Energy Information Administration
The following information contains a listing of the major energy events that occured in 1997. Simply click on a specific month to review the energy chronology for that month.
The following chronology lists international events of potential
significance for world energy markets. Sources include:
Dow Jones (DJ), Energy Alert (EA), Energy Market Consultants (EMC),
Herold's Oil Headliner (HOH), New York Times (NYT), Platt's Oilgram
News (PON), Reuters (REU), the Wall Street Journal (WSJ), and
the Washington Post (WP).
January 1 A Turkish newspaper reports an agreement between
Turkey and Iran to build a pipeline to carry Iranian oil from
the Caspian Sea to Turkey's Mediterranean port of Ceyhan. The
agreement also includes a pipeline to carry natural gas from Turkmenistan
through Iran to Turkey. No details are provided. This is the
latest in a series of Turkish-Iranian initiatives (including a
$20 billion natural gas deal and several trade agreements) which
have been criticized by the United States due to Iran's links
to terrorism. (NYT)
January 2 A Russian tanker carrying 19,000 tons of heavy
oil breaks apart and sinks in rough seas in the Sea of Japan.
Japanese helicopters sight an oil slick about 1 mile long and
90 yards wide located about 375 miles west of Tokyo. The tanker,
Nakhodka, was en route from Shanghai, China to Russia's Kamchatka
Peninsula. (DJ)
January 3 President Clinton suspends for another six months
a U.S. law, the Helms-Burton Act, that would allow Americans to
sue foreigners doing business in Cuba on property confiscated
from Americans. (DJ)
January 3 The New York Mercantile Exchange posts its
first longterm, forward contracts for crude oil, covering
delivery as far out as December 2003. There are no takers. (DJ)
January 6 Saudi Arabia reports a discovery of new reserves
of super light crude oil in the central region, near Riyadh.
According to Oil Minister Ali Naimi, this is the seventeenth
such discovery in the area. Further assessments to determine
potential reserves are planned. (DJ)
January 6 Iraq informs its customers that it will reduce
its contractual crude oil sales volumes in order to stay within
the $1 billion limit for the first 90 days of the United Nations'
oil-for-food agreement. (DJ)
January 7 The United Nations approves three more contracts
for the sale of Iraqi oil, bringing to 24 the total number of
contracts approved so far under the oil-for-food agreement. (DJ)
January 7 A Salomon Brothers' survey of 228 oil and natural
gas companies worldwide indicates exploration and development
spending will increase to $81.4 billion in 1997, up 14.7 percent
from $71 billion in 1996. This is described as the "strongest
outlook for oil service demand" in the 15 years of the survey.
Of the total, 62 percent of the investment is planned outside
North America, 28 percent in the United States, and 10 percent
in Canada. (PON)
January 7 Algeria's Prime Minister, Ahmed Ouyahya, claims
his country's proven oil reserves have recovered to their 1971
level (9.84 billion barrels, according to Organization of Petroleum
Exporting Countries statistical sources). (PON)
January 7 A senior official of the China National Petroleum
Company, China's state onshore oil and gas producer, says China
plans to double its natural gas production capacity to almost
1.1 trillion cubic feet per year by 2005. To meet this goal,
China has set a target to add 35 trillion cubic feet of verified
onshore reserves by 2000. Primary areas of exploration are the
Shaanxi-Gansu-Ningxia region, the Tarim Basin, and Sichuan province
-- whose combined total proven reserves are estimated to be at
least 20.8 trillion cubic feet. (PON)
January 10 Russia's Gazprom approves a $2.5-billion project
to build the world's deepest underwater natural gas pipeline (about
6,900 feet below the surface) linking Russia and Turkey via the
Black Sea. A feasibility study will be completed in the second
quarter of 1997. (EA)
January 10 Freezing weather disrupts shipments of petroleum
products on Europe's inland waterways. Major areas affected include
the Dutch canal system and waterways in Belgium, France, and the
Netherlands which connect to the Rhine River. (DJ)
January 15 U.S. Deputy Treasury Secretary Lawrence Summers
announces that Mexico's oil receipts are now free of U.S. claims,
as a result of its early repayment of $5 billion in debt to the
United States and the International Monetary Fund. The U.S. loan
had been guaranteed by the country's oil revenues. (DJ)
January 16 Qatar Liquefied Gas Co. (Qatargas) starts up
a second production line, with output capacity of 2.0 million
tons per year of liquefied natural gas. (DJ)
January 16 Oil from a wrecked Russian tanker in the Sea
of Japan penetrates oil fences set up around two nuclear power
plants belonging to Japan's Kansai Electric Power and Hokuriku
Electric Power. A preliminary investigation indicates the tanker,
which broke up and sank in the Sea of Japan on January 2, collided
with a "halfsubmerged object". (DJ)
January 18 Iraq agrees to export 25 million barrels of
crude oil and 7 million barrels of petroleum products to Jordan
in 1997. The total, which equates to 88,000 barrels per day,
is 7 percent more than in 1996. Jordan relies entirely on Iraqi
crude oil, which is shipped under a special exemption from United
Nations' sanctions against Iraq. Part of the oil is paid for
at a reduced price ($19.10 per barrel in 1997, 25 percent higher
than in 1996) and the rest of the oil goes toward reducing Iraq's
$1.3 billion debt to Jordan and paying for Jordanian exports of
food and medicine to Iraq (slated to increase by 17 percent to
$255 million in 1997). (DJ)
January 21 Yemen signs a final agreement endorsing the
participation of a foreign consortium, Gas General, in its $4.2-million
project to produce 5 million tons per year of liquefied natural
gas. Participants include Total (36 percent), Hunt Oil (15.3
percent), Exxon (14.3 percent), Yukong (8.4 percent), and the
Yemen government (26 percent). (EA)
January 21 Japan's Prime Minister Ryutaro Hashimoto concedes
that his government misjudged the seriousness of the January 2,
1997 oil spill in the Sea of Japan and announces an all-out effort
to prevent further damage. Cleanup has been complicated by heavy
seas and the nature of the oil, a specially refined distillate
destined for use in Siberia, which did not coagulate in cold waters
as expected. Fishermen and environmentalists describe the spill
as a major ecological disaster and Japan's worst oil spill in
20 years. (WP)
January 21 Statoil, Norway's state-owned energy company,
announces an agreement to supply 5.3 trillion cubic feet of natural
gas to Italy under a 25-year contract between Norway's Gas Negotiating
Committee (representing Statoil, Norsk Hydro, and Saga) and SNAM,
a unit of Ente Nazionale Idrocarburi (ENI). The contract, valued
at nearly $14 billion (at current prices), provides for initial
delivery of 71 billion cubic feet in 2000. Annual contract volumes
would increase to 212 billion cubic feet in 2002, and could be
increased an additional 71 billion cubic feet in each subsequent
year. Norway is currently the second largest source of natural
gas for Europe (after Russia's Gazprom). (WSJ)
January 22 President Fidel Ramos orders full deregulation
of the Philippine oil industry effective February 8, 1997, nearly
a month ahead of the established deadline. (DJ)
January 22 Libya officially notifies the United Nations
that it will resume international flights in violation of United
Nations' sanctions. (DJ)
January 22 A senior Qatari official announces plans to
increase Qatar's combined crude oil and condensate output capacity
to 910,000 barrels per day by 2000. Current capacity is about
510,000 barrels per day. (REU)
January 23 An explosion and fire on the IraqTurkey
oil pipeline in southern Turkey damages the unused portion of
the line, but the line currently in use (carrying an estimated
440,000 barrels per day) is undamaged. Kurdish guerillas are
blamed for the attack. (EMC)
January 24 The U.S. Minerals Management Service (MMS),
part of the Department of the Interior, proposes a new regulation
that would revise how federal royalties are calculated on oil
produced from federal lands. Under the proposed regulation, royalties
would be based on a monthly average of futures prices at the New
York Mercantile Exchange, except for oil produced in California
or Alaska (which would be based on prices for Alaska North Slope
crude oil). MMS would adjust the market prices to account for
differences in quality and location. Currently, royalties are
based on the posted (wellhead) prices of the oil. (WP)
January 28 The official Iraqi News Agency (INA) reports
that Iraq has exported a total of 11.5 million barrels of crude
oil from its Persian Gulf terminal of Mina al Bakr since it began
selling oil under the United Nations' oil-for-food deal in December
1996. (PON)
January 29 The Clinton Administration refutes news reports
that Iraq is threatening its neighbors, but restates the U.S.
willingness to act if Iraq does become aggressive. The statement
is in reaction to speculation following reports that Saddam Hussein's
wife has been placed under house arrest and his son risks losing
a leg to gangrene in the wake of a previous assassination attempt.
