Looking ahead

ExxonMobil plans to continue fight against U.S. sanctions policy. ExxonMobil is attempting to influence U.S. sanctions policy that prevents American companies from doing business with countries penalized by Washington. Lance Johnson, an ExxonMobil vice president, said that his company anticipates a day when it will be able to compete with foreign companies in countries such as sanctions-bound Iran, Iraq and Libya. Johnson’s argument was motivated by TotalFina Elf’s Patrick Rambaud, who suggested that the sanctions were keeping Iraq from increasing its production capacity in a manner that could hamper economic growth. TotalFina Elf is one of the companies expected to play a key role in rebuilding and developing the Iraqi oil industry when sanctions are repealed.

Eni to invest $450 million in drilling project in Egypt. Over the next five years, the Egypt division of the Italian oil/gas company, ENI, intends to spend $450 million on exploration and drilling activity in the Belayim oil fields located on the Sinai Peninsula. According to Fillippo Capurso, general manager of the division, exploratory drilling had already begun. Therefore, the investment is just an addition to the firm’s activity in the Gulf / Mediterranean regions. Investments have been ongoing since 1955 in the area. Unfortunately, production (currently about 186,000 bpd) has been declining, but a plan submitted to Egypt General Petroleum Corp. proposes raising production to 200,000 bpd.

Privatization of Statoil probably delayed. Conflicting statements suggest growing differences in opinion concerning Statoil’s privatization. Norway’s ruling Labor party requested that the privatization of the state-owned oil company be postponed until 2001. The party recommended that it put off submitting the proposal on the restructuring of the government’s oil policy until after its national party meeting in November so that a parliamentary decision can be made early next year. The party had initially promised to put forward a complete oil-policy White Paper in June 2000. However, Olav Akselsen, Norway’s oil minister, said the paper may still be put forward. A major issue with Statoil is its wish to get all of the state’s direct financial interest (SDFI) in 150 offshore licenses ahead of the planned public offering.

IPAA pushes for Congress to enact policies to aid oil/gas producers. The Independent Petroleum Association of America urged Congress "to act on national policies and reforms that allow environmentally sound development of our country’s vast, domestic natural gas and petroleum resources." Barry Russell, IPAA president said, "Energy supply remains a national security issue." He also stated that "Sources of petroleum for the U.S. come from countries with a history of instability, and our policies must recognize our country’s vulnerability. To meet future energy demands, two critical factors are–access to capital, and federal government addressing access to resources under government-controlled lands. Over 200 Tcfg is either off-limits or difficult to permit in certain areas."

Innovative emulsion-breaking technology takes off. ExxonMobil and Imperial Petroleum Recovery Corp. (IPRC) have agreed to further develop and market an unusual emulsion-breaking technology. The IPRC-developed Microwave Separation Technology (MST) has met initial performance standards and was recently commissioned at an ExxonMobil refinery. Single MST units can process up to 4,000 bbl/day of emulsion and can be installed in parallel for higher volumes. MST technology uses high-power radio frequency / microwave energy to preferentially heat water within an emulsion. This creates differences in surface tension and density that allows cost-effective separation of emulsions. The technology will enable some fields with cost-prohibitive emulsion-separation problems to become economical.

Middle Eastern oil countries hold talks on disputed fields. Kuwait, Iran and Saudi Arabia were scheduled to hold talks in June to resolve a territorial dispute. The continental shelf that lies between the three countries is rich in gas resources estimated at 7 Tcf, according to the Middle East Economic Survey. In a May announcement, motivated by Kuwait’s request, Iran claimed to have stopped all drilling at the Dorra field in hope that the problem would be resolved soon and the countries’ friendship remain intact. Dorra field is located in a sector of the disputed northern Gulf waters.

Canada/U.S. rig count up, Canadian oil discovery in GOM. The number of rigs exploring for oil and gas in Canada rose by 60 to 270 the week ending June 2, compared to 158 last year. In the U.S., rig count rose by two to 866, compared to 555 in 1999. Gulf of Mexico’s rig count, however, fell by one to 130, compared with 100 a year ago. While the number of U.S. rigs operating offshore held at 135, those exploring on land reached 711. U.S. rigs searching for oil fell by five to196, but those in quest of gas rose by six to 668. Meanwhile, Canadian Occidental Petroleum Ltd. made a deepwater discovery on its Gunnison prospect on Garden Banks Block 668 in the GOM. The 17,000-foot discovery, located in 3,150 ft of water, encountered about 275 ft net pay of hydrocarbons in three main zones.