Looking ahead

EIA says world oil production won’t peak for 20 years. While other analysts’ predictions recently claimed peaks as early as 2004, the U.S. Energy Information Administration forecasts that world oil production will not peak until 2021. To prove the potential peak production period, which ranges from 2021 to 2112, the study utilized 12 hypothetical situations based on data from the U.S. Geological Survey on world oil resources. An article that appeared in Scientific American predicted peaks too early, said EIA, whose forecast is based on the assumption that world oil resources do not stand at 1.8 trillion bbl of recoverable oil as claimed by some analysts.

Argentine oil company strategically positions itself to be more competitive. Perez Companc plans to invest $800 million through 2001 in Argentina’s E&P activity and expansion of its service station network. This action is an attempt to improve Perez Companc’s competitive position in the country against Spain’s Repsol-YPF. In 1999, Perez Companc had $1.3 billion in revenue. It now produces 140,700 bopd and operates 75 service stations. Director of Financial Planning Daniel Rennis said, "Our strategy is to maintain costs low but also look for investment that will transform us into a more integrated energy company with high rates of return." The firm acquired a refinery in Sante Fe province that will supply fuels to about 150 service stations by year-end under the Lorenzo brand name. Perez Companc has expanded its E&P activities in Ecuador, Peru and Venezuela, and it plans to change its name to Pecom Energia SA.

Conoco submits plan, Venezuela offers concessions. Conoco submitted a Phase II development plan to the Venezuelan government and state oil company PDVSA for its Gulf of Paria West field. If approved, the $1-billion plan would allow Conoco to explore the field for two more years and delineate future production areas. At press time, the plan had yet to be reviewed within 60 days by either party. If the plan is rejected, Conoco is entitled to submit another proposal. The company, which solicited a revision of its exploration contract terms, was at risk of losing the 500-million-bbl, 25°API oil discovery. Conoco (50%) shares the venture with ENI (40%) and China Overseas Petroleum and Investment Corp. (10%). Meanwhile, foreign firms working in Venezuelan Atlantic territorial waters may be granted concessions, said Foreign Minister Jose Vicente Rangel. Rangel ordered a seismic study of the offshore area, in case the country is able to reach an agreement with Guyana, which also claims the 159,500-sq-km Esquibo zone.

Senate committee passes OPEC antitrust bill. The U.S. Senate Judiciary Committee passed a bill that allows the U.S. government to bring antitrust lawsuits against OPEC. Sen. Mike DeWine (R-Ohio) said, U.S. consumers suffer from "unreasonably high and erratic pricing" and the U.S. must go after the source of the problem. Presently, antitrust laws exclude OPEC. But, if the "No Oil Producing and Exporting Cartels Act" (NOPEC) becomes law, it will enable the U.S government to take antitrust action against foreign states engaging in anti-competitive conduct with regard to oil and other petroleum products. The bill also gives U.S. federal district courts jurisdiction over such cases.

Phillips acknowledges magnitude of Kazakh discovery. Phillips Petroleum Co. reports that the Kashagan oil field contains a "significant discovery." The field’s first well flowed at a rate of up to 3,775 bopd and 7.1 MMcfgd. Two Oklahoma companies that stand to benefit from this project are Parker Drilling and Phillips Petroleum. Phillips is one of nine members in the Offshore Kazakhstan International Operating Co. consortium and holds a 7% stake in the venture. Parker drilled the discovery and is likely to drill follow-ups. Meanwhile, American International Petroleum Corp. plans to renew exploration activity in Kazakhstan on its 4.7-million-acre License 953. The decision was made due to recent studies of the Begesh 1 well by independent petroleum engineering consultants who specialize in the Jurassic oil producing intervals in the country.

Several firms show interest in Nigerian oil fields. With its recent discovery offshore Nigeria, TotalFinaElf plans to double its current output to 300,000 bopd by 2003. Chevron Corp. and Nigeria’s state-owned NNPC also signed a contract with Niger Delta Petroleum Resources to develop Ogbelle field. At least 12 companies are interested in investing in Block OPL 91, offered by NNPC subsidiary, Nigerian Petroleum Development Co. The perspective fields are Okono and Okpoho, and the top bidders are Conoco, Agip and Canadian Petroleum. Meanwhile, the government intends to increase spending to protect its interests in the Niger Delta following attacks on personnel and facilities. Special payments to communities, to ensure pipelines, pumping stations and drilling sites are more secure, are being considered.

Canadian company makes gas find. PanCanadian Petroleum’s second appraisal well (H-08) at the Deep Panuke gas find flowed about 50MMcfgd during a three-day test. It encountered net pay of 325 ft and proved a 450-ft gas column in the pool. The firm’s executive vice president for exploration, Gerald Macey, said that the well indicates Deep Panuke gas field is the most significant discovery in Atlantic Canada in 10 years. "Deep Panuke is emerging as a world class play, and its proximity to markets and pipelines offers PanCanadian the potential to substantially increase reserves and production."