March light, sweet crude oil futures prices settle sharply higher
on the New York Mercantile Exchange (up 57 cents, to $24.47 per
barrel). (DJ)
January 29 Amoco and Shell Deepwater Development (Shell)
announce plans to jointly develop a deepwater Gulf of Mexico oil
and natural gas discovery known as the Marlin prospect. The prospect
is located in 3,240 feet of water and will cost $500 million to
develop. It is expected to produce 250 million cubic feet of
natural gas per day and 40,000 barrels of oil per day by 1999.
Amoco owns 75 percent of the prospect and Shell owns the remaining
25 percent. (DJ)
January 29 Leftist rebels are suspected of being responsible
for an explosion on a section of Colombia's main oil pipeline
that causes a spill of about 5,000 barrels of crude oil and forces
the first suspension of pumping on the pipeline this year. (REU)
January 30 United Nations' Secretary General Kofi Annan
states he expects Iraqi oil exports under the oilforfood
deal to continue through the year after an anticipated renewal
of a sixmonth agreement at midyear. (DJ)
January 30 Venezuela's stateowned oil company, Petroleos
de Venezuela S.A. (PDVSA), announces that 259 companies have qualified
to participate in its third auction of operating contracts for
mature and marginal oil fields, scheduled for May 1997. According
to PDVSA's estimates, the fields included in the 20 contracts
hold reserves of between 2 billion and 3 billion barrels and output
is expected to reach 300,000 barrels per day by 2006. (HOH)
January 30 A United Nations' spokesman announces that
disbursements from the escrow account set up under the Iraqi oilforfood
plan have begun. The fund is expected to total $239 million by
the end of the day. (DJ)
The following chronology lists international events of potential
significance for world petroleum markets. Sources include:
Dow Jones (DJ), Herold's Oil Headliner (HOH), U.S. Department
of Energy Briefs (DOE), and the Wall Street Journal (WSJ).
February 5 The Energy Policy Committee of the U.S.-Russian
Joint Commission on Economic and Technological Cooperation (the
Gore-Chernomyrdin Commission) meets in Washington to review progress
in U.S.-Russian cooperation, including improvements in the foreign
investment climate in the Russian oil sector. Other topics of
discussion include nuclear nonproliferation; nuclear reactor safety
and peaceful uses of nuclear technologies; the development of
power projects, including for Russia's northern territories; and
progress in energy efficiency. (DOE)
February 5 Japan's Ministry of Finance announces plans
to cut import tariffs on crude oil and most petroleum products
from April 1, 1997, in a phased process that will reduce the country's
crude oil import tariff rate to zero in April 2002. (DJ)
February 6 President Clinton formally unveils a fiscal
1998 budget plan, which includes a proposal to raise $1.35 billion
over the next 5 years with the sale or lease of crude oil from
the Strategic Petroleum Reserve. (DJ)
February 6 The United Nations reports that it so far has
received a total of $343 million in proceeds from Iraq's oilforfood
sale. (DJ)
February 10 Lukoil, Russia's largest oil company, and
the U.S. energy company Arco enter a $5 billion, 18-year joint
venture to prospect for and develop oil in the former Soviet Union.
Lukoil's share is 54 percent and Arco's is 46 percent. The venture,
called Lukarko, plans investment of $400 million in 1997. Initial
projects include a 12-percent stake in the Caspian Pipeline Consortium
and a 5-percent share of the Tengiz field in Kazakstan. (HOH)
February 10 South Africa's deputyminister of mineral
and energy affairs indicates that South Africa will complete the
restructuring of its oil industry by the end of 1997. (DJ)
February 11 Woodside Petroleum receives approval from
the Australian government to proceed with the $1 billion Laminaria
development in the Timor Sea. The project will employ the world's
biggest floating production, storage, and offloading facilities
to produce 170,000 barrels per day of oil beginning in 1999.
Crude oil reserves are estimated at 130-250 million barrels.
Woodside's partners in the development are Broken Hill Proprietary
(25 percent) and Shell (25 percent). (HOH)
February 11 Ecuador's Congress names Fabian Alarcon president,
ending a leadership struggle which began on February 6 when Congress
voted to oust former president Abdala Bucaram for "mental
incapacity." (WSJ)
February 11 In a special report, the International Energy
Agency (IEA) predicts major increases in oil and natural gas production
capacity in Algeria, Libya, and Egypt. Between 1995 and 2000,
the IEA reports that Algeria is projected to increase its crude
oil production capacity by 25 percent (to at least 1.0 million
barrels per day) and its natural gas production capacity by 58
percent (to 3 trillion cubic feet annually); Libya will increase
its crude oil production capacity by 18 percent (to 1.65 million
barrels per day) and maintain natural gas production capacity
at 667 billion cubic feet annually; and Egypt will increase its
crude oil production capacity by 11 percent (to 1.0 million barrels
per day) and its natural gas capacity by 76 percent (to 1.2 trillion
cubic feet annually). Natural gas liquids production will also
increase in all three countries. In addition, the IEA projects
that Algeria's natural gas export capacity will reach 2.9 trillion
cubic feet and Libya's 159 billion cubic feet, representing increases
of 123 percent and 41 percent respectively, compared with 1995
capacities. (DJ)
February 12 A U.S. admiral headquartered in Bahrain reports
that tankers are smuggling tens of thousands of tons of fuel oil
out of Iraq in violation of United Nations' sanctions by reportedly
skirting the shoals of Iran's coast, apparently with Iranian approval.
(WSJ)
February 12 A spokesman for Ecopetrol, Colombia's national
oil company, announces a suspension of drilling in the Coporo
field, which had been hailed as one of the most promising in the
country's history (with 700 million to 1.5 billion barrels of
oil reserves). A company report indicates difficulties in extracting
the oil due to low permeability and low pressure. (DJ)
February 12 The Norwegian Oil Directorate announces it
has upgraded its estimate of total extractable oil and natural
gas reserves on Norway's continental shelf by 16 percent, to 78.6
billion barrels of oil equivalent. (DJ)
February 12 Petroleos Mexicanos (Pemex) announces plans
to invest $5.92 billion in 1997 to boost Mexico's oil and natural
gas production and upgrade operations (a 70-percent increase from
1996). Pemex plans to increase production to 3.08 million barrels
per day of crude oil and 4.55 billion cubic feet per day of natural
gas. (HOH)
February 13 Exxon Corp. files documents with the U.S.
District Court in Anchorage, Alaska, appealing that court's $5.06
billion amended final judgment on the 1989 Exxon Valdez oil spill,
which spilled 11 million gallons of crude oil into Prince William
Sound. (DJ)
February 13 The Congolese government announces plans to
liberalize -- and eventually privatize -- the downstream activities
of the country's petroleum sector. To participate, privatesector
companies will need to obtain approval from the Congolese government.
(DJ)
February 13 Canadian crude oil begins flowing through
the new Express Pipeline to Caspar, Wyoming. Originating in Hardisty,
Alberta, the pipeline interconnects at Casper with the Platte
Pipe Line to transport oil to Wood River, Illinois and other points
in the U.S. Midwest and Southeast. Commercial service on the
172,000-barrel-per-day pipeline is scheduled to start April 1.
