer, Santos Limited, reports that it has made one of
the largest natural gas discoveries in Australia at its Barrolka field in
southwest Queensland state. Barrolka's reserves are estimated at 575 billion
cubic feet. Santos holds a 58.86 percent interest in the field. (DJ) November 14 Coastal
Corporation signs a memorandum of understanding with Maraven, a unit of
Venezuela's state-owned Petroleos de Venezuela, for a 35-year joint venture to
produce, refine, and market extra heavy crude oil from the Zuata region of
Venezuela's Orinoco Belt. The crude oil will be transported via pipeline to the
Jose upgrading complex near Puerto La Cruz and then on to Coastal's
100,000-barrel-per-day refinery in Corpus Christi, Texas. The agreement calls
for the joint venture to purchase the Corpus Christi refinery and install a new
delayed coking unit and an additional hydrotreatment unit. The deal is still
subject to final approval by the Venezuelan Congress and by Coastal's board.
(DJ) November 17 Royal
Dutch/Shell announces that it will invest $1 billion in a joint venture with
Russia's Gazprom to produce crude oil, natural gas liquids, and natural gas in
Russia and elsewhere. Shell and Gazprom will share equal ownership in the
partnership. In a separate memorandum of understanding, Shell, Gazprom, and
Russian oil company, Lukoil, announce that they will submit a joint bid for a
stake in Russian oil company, Rosneft, when it becomes available for
privatization in the near future. (NYT) November 18 Mobil Oil Qatar,
a unit of Mobil Corporation, signs a memorandum of understanding with
state-owned Qatar General Petroleum Corporation to evaluate development of
Qatar's North Field. The giant field contains estimated reserves of more than
380 trillion cubic feet of natural gas and is thought to be the world's largest
nonassociated natural gas field. Mobil says the project will eventually deliver
one billion cubic feet of natural gas per day, primarily to the Qatari domestic
market, more than 30,000 barrels per day of condensate, and more than 15,000
barrels per day of propane and butane. (WSJ) November 18 Kazakhstan signs
an agreement with a consortium that includes US-based Texaco, British Gas,
Italy's Agip, and Russia's Lukoil to develop the Karachaganak crude oil and
natural gas field in northwestern Kazakhstan. The field's reserves are estimated
at more than 2 billion barrels of crude oil and condensate and about 20 trillion
cubic feet of natural gas. The consortium will develop the field for the next 40
years, with Agip and British Gas each holding a 32.5 percent interest in the
field, Texaco 20 percent and Lukoil 15 percent. (DJ) November 18 Kazakhstan signs
an agreement with a consortium that includes Mobil Corporation, British
Petroleum, Royal Dutch/Shell, Norway's Statoil, France's Total, British Gas, and
Italy's Agip to explore an offshore area in the North Caspian Sea known as
Kazakhstancaspishelf. The agreement allows the consortium to split production
from 12 blocks selected by the consortium and also calls for additional seismic
data. Drilling is expected to start in 1998. (DJ) November 18 Nizar Hamdoon,
Iraq's United Nations (U.N.) representative, announces that Iraq will not
continue the U.N.-sponsored oil-for-food sale unless the U.N. agrees to a
specific date for lifting economic sanctions. Hamdoon indicates that Iraq will
continue to participate in the current six-month phase of the oil-for-food sale,
which runs through December 4, 1997. (DJ) November 20 Iraq's
Revolution Command Council formally endorses an agreement, arranged by Russia,
that enables United Nation's (U.N.) weapons inspection teams to resume
operations in Iraq. The deal ends a three-week standoff between the U.N. and
Iraq that began in late October 1997 after Iraq announced it would no longer
allow U.S. citizens to serve on U.N. weapons' inspection teams. (DJ) November 20 Egypt and Libya
sign an agreement to link the two countries' natural gas networks by
constructing a pipeline between Tobruq, Libya and Alexandria, Egypt. The two
countries also have agreed to form a joint company to manufacture pipelines and
integrate their petrochemical industries. (DJ) November 21 Turkey's
state-run petroleum company Turkiye Petrolleri Anonim Ortakligi will team with
Amoco Corporation to explore and develop the Alibegamolla oil fields in
Kazakhstan. The two companies plan to invest $850 million in the oil fields,
located in the Temir region. (DJ) November 24 Exxon Services
Venezuela, a unit of Exxon Corporation, agrees to form a joint venture with
Corpoven, a unit of Venezuela's state-owned oil company Petroleos de Venezuela.
