Oil country hot line

U.S. House votes to open ANWR

The U.S. House of Representatives passed an energy bill that allows drilling in a 2,000-acre portion of the Arctic National Wildlife Refuge in Alaska. However, this controversial bill, as of press time, had yet to go before the Democratic-controlled Senate, which is expected to block any attempt to begin E&P activity in the area. This refuge may hold up to 16 billion bbl of oil. Supporters of the bill claim that tapping into this resource is necessary to lessen the country’s dependence on oil imports. However, the area is home to caribou, polar bears and other vulnerable species, and was given protected status in 1959, thus environmentalists oppose its opening.

Storm temporarily delays output in GOM

Over several days, Tropical Storm Barry caused a significant loss in U.S. production from the Gulf of Mexico region. As a precaution from the approaching storm, two of the biggest majors, Shell Oil and Chevron, along with other oil firms in the affected area, suspended output. Shell shut in more than 300,000 bopd and 1.2 Bcfgd, while Chevron shut in 118,000 bopd and 452 MMcfgd. The GOM provides about one quarter of U.S. domestic production.

Iran, Azerbaijan in Caspian border dispute

The disputed division of an area of the Caspian Sea, including the area’s potential to generate billions of dollars, in oil revenue, has increased tensions between Iran and Azerbaijan. Tensions were heightened when an Iranian gunboat threatened two of Azerbaijan’s exploration vessels, which were operated by BP in the disputed region. Fearing that the Caspian could become a new region of instability, Russia called on both countries to negotiate a settlement. A statement from the Russian Foreign Ministry said the row confirmed the urgent need to define the Caspian’s status among the five littoral states of Iran, Russia, Kazakstan, Azerbaijan and Turkmenistan.

Eni says EU not obliged to obey U.S. ILSA

Eni Chairman Gian Maria Gros-Pietro said the Iran-Libya sanctions act (ILSA) – a U.S. directive that limits the investments of foreign companies in Iran and Libya’s energy sectors – does not apply to European Union countries. Speaking at a meeting in Istanbul, Gros-Pietro said, "There is no agreement between the U.S. and the EU concerning the particular sanctions. Eni CEO Vittorio Mincato said the firm recently signed a $1-billion contract to develop Iran’s Darkhovin field, which is expected to eventually produce 160,000 bopd. Mincato also referenced other investments planned for the area. Analysts believe that the Eni-Iran deal is a test of how the Bush administration will handle the issue.

Hunt Oil acquires Chieftain International

Strengthening its E&P position on the U.S. Gulf Coast and in the Gulf of Mexico, Hunt Oil acquired Chieftain International’s common shares at a price of $29/share. The firm also redeemed all of Chieftain’s other outstanding shares of preferred stock at an aggregate redemption price $25.49/share. All told, the deal is worth slightly more than $555 million.

Gas demand creates peak in U.S. energy jobs

Drilling jobs in the U.S. recently reached a three-year high, due to a great need for power, thus boosting gas exploration. The Department of Labor reports that drilling jobs rose by 1,000, to 341,000 workers in July, the largest number since June 1998. The drilling boom is still in its recovery stage from low energy prices experienced between 1998 and early 1999.

Remote Canadian bog nets large gas finds

Canadian Natural Resources has tapped into a huge natural gas deposit in northeastern British Columbia. Industry analysts refer to the Ladyfern discovery as the country’s richest find in the past two decades. Analysis of test results reveal that the well is capable of producing 100 MMcfgd, putting it on par with deepwater finds in the Gulf of Mexico and Northwest Territories. Canadian Natural, along with three other Canadian companies and some U.S. firms, already has drilled 17 successful wells in the area. This accounts for about two-thirds of the country’s entire projected increase in gas output this year. The region’s estimated reserves is compared to Shell Canada’s Caroline, Alberta, gas pool of 1.8 Tcfg. Additional drilling is necessary to prove the extent of the deposit. Canada’s total production increase for 2001 is expected at 750 MMcfd, with the Ladyfern region accounting for at least 480 MMcfd.

Talisman hits record Canadian gas output

"New production records in the Arch, completion of the Petronet deal and continued drilling success all are very positive news," said Talisman President and CEO Dr. Jim Buckee at a recent CAPP Investment Symposium. Talisman reached record production of 850 MMcfgd. Natural gas output is expected to reach 900 MMcfg during the fourth quarter. The firm expects to employ up to 70 drilling and completion rigs in Canada in the fourth quarter. Already, 10 successful wells have been drilled on Petromet lands. Five rigs are in operation on the property, giving Talisman the capacity to drill 35 wells in second-half 2001.

Labor group pressures Amerada Hess

The largest U.S. labor organization, AFL-CIO, is demanding that Amerada Hess (AHC) allow its shareholders to vote on the proposed acquisition of Triton Energy. AFL-CIO director of investment, William Patterson, said the deal represents "a fundamental change in the nature of AHC’s business and will have a material impact on AHC’s balance sheet and overall risk profile." However, because Amerada funded the $3.2-billion cash and assumed debt acquisition of Triton from its own reserves, the company does not legally need to obtain shareholder approval.