(DJ)
February 14 Australia's Broken Hill Proprietary Co. receives
formal approvals to proceed with the development plan and environmental
assessments for developing the first two oil fields in the Timor
Sea Zone of Cooperation, an area jointly administered by Indonesia
and Australia. The two fields (Elang and Kakatua) contain estimated
commercial oil reserves totaling 15 million barrels and are expected
to begin producing in the third quarter of 1998. (DJ)
February 17 Australia's Woodside Petroleum Ltd. announces
a significant increase in natural gas and condensate reserves
from acreage held by the North West Shelf venture. As of December
31, 1996, the total proved raw gas ultimate recovery is estimated
at 24.4 trillion cubic feet, 60 percent higher than the previous
year's estimate, and the proved condensate ultimate recovery is
estimated at 690 million barrels, an 18-percent increase. The
project is a joint venture shared equally among Woodside and its
five partners: Broken Hill Proprietary, Chevron, Royal/Dutch Shell,
British Petroleum, and Japan Australia LNG. (DJ)
February 17 The Middle East Economic Survey reports that
Iraq's State Oil Marketing Organization is increasing crude oil
sales to reach its targeted $1.0 billion in sales for the first
90day period under the United Nations' oilforfood
plan. The total value of contracts for the first 90 days is reported
to be $800-$850 million, lower than expected due to lower oil
prices (14 percent less than when the sale was announced in mid-December
1996) and the failure of Russian companies to lift contracted
volumes. (DJ)
February 17 Raul Baca, Ecuador's new energy minister,
suspends the bidding process announced by the previous government
to build a new 246,000-barrel-per-day pipeline for heavy crude
oil, due to "serious indications of illegalities."
(DJ)
February 18 A Colombian public workers' strike, in effect
since February 11, ends when the government reaches an agreement
with labor representatives, which reportedly includes a promise
not to privatize state-held oil and telecommunications companies.
The strike, which included 5,000 oil workers, had forced the
shutdown of one of the state oil company Ecopetrol's gasoline
plants in Barrancabermeja, the country's main hydrocarbons processing
center. (DJ)
February 18 Presidents Eduard Shevardnadze of Georgia
and Geidar Aliev of Azerbaijan sign a package of 22 cooperation
agreements, including: 1) an agreement for Azerbaijan to supply
natural gas to Georgia, 2) an agreement on an oil pipeline from
Azerbaijan across Georgia to the Black Sea port of Batumi, 3)
an agreement calling for closer cooperation between the two countries'
state oil companies, and 4) and an agreement under which Azerbaijan
will ship 4.4 million barrels of oil by railroad through Georgia
in 1997. (DJ)
February 19 Conoco announces that the U.K. Department
of Trade and Industry has approved development of the North Sea's
Banff oil field, following a 6month production assessment
which maintained a production rate of about 35,000 barrels per
day. Discovered in 1991, the Banff field contains recoverable
reserves of approximately 60 million barrels of oil (38 to 39
degree API gravity) and around 39 billion cubic feet of associated
gas. Start-up is scheduled for June 1998. Conoco holds a 31.7-percent
share of the venture and will operate the field. Conoco's partners
are: Enterprise Oil (27.9 percent); Ranger Oil (26.2 percent);
Hardy Exploration & Production (12.4 percent); and Santos
Europe (1.8 percent). (DJ)
February 19 Deng Xiaoping, China's retired senior leader
and architect of the country's economic reforms, dies at the age
of 92. It is generally believed that his death will not have an
immediate impact on China's economy, including its oil and petrochemical
industries, as the retired leader had not played an active role
in recent years. (DJ)
February 20 U.S. Air Force officials announce the deployment
of 30 warplanes and more than 1,000 airmen in Qatar to help train
the emirate's Air Force and enforce the nofly zone over
southern Iraq, which was established in 1991 after Iraq crushed
a rebellion by Shiite Muslims following the Gulf War. (DJ)
February 21 Cameroon's president Paul Biya officially
inaugurates the Ebome offshore oil field, the country's second
largest. The field began production on January 12 and is expected
to produce up to 12,000 barrels per day. (DJ)
February 21 China's official news service reports that
China National Petroleum Corp. expects to produce 88,000 barrels
per day of crude oil from Tarim Basin oil fields in the country's
northwest in 1997, up from 63,000 barrels per day in 1996. (DJ)
February 24 Romania announces plans to privatize 62 large
state companies by the end of 1998, including oil refineries and
energy distributors. (DJ)
February 24 Russia oil giant AO Lukoil claims to have
the largest proven oil reserves of any company in the world --
10.77 billion barrels, according to an audit of its holdings.
The estimate includes 7.927 billion barrels in Lukoil's main
fields in Western Siberia and 2.85 billion barrels in European
Russia. The company's natural gas reserves in European Russia
are reportedly 1.0878 trillion cubic feet. (DJ)
February 24 Qatar inaugurates the world's largest liquefied
natural gas (LNG) exporting facility and formally launches Qatar
Liquefied Gas Co., which will have total output capacity of 6
million tons per year of LNG. The facilities are part of a new
$7.2 billion industrial zone which also includes a sea port with
a capacity to handle 25-30 million tons of LNG annually. Qatar
plans to build more gas liquefaction plants in the area to exploit
its natural gas reserves of around 237 trillion cubic feet. (DJ)
February 25 A senior oil official in Qatar reports that
Qatar General Petroleum Corp. has approved a $5.0 billion, 5-year
oil drilling program aimed at increasing oil production capacity
to around 700,000 barrels per day (currently around 550,000 barrels
per day). The goal is to spud 202 offshore wells, including 69
wells at the Al Shaheen oilfield. Plans include opening three
new oil blocks and awarding development and productionsharing
agreements to foreign oil companies. (DJ)
February 25 Azerbaijan's parliament ratifies a $2 billion
oil development project in the Caspian Sea -- the country's fourth
major oil exploration contract with foreign companies. The 25year
productionsharing contract, first signed in December 1996,
covers development of the Dan Ulduzu and Ashrafi oil fields.
Partners are Amoco (30 percent), Unocal (25.5 percent), Itochu
(20 percent), Azerbaijan's state oil company (20 percent), and
Delta Nimir of Saudi Arabia (4.5 percent). (DJ)
February 25 Amoco Corp. signs an agreement with Shell
Oil Co. to form a limited partnership called Altura Energy Ltd,
which will operate the combined oil and natural gas producing
assets of the two companies in the greater Permian Basin area
of west Texas and southeast New Mexico. The new company (64 percent
Amoco, 36 percent Shell), which begins operations on March 1,
will be the largest oil producer in Texas and the third largest
independent oil producer in the United States, according to Amoco
officials. In 1996, Altura's 6,300 wells produced roughly 170,000
barrels per day of oil and 220 million cubic feet per day of natural
gas. (DJ)
February 27 Russia's State Property Committee approves
a plan to privatize AO Rosneft, the country's last major oil company
still entirely in state hands. Rosneft was among the last of the
integrated oil companies the government formed from onceindependent
production, refining, and marketing enterprises. In 1996, the
company produced 261,000 barrels per day of crude oil and refined
95,000 barrels per day of crude oil. (DJ)
February 28 Turkey's national pipeline company Botas receives
14 bids for the construction of a 162-mile natural gas pipeline
from the Iranian border to the Turkish city of Erzurum. Iran will
also build a 172mile natural gas pipeline from its Western
city of Tabriz to the Turkish border. Each pipeline is expected
to cost $200 million. Turkey has agreed to buy 10 billion cubic
feet of natural gas annually from Iran beginning in 1998, with
volume increasing to 33 billion cubic feet annually by 2005.
(DJ)
February 28 Russian gas producer and distributor RAO Gazprom
agrees to the terms of an 8-year, $2.5 billion syndicated loan
from 19 international banks. The loan, which is backed by revenues
from Gazprom's gas exports to Europe, will pay for the construction
of Gazprom's planned YamalEurope pipeline to western and
central Europe. (DJ)
February 28 The United Nations announces the approval
of the 35th contract for the sale of crude oil under Iraq's oilforfood
program. The contract is for delivery during the second 90-day
period of the sale, which begins March 10. To date, about $900
million of oil has been contracted for the second 90day
period, during which Iraq is allowed to sell up to $1 billion
worth of crude oil. (DJ)
The following chronology lists international events of potential
significance for world petroleum markets. Sources include:
Dow Jones (DJ), New York Times (NYT), Reuters (REUT), and the
Wall Street Journal (WSJ).