The joint venture will develop extra heavy crude oil from the Hamaca area of the
Orinoco belt. Although the project still requires the approval of Venezuela's
Congress, Exxon indicates that its initial investment will be $800 million, and
Corpoven foresees the companies investing $4.9 billion over 35 years. Exxon will
hold a 70 percent interest in the venture and Corpoven the remaining 30 percent.
(WSJ) November 25 Canada's AEC
Pipelines initiates an expansion of its Alberta Oil Sands Pipeline to
accommodate extra output from the Syncrude Canada plant. The initial phase of
the project involves a 30-inch looping of the existing 22-inch system and will
increase pipeline capacity to 300,000 barrels per day. This phase is estimated
to cost about $155 million and is expected to be completed as early as 1999. AEC
also reports that when the pipeline expansion is fully complete, the system will
carry up to 950,000 barrels of crude oil per day from Ft. McMurray to Edmonton.
(DJ) November 25 U.S. oil company
Chevron Corporation and representatives from Australia's Aborigines finalize a
land access agreement for a proposed $2 billion, 1,553-mile natural gas pipeline
between Papua New Guinea and Australia's Queensland state. The agreement is a
significant step toward final approval of the project, that is scheduled for
October 1998. (DJ) November 26 Mexico's
state-owned oil company Petroleos Mexicanos signs a $2.46 billion contract with
a consortium consisting of South Korea's Sunkyong Engineering and Construction,
Germany's Siemens, and Mexico's Tribasa to expand and modernize an oil refinery
in northeastern Mexico. The project involves the construction of nine new units,
the expansion and updating of ten existing units, and the construction of 754
miles of oil pipeline. Construction is expected to be complete within three
years. (DJ) November 28 United Nations
Secretary-General Kofi Annan decides not to give a recommendation on the amount
of oil Iraq can sell in the next six month phase of the oil-for-food program.
The current six month phase ends December 4, 1997. Annan will suggest
improvements to the program, but will not specify a recommended amount of oil
that Iraq will be allowed to export. Currently, Iraq is allowed to export $1.07
billion worth of oil every 90 days for two consecutive 90-day periods. (WP)
November 29 For the first
time in four years, the Organization of Petroleum Exporting Countries (OPEC)
agrees to an increase in its production ceiling. OPEC has raised the ceiling to
27.5 million barrels per day for the first half of 1998, effective January 1,
1998. The new ceiling represents a 10 percent increase over the current ceiling.
The new quotas are as follows: Saudi Arabia 8.76 million barrels per day
(bbl/d), Iran 3.942 million bbl/d, Iraq 1.314 million bbl/d, Venezuela 2.583
million bbl/d, Nigeria 2.042 million bbl/d, Indonesia 1.456 million bbl/d,
Kuwait 2.19 million bbl/d, Libya 1.522 million bbl/d, United Arab Emirates 2.366
million bbl/d, Algeria 0.909 million bbl/d, and Qatar 0.414 million bbl/d.
(NYT)
December 2 Royal Dutch/Shell
has been offered a lead role in building a natural gas pipeline from
Turkmenistan to Turkey, according to Alan Parsley of Shell Exploration &
Production. The 1,242-mile pipeline, running from Turkmenistan through Iran and
into Turkey and European markets, will be designed to carry between 989 billion
cubic feet and 1.06 trillion cubic feet of gas annually. (DJ) December 4 Canada's National
Energy Board approves construction of eastern Canada's first offshore natural
gas project and a pipeline to carry the gas to markets in eastern Canada and the
U.S. Northeast. The combined cost for the two projects is estimated at $2.1
billion. The Board's approval removes some of the uncertainties surrounding the
Sable Offshore Energy Project, which is scheduled to start producing 460 million
cubic feet of natural gas per day from offshore Nova Scotia in late 1999.
(WSJ) December 4 Iraq's United
Nations (U.N.) Ambassador Nizar Hamdoon warns that Iraq will not allow oil to
flow during a third six-month phase of the U.N.'s oil-for-food sale until the
U.N. approves an aid distribution plan. Despite the warning, the U.N. Security
Council approves a third six-month phase following the end of the second
six-month phase. Like the first two phases, the third phase allows Iraq to sell
up to $1.07 billion of oil in each of two 90-day periods. However, the sales
level may be increased by the Security Council in January 1998 after U.N.
