June 1999 Vol. 220 No. 6  Editorial

Thomas R. Wright, Jr.,  Editorial Director

OPEC compliance and other trivia

In its first report since OPEC announced the latest attempt to reduce members’ production, the International Energy Agency sees evidence that the cartel is rigorously implementing the cuts. In fact, IEA, in its monthly Oil Market Report, says that output from all OPEC countries, except Iraq, was lowered by 1.7 million bpd during the month of April. When Iraq is included in the figures, overall OPEC supplies fell by 1.6 million bpd to 26.2 million bpd, putting compliance at about 85%. And finally, since March of last year, OPEC has chopped 3.7 million bpd from a cumulative target of 4.3 million bpd.

Also adding to the strengthening oil market was a reduction in Mexican production, in line with its pledge, lower U.S. supplies because of an Alaskan decline and predictions for increasing global demand. IEA now expects world oil demand to rise by 950,000 bpd to 74.85 million bpd in 1999, which is 90,000 bpd more that the agency was predicting a month earlier. OECD Pacific and European countries will be responsible for much of these gains, according to IEA.

Now, be advised to take all of the above with a grain of salt. That’s because IEA has had some problems with its estimates and projections in the past (remember the missing barrels?). And coincidentally, this issue also includes an in-depth analysis of the IEA "guesstimates" (see article by George Littell) that explains why their numbers should be suspect. The author also provides his estimate of more realistic supply / demand figures, which show that the balance is much tighter than the published numbers indicate.

Despite the IEA inconsistencies, we’re more than happy to report their findings on OPEC, since it is the first indication we’ve seen that the cartel is beginning to comply with its quotas. Be sure and share this news with your friendly NYMEX trader.

Beware of writing seminars. Since the good news above has yet to trickle down in the form of increased E&P activity or a strengthening in oil field employment opportunities, we felt it our obligation to pass on the details of a really sneaky operation that surfaced recently.

It seems that a Japanese factory worker received an invitation to attend a seminar on writing effective business correspondence. According to the Far East Economic Review, the employee showed up as instructed and was quickly immersed in the first lesson — how to write the boss a letter requesting permission to leave work early. After the first attempts were rejected because of "poor penmanship," the letter was rewritten several times before the boss was finally satisfied.

The school continued all day, and late into the evening. Then by midnight, the students were getting extremely fatigued, and that’s when the boss hit them with the final exercise. Everybody was instructed to compose a sample letter of resignation so as to ensure that each had a complete repertoire of business correspondence for possible use in the future.

If you haven’t guessed by now what was actually going on, you too may qualify for such a job training session.

The supervisor picked up all of the letters, announced, "I accept your resignations," and sent the unfortunate employees home — for good. You also should have guessed the reasons for such a surreptitious method for sacking people. The company avoided obligations, such as severance pay, when employees resigned.

Although the above-described company operates in Asia, word will surely spread elsewhere. So be warned — if your company is in the downsizing mode, skip the letter-writing course.

Attn: Hands. While on the subject of letter writing, some good reader forwarded us a copy of a hand-written memo that had been affixed somewhere on a drilling rig operating somewhere in the U.S. We can’t reproduce the original since the copy is fuzzy, in addition to the fact that it contained several mentions of an unpleasant word. But since the memo is an excellent example of to-the-point writing, we will quote from it. Instead of that unpleasant word, we’ll just use an *. It shouldn’t be hard to figure out what it means:

This is the last warning

Att: hands
Subject: *
Do not * around location — you are cluttering up the area & this land don’t belong to you or P... (drilling contractor) or P... (operator). If you are caught *ing anywhere but the portalet, you will be dismissed.

Also, the man we are renting the portalet from said if he catches it in a mess one more time or if he finds any rags in it one more time, he will take it away.

If he takes it away, you won’t have anywhere to * so my advice is Keep It Clean.

J.R.     

How’s this for service. Gasoline retail outlets (formally known as service stations) have offered many different incentives to customers over the years, from road maps, to drinking glasses, to key chains. However, gas stations in Ningxia, China, have taken the give-away to the next level, so to speak. There, according to China OGP, motorists who fill up with gasoline or diesel receive the services of a prostitute.

China OGP, a biweekly newsletter published by Xinhua News Agency based in Beijing, didn’t say whether both male and female prostitutes were available, but it did elaborate that, "It’s sometimes not clear if customers come for gas or sex, but the sex is based on the condition you have to buy petrol first."

Separated by a common language. The fact that the same words of the English language can have vastly different meanings when used in the U.S. and other English-speaking locales was humorously reinforced by a headline in a recent issue of Upstream. Over an article discussing Atlantic Richfield’s professed desire to merge with BP Amoco, the tabloid style newspaper used the headline: "Arco says ‘eat me’ to hungry Browne."

Instead of the British meaning of "take me, I’m yours," which the story implied, we suspect that Acro’s U.S. employees had the American colloquialism in mind for BP Amoco’s chairman John Browne.

Copyright © 1999 World Oil
Copyright © 1999 Gulf Publishing Company