March 1 Sudan signs contracts with national oil companies
from China and Malaysia and a private Canadian company (Arakis)
to develop its oil reserves. The contracts also cover construction
of a 50,000-barrel-per-day oil refinery in Khartoum and a 900mile
oil pipeline to transport up to 250,000 barrels per day to Port
Sudan on the Red Sea. Sudan hopes to increase crude oil output
to 150,000 barrels per day by mid1999 (current production
is estimated between 10,000 and 15,000 barrels per day). A civil
war which erupted in 1983 hampered previous oil industry development
in Sudan, which currently consumes about 50,000 barrels per day
of refined products. (DJ)
March 3 In its regular 60day review, the United
Nations Security Council votes to maintain sanctions on Iraq.
This is the 36th review since sanctions were first imposed in
1990. (DJ)
March 3 Lyondell Petrochemical Co. and Citgo Petroleum
Corp. announce the completion of a $1.1 billion upgrade of their
joint-venture LCR refinery in Houston to process more than 215,000
barrels per day of very heavy crude oil (17 degree API gravity)
from Venezuela and produce higher valued products such as reformulated
gasoline and lowsulfur diesel. Affiliates of Venezuela=s
state oil company (Citgo's
parent company) supply up to 230,000 barrels per day of crude
oil under a long-term contract and Citgo purchases and markets
most of the refined product output. For Venezuela, the venture
secures guaranteed, longterm markets for its heavy crude
oil. (DJ)
March 3 A Venezuelan Navy spokesman announces that a major
oil spill (25,000-50,000 barrels) off Venezuela's western coast
will take at least one month to clean up. The spill occurred
when the Greek tanker Nissos Amorgos ran aground February 28 and
began leaking its cargo of 476,000 barrels of heavy crude oil.
Maraven, a unit of stateowned oil company Petroleos de Venezuela,
reports the tanker was leased by Italybased oil company
Agip. (DJ)
March 3 Mexico's
state oil company Petroleos Mexicanos (Pemex) establishes two
new petrochemical subsidiaries covering the Cangrejera and Morelos
complexes. Establishment of subsidiaries is the first step in
the process of privatizing Mexico's
petrochemical industry. To date, Pemex has established subsidiaries
for 6 of its 10 petrochemical complexes (subsidiaries for Camargo,
Cosoleacaque, Escolin and Tula were announced in late January).
Competitive bidding for the sale of 49 percent of each subsidiary
is scheduled to begin in the second half of 1997. (DJ)
March 4 Mexico's
state oil company Petroleos Mexicanos (Pemex) reports the Campeche
Sound (in the Gulf of Mexico) has hydrocarbon potential of 74
billion barrels of crude petroleum equivalent, proven reserves
of 17.1 billion barrels, and cumulative production of 11.8 billion
barrels. Pemex plans to publish estimates for Mexico's Southern
Region in 1998 and its Northern Region in 1999. At the end of
1995, Pemex claimed that proven hydrocarbon reserves (crude oil
and natural gas) for all of Mexico stood at 62.06 billion barrels
of crude petroleum equivalent. (DJ)
March 5 The United Nations approves the 36th contract
for the sale of Iraqi oil and announces that the $1.07 billion
limit for the first 90day period of Iraq's
oil-for-food program has been "more
or less" met. The $1.07 billion includes $70 million in pipeline fees to Turkey. (DJ)
March 6 The North Sea's
Captain Field, operated by a unit of Texaco, begins production.
Located about 90 miles northeast of Aberdeen, Scotland, the field
holds estimated reserves of 350 million barrels of oil and 53
billion cubic feet of natural gas. It is expected to reach peak
production of 67,000 barrels per day by mid1997. (WSJ)
March 6 The Minerals Management Service of the U.S. Department
of Interior reports a recordbreaking sale of offshore oil
and natural gas leases in the Central Gulf of Mexico, attracting
more than $824 million in high bids from 81 companies (compared
with last year's $520.9
million in high bids from 78 companies). The high bid on each
block must be evaluated to ensure fair market value before a lease
is awarded; each block is approximately nine square miles. (DJ)
March 7 Indonesia's stateowned oil and gas company
Pertamina announces that it has secured a $1.13 billion syndicated
loan to finance the development of its eighth liquefied natural
gas (LNG) plant, to be located in Bontang, East Kalimantan. The
plant, with annual production capacity of 2.95 million tons, is
scheduled to begin operating at the end of 1999 and will supply
LNG to the Korean Gas Company and the Chinese Petroleum Corporation
under a 20year contract. (DJ)
March 7 Spain's Cabinet of Ministers approves the public
offering of the government's final 10 percent stake in Repsol,
the country's largest
oil and energy group. The sale is expected to begin in April.
The government has been reducing its stake in stages since privatization
began in 1989. (DJ)
March 8 Qatar's alKhaleej offshore oilfield begins
production at an initial rate of 20,000 barrels per day, which
will gradually increase to around 30,000 per day by November 1997.
The field is being developed by a consortium including France's
Elf Aquitaine and Italy's
Agip under a productionsharing agreement with Qatar General
Petroleum Corporation. Qatar plans to increase its oil output
to around 700,000 barrels per day by 2000, from 550,000 barrels
per day currently. (DJ)
March 10 Exxon announces a 'significant discovery' in
the Gulf of Mexico, called Hoover, which may contain developable
reserves of more than 100 million barrels of oil equivalent.
(DJ)
March 11 Turkey's Minister of Energy Recai Kutan reports
that Turkey will go ahead with its plans to import Iranian natural
gas, despite objections from the United States. Turkey plans
to begin operating gas power plants by 2000, when the country's
annual demand for natural gas is projected to exceed 950 billion
cubic feet. (DJ)
March 11 Royal Dutch/Shell begins drilling its first appraisal
well at Peru's giant
Camisea field, now thought to be the largest natural gas field
in South America. The field, discovered in 1980, could contain
as much as 11 trillion cubic feet of natural gas and 600 million
barrels of condensate. (DJ)
March 12 By a vote of 99 to 1, Federico Peña
is confirmed by the Senate and later sworn in as the eighth U.S.
Secretary of Energy. (DJ)
March 12 Turkey's BOTAS pipeline company reports that
it has received 29.1 million barrels of oil from Iraq since December
14, 1996 at its Yumurtalik pumping station on the Iraq-Turkey
pipeline, of which 8.4 million barrels were used for domestic
consumption and 20.7 million barrels were shipped abroad by 27
tankers. (DJ)
March 13 In his annual stateoftheunion
address to Congress, Venezuelan President Rafael Caldera reiterates
his administration's determination not to use oil windfall tax
revenue on current spending and notes that his administration
has created a special account for these revenues in the Central
Bank of Venezuela. Separately, Venezuela's
Finance Ministry reports the country produced approximately 3.154
million barrels of oil per day (and exported 2.723 million barrels
per day) in 1996 -- well above its current OPEC production quota
of 2.359 million barrels per day. The government expects both
production and exports to increase in 1997 (to 3.25 million barrels
per day and 2.876 million barrels per day, respectively). (DJ)
March 14 Officials at Japan's
Ministry of International Trade and Industry predict a slowdown
in the country's petroleum
product demand growth over the next 5 years, to an average annual
rate of less than 1 percent (compared with 2.1 percent annually
over the past 5 years). Declines in demand for the electric
power sector (as new coal, nuclear, and liquefied natural gas
plants come onstream) are expected to partially offset continuing
increases in other oil-consuming sectors. (DJ)
March 14 Following the signing of a final agreement on
the maritime boundary between Australia and Indonesia, Australia's
Resources Minister Warwick Parer announces that his country will
move to release exploration blocks for petroleum exploration at
the earliest opportunity. He cites recent petroleum discoveries
in the Timor Sea which previously had not been considered for
petroleum exploration due to uncertainty over which nation had
jurisdiction. (DJ)
March 14 The prime ministers of three former Soviet republics
in Central Asia Kyrgyzstan, Kazakstan and Uzbekistan
sign a series of agreements aimed at forming an economic
union. (DJ)
March 15 Vietnam accuses China of violating its waters
in the South China Sea and demands the immediate removal of a
Chinese exploratory oil rig which allegedly has been operating
between the Vietnamese coast and China's Hainan island since the
beginning of March. (DJ)
March 15 Saudi Arabian Oil Company (Saudi Aramco) reports
that production from the Shaybah oil field will begin in June
1998, earlier than its initial plan which called for production
of 500,000 barrels per day by December 1999. The field is estimated
to contain 7 billion barrels of premiumgrade extra light
crude oil with 40-42 degree API gravity. The $2.5 billion development
program for Shaybah is the largest undertaking by Aramco in recent
years. (DJ)
March 17 Mexico President Ernesto Zedillo formally presents
the country's 1997 energy sector program, under which the government
will invest 69 billion pesos (about $8.7 billion at current exchange
rates) -- an increase of 41 percent in real terms over the amount
invested in 1996 and the highest level of investment in real terms
since 1990. The president also reiterates his support for private
sector participation -- but only up to a point. Mexico has invited
private companies to participate in the transport and distribution
of natural gas, electricity generation, and minority ownership
in the petrochemicals industry, but has refused to open up its
oil production to private investors. (DJ)
March 17 Ecuador authorizes Arco to extract oil from the
Villano field in block 10 of the country's
Amazon region. Initial production is expected to be 30,000 barrels
per day of oil. Arco also plans to build an 80,000-barrel-per-day
pipeline that will connect the field with Ecuador's main crosscountry
oil pipeline by the second quarter of 1999. (DJ)
March 18 Independent oil experts suggest that Mexico may
have overstated the size of its petroleum reserves by as much
as 30 percent since the 1970s, and indicate that Mexico's
latest reserves estimates are more in line with outside estimates
such as the U.S. Central Intelligence Agency's.
