International
OTC proves that offshore sector remains healthyLow oil prices may have dimmed the outlook for onshore E&P work (particularly in the U.S. and Canada), but the offshore sector is still thriving. Consider recent Hughes Christensen rig tallies. On May 8, 1998, the count showed 686 land rigs working in the U.S., down 83 units from the same week in 1997. Offshore rigs, however, totaled 131, up 12 units from the 1997 figure. In Canada, where most of the activity is onshore, 154 rigs were working, down 53 (or 26%) from a year earlier. Outside the U.S. and Canada, onshore rigs in March 1998 totaled 532 units, 19 less than the same month in 1997. However, international offshore rigs jumped by 30, to 274. Another reliable measure is the willingness of companies to spend money for travel, exhibits and promotions. The granddaddy of all venues incorporating these factors is the Offshore Technology Conference, staged in Houston. Judging from figures generated during May 4 – 7, 1998, OTC was a success, and the offshore sector has much to celebrate. Attendance jumped to 49,641, up 6,247 individuals from 1997's total. The number of exhibiting companies gained a rousing 328, to 1,846 firms. The amount of exhibit space used also grew 30.5%, to 369,966 sq ft. Activity (particularly deep water) in the U.S. Gulf of Mexico is a major factor. But other regions also are encouraging. Offshore rigs are up 23 in the Far East / South Pacific, up 13 in Latin America, down just one in Africa, down two in the Mid-East and down two in the North Sea. The latter figure runs contrary to angst expressed by operators earlier this year about potential Labour Party changes to the UK tax regime. As British Science, Energy and Industry Minister John Battle pointed out at an OTC briefing, "we granted industry's desire to extend the (tax) review into the next (UK federal) budget rather than render a decision in the last budget." Findings from that review were due to be released as this column went to press. In any event, reiterated Battle, "our policies are aimed at keeping the UKCS as a competitive oil and gas province. We are fully aware of the importance of keeping it that way." Against a background of low oil prices, the Labour regime will fully account for impacts that tax changes may have on investment in existing and new fields. Battle said operators will be able to consult further with officials on the matter, soon. "There is no 'tight' deadline, so oil companies will have plenty of time to get their views in. Any changes made in the fiscal regime will not come before next year." Also at OTC, Norwegian Deputy Minister of Petroleum and Energy Haakon Steinar Gill reported that the country's offshore investment averaged between K45 billion and K60 billion ($6.1 billion and $8.1 billion) from 1992 through 1997. This compares to K30 billion to K43 billion ($4.05 billion to $5.81 billion) annually from 1986 through 1991. Gill said Norwegian production will average 3.15 million bopd in 1998 and should peak at 3.9 million bopd in 2001. He faced a wave of questions about Norway's role in the OPEC / non-OPEC output reduction agreement. He said that Norwegian production will be cut 100,000 bopd by reducing each field's anticipated production curve by 3%. In other words, Norway should still see a net gain in oil production this year versus last, despite the agreed cutback. Gill also said that Norway has "no plans for further steps to stop new projects." Furthermore, "If the production cut does not have the desired effect, it will be suspended."
In other OTC news, Antonio Carlos Agostini, E&P Director for state firm Petrobrás, noted Brazil's entry last year into an exclusive club of 17 countries that produce 1 million bopd or more. Petrobrás also just completed installation of an ESP in a subsea well in 1,109 m (3,638 ft) of water. The well will bring onstream first oil from Albacora East field. It represents the first completion and operation of such equipment in very deep waters, worldwide. Later this year, Petrobrás will bring first oil onstream from two wells in 6,079 ft of water at Roncador field. The Seillean FPSO will handle 20,000 bopd. Oil price gymnastics. Have you had trouble predicting oil prices? Consider the plight of 100 folks attending ICEED's (International Research Center for Energy and Economic Development) annual gathering of international energy economists in Boulder, Colorado. In April 1997, 28 of these attendees — economists, oil company planners, executives, consultants — took part in an annual contest to guess what oil prices would be in April 1998. This April, only three of those 28 guesses were within $1.50/bbl of the WTI spot price,
quoted on April 15, 1998, at $15.48/bbl. The closest guess was by a professor of petroleum
policy and economics, who said $15. Next closest were the president of an international
petroleum consulting firm, at $16.25, and a petroleum economist, who said $14. The other 25
guesses ran well above the actual price, from $17.49/bbl to as high as $23.72/bbl. Gee, what
a concept — economists' predictions were wrong, again! Nevertheless, some excellent
papers about global energy data and trends were presented at ICEED's gathering. So, if you'd
like to hear these next year, and offer your own price guess, contact ICEED's staff for
attendance details by E-mail, iceed@stripe.colorado.edu; phone, (303) 492-7667; or fax,
(303) 442-5042.
Copyright © 1999 World
Oil |