Secretary-General Kofi Annan reports on Iraq's needs. (WP) December 5 Iraq stops
pumping oil into the Iraqi-Turkish pipeline at the end of the second six-month
phase of the United Nations (U.N.) oil-for-food program in spite of U.N.
approval of a third six-month phase. (NYT) (DJ) December 7 Japan's Isuzu
Motors Inc. announces that it will begin producing trucks that run on condensed
natural gas in August 1998. Isuzu plans to manufacture gas-powered trucks with a
two ton load capacity. The company expects to produce 150 trucks in the first
year of production, and another 300 trucks in the following year. Isuzu also
expects demand to increase to more than 500 per year in 2000. (DJ) December 8 As a result of
construction delays, Malaysian Refinery Company (MRC) has delayed the start of
operations at its 100,000-barrel-per-day oil refinery in Malacca from January
1998 to late March 1998. MRC is a joint venture between Petronas, Malaysia's
state oil company, Conoco of the United States, and Norwegian state oil company
Statoil. Petronas holds a 45 percent stake in the refinery, Conoco 40 percent
and Statoil 15 percent. (DJ) December 9 Russian oil
company AO Yukos announces that it has acquired a controlling interest in
Russia's state owned Eastern Oil Company. Yukos won a 45 percent stake in the
Siberian oil producer for $775 million, adding to the 9 percent that Yukos
already held. The purchase secures Yukos's position as Russia's second largest
oil producer behind AO Lukoil. (WSJ) December 9 French oil
company Elf Aquitaine confirms the discovery of a third oil field in Block 17 in
the Gulf of Guinea off Angola. The oil field, named Dalia 2, has estimated
reserves of 730 million barrels, which will boost Elf's world wide reserves by
15 percent. Elf holds a 35 percent stake, Exxon 20 percent, British Petroleum
16.67 percent, Norway's Statoil 13.33 percent, Norsk-Hydro 10 percent, and
Belgium's Fina 5 percent. (DJ) December 10 The Australia
Gas Light Company has reached a final agreement with Native Title claimants,
opening the way for construction of a $35 million natural gas pipeline in
Australia's New South Wales state. The 140-mile pipeline will connect the towns
of Dubbo and Marsden. Construction is set to commence in January 1998, with
first gas deliveries expected in mid-1998. Under the agreement, the Aborigines
win guarantees that selected cultural sites will be protected during
construction and promises that they will be offered jobs. (DJ) December 10 Texaco, Brown
& Root, and Syntroleum Corporation announce plans to develop a plant that
will convert natural gas to synthetic crude oil. The partners state that it will
be capable of turning gas into heavy and light synthetic crude which can then be
processed into petroleum products. The proposed plant, the first of its kind,
will have a capacity of 2,500 barrels per day and will be located outside the
United States at a sight to be announced in early 1998. (NYT) December 11 Delegates from
150 industrial nations attending a United Nations climate conference in Kyoto,
Japan reach agreement on a protocol to control heat-trapping greenhouse gases.
The protocol, if ratified, would commit nations to roll back emissions of six
greenhouse gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,
perfluorocarbons, and sulphur hexafluoride) below 1990 levels. Under the
protocol, the United States would be required to reduce its greenhouse gas
emissions by 7 percent below 1990 levels, while Europe and Japan would make cuts
of 8 percent and 9 percent, respectively. Developing countries are exempt from
the emissions ceilings for the time being. (DJ) December 16 Talal Kanaan, an
Iraqi official, states that two new oil fields have been discovered in northern
and western Iraq. The field in northern Iraq, called Ismail, is expected to add
to Iraq's 112 billion barrels of reserves while the western field, located in
the western desert, could open a new area for development. (DJ) December 17 A consortium led
by United Kingdom-based Premier Oil PLC signs a $250 million contract to develop
an onshore oil field in Albania. The deal involves the development of the Patos
Merinze oil field where production of heavy crude is to be increased from 6,000
barrels per day to between 25,000 and 50,000 barrels per day within four years.