This is based on an analysis of a statistical report, released
earlier this month, in which Mexico reduced its estimates of proven
reserves in the Bay of Campeche to 15 billion barrels of crude
oil and 9.7 billion cubic feet of natural gas (from previous estimates
of 23.5 billion barrels of crude oil and 11.6 billion cubic feet
of natural gas in 1996). The report was the first Mexican reserves
report to be audited by independent experts. The Bay of Campeche
currently accounts for about 80 percent of Mexico's
oil and natural gas production. Reserve studies of other major
petroleum areas (including the Chincontepec and Tabasco-Chiapas
fields) are not expected to be completed until 1999. (NYT)
March 18 Mobil announces the start-up of oil production
from the second production facility on the Wandoo field (the Wandoo
B platform) on Australia's
North West Shelf, which will boost the field's
production to 40,000 barrels per day by May 1997 (current production
is 8,000 barrels per day). Australia's
Bureau of Agricultural and Resource Economics reports several
other projects are expected to approach full production capacity
in the next fiscal (July 1997 June 1998), boosting the country's
total production by 5.7 percent. New production will be concentrated
in the Gippsland Basin offshore southeastern Australia. Other
projects expected to come on stream after 1998 include the Elang/Kakatua
and the Laminaria/Corallina fields in the Timor Sea, which together
could add a further 170,000 barrels per day of production. (DJ)
March 18 Iraq grants Russia most favored nation status
to receive Iraqi oil exports in exchange for humanitarian goods.
Of the first 37 contracts approved by the United Nations in the
oil-for-food sale, 7 went to Russian companies representing almost
20 percent of the volume of oil in the sale. (DJ)
March 18 The United Nations approves the 38th and 39th
contracts for the sale of Iraqi oil under Resolution 986, the
Iraqi oilforfood sale, bringing the total dollar value
of contracts approved to date to about $1.9 billion of oil (out
of a total value of about $2.14 billion allowed over the first
6 months of the oil sale period). According to a Western diplomat,
Iraq had shipped 55.9 million barrels of crude oil worth about
$1.11 billion under the agreement through March 14, including
4.3 million barrels worth about $77.5 million since the second
90day period began on March 10. Most of the oil (about
63 percent) has been shipped through the Iraq-Turkey pipeline
from Kirkuk to Yumurtalik. (DJ)
March 18 An explosion damages Colombia's
Cano LimonCovenas oil pipeline near the Venezuelan border,
the second attack on the country's
oil facilities in less than two days. On March 17, an explosion
affected three pipelines used to carry oil, natural gas, and petroleum
products to Colombia's largest refinery in Barrancabermeja. British
Petroleum asks Colombian President Ernesto Samper to beef up security
near the Cusiana field, the country's largest (with estimated
reserves of 1.6 billion barrels of crude oil). Earlier this month,
Colombia's state oil
company Ecopetrol reported that the Cano LimonCovenas pipeline
was attacked 12 times in January and February, and the VasconiaCovenas
pipeline was attacked once in February. The attackers reportedly
are members of the National Liberation Army, a proMarxist
group that opposes the government's oil policies. (DJ)
March 18 India's
oil minister T.R. Baalu announces a new oil policy aimed at increasing
investment in the country's
oil sector. The new policy allows -- for the first time -- oil
exploration ventures that are 100-percent private and foreign-owned.
The previous policy required companies to form joint ventures
that gave staterun partners up to 40-percent equity when
they bid for acreage. (DJ)
March 19 The Czech government announces a 20-year agreement
to purchase 1.9 trillion cubic feet of natural gas from a Norwegian
consortium of natural gas exporters (Norsk Hydro, Saga Petroleum,
and Statoil). Shipments will begin May 1 at the rate of 49 million
cubic feet per day, increasing to 290 million cubic feet per day
(106 billion cubic feet annually). Currently, Russia's Gazprom
is the only supplier of natural gas to the Czech Republic. The
contract represents the first time Norwegian natural gas will
enter a market in central Europe. The agreement is part of the
Czech government's strategy
to diversify its imports of natural gas. (DJ)
March 19 Texaco announces that it has received approval
from the United Kingdom (U.K.) Department of Trade and Industry
to develop the Galley oil and gas field in Block 15/23a of the
U.K. North Sea. Initial production will begin in the first quarter
of 1998 and reach 43,000 barrels per day of oil equivalent. (DJ)
March 20 China's
official news service reports that China hopes to build an annual
natural gas production base of about 1.1 trillion cubic feet by
2005 (compared with current production of about 600 billion cubic
feet) and double its known onshore reserves of natural gas by
2000 (to about 70.6 trillion cubic feet). Exploration and development
work will focus on gasrich regions such as the ShaanGanNing
Basin in centralwestern China (with proven natural gas
reserves currently estimated at about 8.1 trillion cubic feet),
the Tarim Basin in the far west (with estimated proven reserves
of about 5.6 trillion cubic feet), and Sichuan province in the
southwest (with estimated proven reserves of 7.1 trillion cubic
feet). In addition, another 1.8 trillion cubic feet of natural
gas was recently identified in the eastern part of Qinghai province,
just east of Xinjiang. (DJ)
March 20 Yemen's Oil Minister Mohammad Said alAttar
reports that he expects Yemen's
1998 oil output to rise to 420,000 barrels per day from a current
average of 360,000 barrels per day. (REUT)
March 20 Colombia's Mines and Energy Minister Rodrigo
Villamizar reports that his country's
oil output will top 800,000 barrels per day by the end of 1997.
(REUT)
March 21 Great Lakes Gas Transmission announces plans
to double its capacity to transport Canadian natural gas to pipeline
interconnections in the United States no later than the winter
of 1999-2000, at a cost of $2.5 billion. The project, which involves
about 1,000 miles of pipeline and associated gas compression facilities
along the entire length of the company's
pipeline system, will allow shipment of an additional 2 billion
cubic feet per day of natural gas primarily to markets in the
northeastern United States and eastern Canada. (WSJ)
March 22 Iraqi Oil Minister Amer Rashid announces the
establishment of a new Iraq/Russian oil company which will work
independently of Iraq's national oil company, and reports that
other agreements would be signed with France and China. Russia
and France were Iraq's main arms suppliers before the Gulf War.
