First oil

The oil price roller coaster that we left you with last month has continued into early December, within a range between about $49.50 and $56.00, settling at $51.49/bbl on Dec. 6. That same day, word came from Vienna that OPEC members had reached a preliminary agreement on another oil production cut. On Dec. 7, OPEC and Russia agreed on a 1.2-MMbopd reduction, with 800,000 bopd to come from OPEC members. Oil prices immediately jumped $2+/bbl. Until the situation settles down, it does no good to speculate where activity is headed. In the meantime, a few timely observations are listed on this page.

A quick memo to U.S. President Donald Trump: Please quit jawboning oil prices down further! It is not helpful to the U.S. oil and gas industry that you espouse to value. 

George H. W. Bush. This issue of World Oil was just about set to go to the printer, when word was received of the passing of former U.S. President George H. W. Bush. Thus, we will feature a retrospective on the former President’s life, particularly his career in the oil and gas industry, in our January issue. One thing said again and again about Bush is that while he was extremely competent in his governmental service, and could be tough and competitive, he also was kind and modest, and could make anyone feel comfortable. And despite a bitter election in 1992 that Bush lost, he did not criticize his successor, Bill Clinton, nor did his son, George W. Bush, criticize his successor, Barack Obama.

Reinventing the facts. Unfortunately, the precedent set by the two Bushes has not been adhered to by Mr. Obama. Not only has he repeatedly taken jabs at Mr. Trump, he has reinvented the truth repeatedly and taken credit for things that he has had nothing to do with. A perfect example occurred on Nov. 27, when during an evening event at the Baker Insitute at Rice University in Houston, Mr. Obama declared, “You wouldn’t know it, but it (U.S. oil production) went up every year I was President. That whole, suddenly America’s like the biggest oil producer and the biggest gas—that was me, people….say thank you.” The statement is disappointing and utterly preposterous.

Criticism of his statement was swift and thorough. Former Shell Oil President John Hofmeister told Fox News, “Yes, the production did increase throughout his term, but, frankly, he had nothing to do with it. This was production in states like Texas, Oklahoma, Pennsylvania, Ohio, Colorado, North Dakota, in particular. And these were all state decisions made with industry applications for permits. The federal government had no role.” And Congressman Kevin Brady (Republican – Texas), who represents the far northern suburbs of Houston, commented, “Obama suggesting he is responsible for our oil & energy boom is absurd. His policies strangled the industry and harmed energy jobs. States like Texas and our innovators are the backbone & driving force behind U.S. energy growth.”

Other retrospectives and honors. You will see on page 41 that in addition to former President Bush, we lost another former oil and gas leader, when Apache Corporation founder Raymond Plank passed away on Nov. 9. One item that we ran out of room for on that page, but which deserves mentioning, is that when Apache acquired MW Petroleum from Amoco, many naysayers joked that MW stood for “mostly water.” Yet, later on, when Apache purchased Forties field in the North Sea from BP, it became an industry model of how to buy mature properties and add value through operations.

Meanwhile, we also recognize our editorial advisor, Trent Latshaw, on page 42, for being IADC’s Contractor of the Year. Again, we had to leave something off that page, but it’s worth mentioning that Trent has also been serving during 2018 as one of several Honorary Commanders at Tinker Air Force Base, southeast of Oklahoma City.  

About the Authors

Kurt Abraham

World Oil

Kurt Abraham kurt.abraham@worldoil.com