The consortium consists of Premier with a 25 percent stake, Germany's Preussag
17.5 percent , International Finance Corporation 15 percent , and Albpetrol,
Albania's state owned oil company, 42.5 percent . (DJ) December 17 Australia's
Broken Hill Proprietary (BHP) announces that the Australian government has
granted a production license to the company for the development of the deep
water Blackback oil field in the Bass Strait. BHP states that it will spend
about $71 million on the field, while BHP's 50 percent partner, Esso Australia,
claims that total expenditures will exceed $128 million. Production is expected
to begin in the first half of 1999, with peak production reaching 18,000 barrels
of oil per day in the first year. Esso Australia, a unit of Exxon Corporation,
adds that the field will also yield 35.3 million cubic feet of natural gas per
day. (DJ) December 18 Norway's
state-owned oil company, Statoil, reports that its Smoerbukk South component of
the Aasgard oil field will produce more oil than originally expected. Olav
Strandenaes, staff engineer for Aasgard, states that a well at Smoerbukk South
produced an oil flow of about 15,700 barrels per day but could produce between
30,000 and 37,000 barrels per day. Peak output from Aasgard is estimated to
reach 200,000 barrels per day. (DJ) December 18 Russia's giant
gas company Gazprom cancels a $750 million loan deal with the U.S. Export-Import
Bank. The loan, signed in November 1994, guaranteed financing for purchases of
equipment and services from American companies. Gazprom reports that it decided
to turn down the loan guarantees before they could be withdrawn. The U.S.
government has been considering sanctions against Gazprom for its participation
in a $2 billion project to develop Iran's South Pars gas field. (DJ) December 19 In a deal valued
at nearly $3.5 billion, KN Energy, a Colorado-based natural gas utility,
confirms that it will purchase gas pipeline giant MidCon Corporation from
Occidental Petroleum. MidCon, headquartered in Lombard, Illinois, primarily
transports natural gas from the Gulf of Mexico to as far north as the Canadian
Border. KN Energy's acquisition of MidCon complements its decision in August
1997 to purchase Interenergy Corporation, an energy company that processes and
markets natural gas in the Rocky Mountains. (WSJ) December 23 After changing
one word, the United Nations (U.N.) Security Council agrees to a statement
criticizing, but not condemning, Iraq for refusing to grant U.N. weapons
inspectors full access to suspected weapons sites. Opposition from Russia and
other council members prompted the wording change. The statement comes after
chief weapons inspector Richard Butler told the Security Council that Iraq would
not allow access to all suspected weapons sites, including Iraqi President
Saddam Hussein's palaces and homes. (DJ) December 24 A spokesman for
Shell Nigeria confirms that loadings of Nigerian Forcados crude oil cargos are
to be delayed by 1-3 days until the end of January 1998. This announcement
follows the earlier closures of 20 flow stations. Two stations, Tunu and
Opukushi, had been closed since November 25, 1997, after villagers attacked and
occupied the facilities. Those closures forced Shell Nigeria, on December 19,
1997, to declare force majeure on crude exports from its Forcados terminal from
December 21, 1997 to January 11, 1998. The other 18 flow stations were shut down
on December 21, 1997 because of a contractual dispute. All 20 flow stations have
now begun to reopen, with output of Forcados crude returning to the normal
450,000-barrel-per-day rate, and Shell Nigeria continuing talks with local
communities and its contract workers. (DJ) December 24 Japan's Arabian
Oil Company (AOC) confirms that it will begin a feasibility study in early 1998
for the development of the Dorra gas field in the Neutral Zone, shared equally
by Saudi Arabia and Kuwait. The study will last for about six months and, if it
shows that the project is economically viable, AOC will begin commercial
production of natural gas after 2000. (DJ) December 29 The Presidents
of Iran and Turkmenistan open a 125-mile natural gas pipeline built to transport
Turkmen gas to Iranian power plants. The pipeline cost $190 million and has an
initial capacity of 4 million cubic feet per day. The line runs between the
Korpedzhe field in Turkmenistan and the Iranian border village of Kurtkoy and it
is the first pipeline to carry energy southward from Central Asia. (WSJ)
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April 9 Romanian Prime Minister Victor Ciorbea announces
plans to close 10 large state companies in the next few weeks,
including two oil refineries -- Petromidia Navodari in the Black
Sea port of Constanza and the Darmanesti Rafinaria in Bacau. The
closures are expected to reduce 1997 refining capacity by about
47 percent, to about 363,000 barrels per day. (DJ)
Douglas MacIntyre
dmacinty@eia.doe.gov
Phone: (202)586-1831
Fax:
(202)586-9753
URL:
http://www.eia.doe.gov/emeu/cabs/monchron.html