(DJ)
March 24 Royal Dutch/Shell reports that local protesters
have detained 127 of its staff operating in western Nigeria and
taken over six flow stations, disrupting 100,000 barrels per day
of crude oil production at six fields. The company plans to maintain
oil production at approximately 900,000 barrels per day by increasing
production from other fields in the eastern region. (DJ)
March 24 Presidents Geidar Aliev of Azerbaijan and Leonid
Kuchma of Ukraine sign 17 economic, cultural, and military cooperation
agreements, including a memorandum on cooperation in the oil and
gas industries under which Ukraine will build platforms for a
future Caspian Sea drilling project. (DJ)
March 25 The United Arab Emirates appoints Obeid bin Saif
alNasiri oil minister, replacing Rakadh Bin Salem who had
served as acting oil minister since May 1995. (DJ)
March 27 Trinidad and Tobago signs a production sharing
agreement with British Gas, Agip, and Deminex for the North Coast
Marine Area, a new hydrocarbon province off Trinidad's northern
coast. The consortium plans to drill two exploration wells in
the next 6 months. The area includes four undeveloped gas fields
(Hibiscus, Orchid, Iris and Poinsettia) with potential reserves
of more than 3 trillion cubic feet of natural gas. (DJ)
March 27 Shell reports it is losing 210,000 barrels per
day of production due to protests at its oil installations in
Nigeria (twice as much as originally estimated) but that exports
are not being affected because the company has large crude oil
stockpiles in the country. (DJ)
March 30 The stateowned Dubai Natural Gas Company
opens a new methyl tertiary butyl ether (MTBE) plant with a capacity
of 500,000 metric tons a year. The company's chairman, Hussain
Alsayegh, reports that most of the output from the $250 million
facility will be exported to the United States. (DJ)
January 1997
February 1997
March 1997
April 1997
May 1997
June 1997
July 1997
August 1997
September 1997
October 1997
November 1997
December 1997
The following chronology lists international events of potential
significance for world petroleum markets. Sources include: Dow
Jones (DJ), the New York Times (NYT), and the Wall Street Journal
(WSJ).
May 1 In its regular 60day review, the United Nations
Security Council votes to maintain sanctions on Iraq. This is
the 37th review since sanctions were first imposed in 1990. This
vote, however, does not affect the humanitarian oil sales. (DJ)
May 2 Shell Nigeria announces the release of 15 contractor
staff held hostage for 12 days by a local community in Nigeria's
Western Delta and the reopening of flow stations that had been
disrupted by unrelated civil unrest in the area since April 25.
The company expects output of Forcados crude oil, which initially
was disrupted by 80,000 barrels per day, to return to normal within
a few days. (DJ)
May 2 South Korea Development Corporation buys a 15-percent
stake in the North Sea's Captain field from Texaco Inc. The
purchase will provide a steady supply of high-sulfur crude oil
that will be refined into fuel oil for Korean power generation
and will enable the country to develop a strategic fuel reserve.
(NYT)
May 2 British Petroleum announces a new oil discovery,
the Liberty field, off the north coast of Alaska. Recoverable
reserves are estimated at 120 million barrels. (NYT)
May 4 Chinese deputy Vice Premier for trade Li Lanqing
and Iranian vicepresident Mohammad Hashemi sign a new trade
protocol under which exports of Iranian crude oil to China would
be increased from the current level of 70,000 barrels per day
to 100,000 barrels per day (200,000 barrels per day by 1999).
China also accepts an offer from Iran to equip a Chinese oil
refinery to handle high-sulfur Iranian crude oil. (DJ)
May 5 The New York Mercantile Exchange (NYMEX) adds Colombia's
Cusiana crude oil as a deliverable for its light, sweet crude
oil futures contract, effective with the July 1997 contract.
(DJ)
May 6 The Energy Information Administration releases the
International Energy Outlook 1997 which forecasts worldwide
demand for crude oil and natural gas will grow steadily through
2015. Crude oil demand is projected to average 77.8 million barrels
per day by 2000 and 104.6 million barrels per day by 2015. Natural
gas demand is projected to reach 98.1 trillion cubic feet by 2000
and 144.5 trillion cubic feet by 2015. This represents an average
annual demand increase of 2.1 percent for crude oil and 3.1 percent
for natural gas between 1995 and 2015. (DJ)
May 6 The director of exploration and production for Petrobras,
Brazil's stateowned oil company, reports that the company
plans to spend $3 billion per year to increase its production
to 1.6 million barrels per day by 2001 (from the current level
of 900,000 barrels per day and a projected level of 1.2 million
barrels per day in 1998). Editor's
note: The Energy Information Administration estimates that Brazil
produced 840,000 barrels per day of crude oil and 35,000 barrels
per day of natural gas plant liquids in March 1997. (DJ)
May 7 Mexico's energy regulatory commission (CRE) awards
the concession to distribute natural gas in the northern state
of Sonora to a U.S.Mexico consortium, including U.S. company
KN Energy Inc. (DJ)
May 8 Elf Petroleum Nigeria begins construction of its
Obite Gas Project, which will supply 253 million cubic feet per
day of natural gas to the Nigeria liquefied natural gas plant
being constructed at Bonny. The project, which is scheduled for
completion in 1999, also involves the construction of an 87-mile
pipeline to Bonny and production of about 18,000 barrels per day
of condensates. (DJ)
May 9 Colombia's national oil company, Ecopetrol, reports
that guerrillas have attacked the country's largest oil pipeline
(Cano LimonCovenas) 24 times so far in 1997, spilling a
total of 78,000 barrels of crude oil and reducing production by
500,000 barrels. Colombian armed forces blame the National Liberation
Army for 460 separate attacks since the pipeline started operating
in 1986. (DJ)
May 10 General Binford Peay, head of the U.S. Central
Command, warns that U.S. forces will respond if Iran tries to
make good on a threat to close the Persian Gulf's Strait of Hormuz
if it felt threatened by the United States. Iran issued the threat
earlier in May, following reports that U.S. officials were considering
missile strikes against Iran if it was found responsible for a
truck bombing that killed 19 American servicemen in Saudi Arabia
in 1996. In addition, Iran held military exercises in the Gulf
to demonstrate its naval capability. The United States has 18,550
Air Force, Army, Navy, and Marine personnel on 14 ships or at
installations in Saudi Arabia, Kuwait, Qatar, and Bahrain. The
Strait of Hormuz is the gateway to about onefifth of the
world's oil supply. (DJ)
May 10 Qatar Liquefied Gas Company (Qatargas) signs a
contract with Spain's Enagas for the sale of 420,000 tons of liquefied
natural gas (LNG) -- 32,300 tons per month for delivery over a
13-month period, beginning September 1997. This will be the company's
first LNG sale to the European market. Current capacity is 6
million tons of LNG per year, with most of the output committed
to Japan's Chubu Electric Power Company under a 25year contract.
(DJ)
May 10 Turkey and Iraq sign a preliminary agreement to
build an 807-mile pipeline to carry Iraqi natural gas to Turkey's
Mediterranean port of Ceyhan. The project must secure $2.5 billion
in financing prior to implementation. (DJ)
May 10 Libya's oil minister reports that his country has
lost about $3 billion in oil revenues since the United Nations
imposed sanctions in 1992. The sanctions (which limit diplomatic
contacts, ban arms sales, and prohibit air traffic in and out
of Libya) are intended to force the surrender of two Libyan suspects
wanted in connection with the 1988 bombing of Pan Am Flight 103
over Lockerbie, Scotland, in which 270 people were killed. Editor's
note: In November 1993, United Nations sanctions were extended
to include a freeze on Libyan funds overseas, a ban on the sale
of equipment for oil and gas export terminals and refineries,
and tougher restrictions on civil aviation and the supply of arms.
(DJ)
May 13 Russian President Boris Yeltsin signs a decree
substantially increasing the state's role in managing natural
gas giant RAO Gazprom. The order names First Deputy Prime Minister
Boris Nemtsov to head a special commission charged with setting
government policy at the 40-percent stateowned company (Russia's
largest) and calls on the government to draft new regulations
on foreign investment in Gazprom shares. (DJ)
May 14 Yemen's oil minister, Mohammed alAttar, reports
that his country's oil production capacity is expected to increase
to 500,000-550,000 barrels per day by 2000. Editor's
note: The Energy Information Administration estimates that Yemen
produced 410,000 barrels per day of crude oil in March 1997.
(DJ)
May 14 The leaders of Iran, Turkey, and Turkmenistan sign
an agreement under which 1.059 trillion cubic feet per year of
Turkmen natural gas would be exported to Turkey, via Iran, for
shipment to European markets. (DJ)
May 15 Turkish Energy Minister Recai Kutan reports that
Turkey's state pipeline company, Botas, has started construction
work for the first phase of a pipeline that will transport Iranian
gas into Turkey. He adds that Iran has also begun building its
part of the pipeline under the $20 billion, 22year gas project
announced by the two countries in August 1996. (DJ)
May 15 The managing director of Shell Exploration and
Production Namibia reports that the company has applied to Namibia's
Ministry of Mines and Energy to have the Kudu gas field declared
an official petroleum field. This marks the first step in developing
the field, located off the country's southern Atlantic coast,
which is believed to contain sufficient natural gas to power a
planned 750-megawatt power plant in Namibia for at least 20 years.
(DJ)
May 15 The Canadian Gas Potential Committee estimates
that Canada has 570 trillion cubic feet of discovered and undiscovered
natural gas in conventional and unconventional reservoirs (including
coalbed methane, tight gas reservoirs, and shale gas). The reserves
represent approximately 50 years of supply from conventional sources
and another 50 years from unconventional sources. Most of the
natural gas is located in the Western Canada Sedimentary Basin.
(DJ)
May 15 Tosco Corporation announces the reopening of its
Marcus Hook refinery in Trainer, Pennsylvania, after a $100 million
refurbishment program. Tosco bought the refinery in 1995 from
British Petroleum, and shut it down in January 1996 after failing
to reach an agreement with union workers over a new labor contract.
In 1996, Tosco said it was cutting the refinery's crude processing
capacity to 150,000 barrels per day from the previous level of
190,000 barrels per day. (DJ)
May 16 A final agreement creating the Caspian Pipeline
Consortium (CPC) is signed by project participants: Russia (24
percent), Kazakstan (19 percent), Chevron Corp. (15 percent),
AO Lukoil/Arco Corp. (12.5 percent), Mobil Corp. (7.5 percent),
AO Rosneft/Shell Corp. (7.5 percent), Oman (7 percent), Agip
SpA (2 percent), British Gas PLC (2 percent), Oryx Corp. (1.75
percent), and Kazakstan Pipeline Ventures, a joint venture of
Kazakstan's state oil company and Amoco Corp. (1.75 percent).
The Russian government plans to transfer its stake to two Russian
oil companies, AO Lukoil and AO Rosneft. CPC plans to begin building
a 932-mile pipeline to transport crude oil from the Caspian region
to Russia's Black Sea coast in 1998 and begin shipping around
558,000 barrels per day of oil in 1999 (planned peak capacity
is 1.4 million barrels per day). (DJ)
May 16 USX Corp. and Ashland Inc. announce plans to combine
most of their downstream oil businesses, creating one of the largest
U.S. refiners and continuing an industry trend to consolidate
gas station operations. This would be accomplished by a joint
venture (for which Ashland Petroleum Co. has signed a letter of
intent with Marathon Oil Co., a unit of USX) involving 5,400 gas
stations and 6 percent of U.S. refining capacity. (WSJ)
May 20 President Clinton signs an executive order barring
new U.S. investment in Burma (also known as Myanmar), effective
May 21 and renewable annually. U.S. companies have invested about
$250 million in Burma, primarily in the oil and gas sector. The
biggest U.S. investor is Unocal, which is building (with France's
Total) a $1.2 billion pipeline from Burma's Yadana natural gas
field to an electric power plant in Thailand. (DJ)
May 21 The U.S. Department of Energy authorizes its financial
advisors to begin contacting prospective bidders for the Elk Hills
Naval Petroleum Reserve, one of the largest producing fields in
the lower 48 states. Bids must be received by October 1, 1997,
and the sale is expected to close by February 10, 1998. (DJ)
May 22 A Mobil Oil executive reports that his company
has relocated three rigs outside Nigeria, and may relocate a
fourth, because of the Nigerian government's failure to maintain
payments for its share of joint venture production costs. Most
of Nigeria's oil production (currently 2.2 million barrels per
day) comes from joint ventures with international oil groups led
by Shell, Mobil, and Chevron. (DJ)
May 23 The International Energy Agency (IEA) issues a
communique reaffirming that oil security remains a serious concern,
particularly given the prospect of increasing import dependence
and the increasing concentration of remaining oil reserves in
the Middle East. The IEA states that spare crude oil production
capacity is now lower than before the 1990 Gulf crisis, and the
potential for further fuel switching has diminished. The communique
was issued following a meeting of the IEA's Board of Governors,
at which Hungary was welcomed as the organization's 24th member.
(DJ)
May 24 Mohammad Khatami, a moderate cleric, is declared
the winner in Iran's presidential election. He will succeed President
Hashemi Rafsanjani, who steps down in August after two, fouryear
terms. (DJ)
May 27 Former Iraqi oil minister Issam AlChalabi
estimates Iraq needs $5 billion of outside investment and two
to three years for its oil industry to restore production to the
level prior to the imposition of United Nations sanctions (3.8-4.2
million barrels per day). He also indicates that it would take
5 years and $30-50 billion to achieve production capacity of 5.5
million barrels per day. (DJ)
May 28 The United Kingdom is reported to have added at
least 161,000 barrels per day of new offshore oil production in
1997. New oil field startups could add up to 190,000 barrels
per day more by the end of the third quarter of 1997, and another
84,000 barrels per day at the beginning of the fourth quarter.
(DJ)
May 28 West Africa magazine reports that a widespread,
complicated series of interethnic claims and conflicts stretching
across state and local government boundaries in Nigeria's Niger
Delta leaves many onshore and offshore oil and gas projects vulnerable.
This area produces about 37 percent of Nigeria's onshore oil
production. (DJ)
May 28 Russian President Boris Yeltsin signs a decree
designed to limit foreign investment in natural gas giant RAO
Gazprom. (DJ)
May 28 Royal Dutch/Shell Group (RD) reports that the Cornea
oil structure, located in the Browse Basin offshore northwestern
Australia, could contain up to 2.67 billion barrels of oil. (DJ)
May 30 Iraq's Oil Minister, Amer Mohammed Rasheed, reports
that the full allotment of $2.14 billion in Iraqi oil (including
$140 million for maintaining oil pipelines) has been exported
under the United Nations' 6-month oilforfood program.
Oil sales totaled 120 million barrels under 51 contracts with
international companies. The United Nations is expected to renew
the agreement, which began in December 1996 and expires in early
June. (DJ)
The following chronology lists international events of potential
significance for world petroleum markets. Sources include: Dow
Jones (DJ), the New York Times (NYT), the Wall Street Journal
(WSJ), and the Washington Post (WP).
June 1 Oman and Iran agree to draw up a joint development
plan for the Bukha/Hengam oil field which is jointly owned by
the two countries. (DJ)
June 1 Shell Oil Company and Mobil Corporation combine
their California exploration and production units into a joint
venture company, Aera Energy LLC (58.6 percent Shell, 41.4 percent
Mobil). With proven reserves of about 1 billion barrels of oil
equivalent and production of about 250,000 barrels per day, the
venture is now the largest oil producer in California. (WSJ)
June 2 Amoco Corporation announces plans to sell about
15 percent of its domestic oil and natural gas reserves to allow
the company to focus future efforts on six regions: Trinidad (where
it is expanding a liquefied natural gas plant); Venezuela; the
Eastern Mediterranean (especially Egypt's
Nile Delta); the Caspian Sea; heavy oil projects in Alberta, Canada;
and deep-water projects in the Gulf of Mexico. The reserves --
located in Wyoming, Colorado, New Mexico, Oklahoma, and along
the coast of the Gulf of Mexico -- total about 450 million barrels
of oil equivalent (about two-thirds natural gas) and provide about
10 percent of the company's
domestic production. (WSJ)
June 3 Japan's Minister of International Trade and Industry
says Japan needs to diversify the sources of its oil supplies
further to improve its energy security. (DJ)
June 4 In a unanimous vote, the United Nations Security
Council renews for another 180-day period its "oilforfood"
initiative with Iraq. Under the resolution, Iraq may sell $2 billion
worth of oil to buy food, medicine and other necessities to alleviate
civilian suffering under the sanctions imposed when it invaded
Kuwait in 1990. (WP)
June 4 China signs separate agreements with Kazakstan and
Iraq to secure oil supplies into the next century. The agreements
cover a $4.3 billion investment in Kazakstan's
Aktyubinsk oil enterprise over the next 20 years, a planned oil
pipeline from Kazakstan to China, and the development of the Ahdab
oil field in southern Iraq (1 billion barrels at a cost of $1.2
billion). (WP)
June 5 Russia's
Deputy Prime Minister Alfred Kokh announces plans to sell an additional
15 percent share of state-owned oil producer AO Lukoil. No details
are provided. (WSJ)
June 6 Australian Prime Minister John Howard announces
that his country will phase out the use of lead in automobile
gasoline by 2010. (DJ)
June 6 Venezuela completes a 5-day auction of 20 marginal
oil fields in its third round of sales to foreign investors, earning
about $2 billion (twice as much as expected). Successful bidders
receive a 20-year production contract with certain minimum investment
levels and must pay set royalties and fees for each barrel of
oil produced. They include U.S. companies Atlantic Richfield,
Chevron, Pennzoil, and Phillips Petroleum; British company Lasmo;
and the China National Petroleum Company. (WSJ)
June 10 Chevron Corporation signs a production-sharing
agreement to perform seismic tests and drill wells deep beneath
China's second largest
oil field (Shengli). This is the first onshore exploration pact
in China for Chevron, which already has offshore leases in China's
Bohai Gulf and the South China Sea. (WSJ)
June 10 The National Iranian Oil Company agrees to spend
$250 million to upgrade a large refinery in southern China to
increase its capacity for processing Iranian crude oil. (WSJ)
June 10 Kazakstan and Azerbaijan agree to build a 1600-mile
pipeline along the floor of the Caspian Sea to ship 315-350 million
barrels per year of Kazak oil via Turkmenistan to Baku in Azerbaijan.
The pipeline would continue overland across Georgia and Turkey
to the Mediterranean Sea. Construction is slated to begin in 2000
and be completed within 3 years. (WP)
June 11 Canadian Prime Minister Jean Chretien names Ralph
Goodale the country's new natural resources minister. (DJ)
June 13 Triton Energy reports that it expects combined
production from Colombia's
Cupiagua and Cusiana fields to reach 500,000 barrels per day in
early 1998 (currently 185,000 barrels per day). The company had
planned to achieve this goal by the end of 1997, but has recently
encountered problems in construction and drilling operations in
the Cupiagua field. (WSJ)
June 18 Turkey and Ukraine sign a deal to build a pipeline
from Turkey's Mediterranean coast to its Black Sea coast for oil
shipments to Ukraine. (DJ)
June 19 The U.S. Supreme Court rules in favor of the Federal
Government in an 18-year-old boundary dispute with Alaska over
control of offshore areas along the Arctic coast. The decision
effectively prevents development of the area's
oil and natural gas reserves, as the Federal Government has said
it would not permit drilling off the coast of wildlife refuges.
(NYT)
June 19 Exxon appeals the $5.3 billion verdict awarded
in 1994 to fishermen, native Alaskans, and others harmed by the
1989 Exxon Valdez oil spill. (NYT)
June 20 Talisman Energy receives permission to develop
the Ross oil field in the United Kingdom sector of the North Sea.
The field, which contains estimated reserves of 60-100 million
barrels of oil and 20-30 billion cubic feet of natural gas, is
expected to begin producing in September 1998 and reach peak production
of 40,000 barrels per day in 1999. (WSJ)
June 20 Russian President Boris Yeltsin orders cuts of
up to 40 percent in natural gas prices for businesses that pay
their overdue Gazprom bills in cash by the end of the year. High
customer debt (estimated at $12.15 billion) makes it difficult
for the company to pay its national tax arrears. (WSJ)
June 24 Russia's
State Duma (lower house) approves a long-awaited law that would
allow production-sharing agreements for development of major natural
resource deposits, including five oil fields (Samotlor, Krasnoleninsk,
Romashkinskoye, Prirazlomnoye, North Sakhalin), the Kuranakhskoye
gold field, and the Yakovlevskoye iron-ore deposit. Investment
in these projects is expected to total $16 billion. The legislation
now goes to the upper house for consideration, which is expected
to consider the measure this fall. (DJ)
June 25 Partners in Australia's
Stuart Oil Shale project announce that they have obtained financing
to proceed with the first phase of development for what could
become the world's first
commercial project extracting crude oil from oil shale. If successful,
the project would produce 85,000 barrels per day within 10 years.
Partners are Canada's
Suncor (50 percent) and two Australian companies (Southern Pacific
and Central Pacific, 25 percent each). (WSJ)
June 26 The Organization of Petroleum Exporting Countries
(OPEC) extends its current output ceiling of 25.033 million barrels
per day of crude oil through the end of 1997. The official communique
indicates quota adherence will be "closely monitored"
and announces that the next meeting would take place November
26 in Jakarta, Indonesia. OPEC Secretary General Rilwanu Lukman
tells a news conference after the meeting that OPEC's target price
remains at $21.00 per barrel. Individual quotas remain as follows
(in millions of barrels per day): Saudi Arabia, 8.0; Iran, 3.6;
Iraq, 1.2; Venezuela, 2.359; Nigeria, 1.865; Indonesia, 1.33;
Kuwait, 2.0 ; Libya, 1.39; United Arab Emirates, 2.161; Algeria,
0.75; and Qatar, 0.378. (DJ)
June 26 Iranian Oil Minister Gholamreza Aghazadeh reports
that U.S. sanctions to deter Iran's
ability to attract outside capital "haven't
worked at all" because creative financing methods allow foreign
companies to avoid punishment under the Iran and Libya Sanctions
Act (which was passed in 1996 and applies to investments of $40
million or more). He cites the use of buyback contracts under
which companies pay for development rights in oil rather than
in dollars, and direct financing by foreign banks (which are not
covered by the sanctions law). (DJ)
June 26 The government of Portugal confirms the sale of
a 27.5 percent stake in petroleum company Petrogal to Saudi Aramco.
Under an agreement scheduled to be finalized by the end of 1997,
Saudi Aramco would supply Petrogal's
sour crude requirements under a long-term contract. Petrogal operates
two refineries (with capacity totaling 300,000 barrels per day)
and supplies 50 percent of the country's
petroleum products. Portugal's
government retains a 45 percent stake (down from 55 percent) and
Petrocontrol, a private consortium of shareholders, retains a
27.5 percent stake (down from 45 percent). A leading Portuguese
newspaper estimates the reference value of the Saudi share at
$1.4-1.5 billion. (DJ)
June 27 International Energy Agency head Robert Priddle
says he "regrets" the previous day's
action by the U.S. House Appropriations Committee approving a
$209 million sale of crude oil from the U.S. Strategic Petroleum
Reserve. Priddle notes that U.S. strategic stocks have already
dropped from a 90-day supply to less than 70 days currently, following
earlier sales of 30 million barrels of crude oil. (DJ)
June 27 China's
Premier Li Peng and Russia's
Prime Minister Viktor Chernomyrdin sign a series of agreements
to boost trade and economic relations between their countries.
Included is a planned $4-5 billion project involving the development
of Russian natural gas reserves in the Irkutsk region of western
Siberia to supply up to 1 trillion cubic feet per year via pipeline
to China's coast. (DJ)
June 30 Iran's top military commander says his country
does not intend to start a war with the United States, but promises
to turn the Persian Gulf into a slaughterhouse if attacked. The
pledge follows a series of U.S. warnings about Iran's potential
to use missiles to close the Strait of Hormuz to oil tankers and
other shipping. (DJ)
June 30 Nigeria's
government authorizes the Nigerian National Petroleum Company
to swap 100,000 barrels per day of crude oil for petroleum product
imports, reversing a year-earlier decision banning the practice
due to widespread abuses. The action comes one week after the
government authorized importing 33 cargoes of oil products to
ease fuel shortages associated with problems at domestic refineries.
(DJ)
The following chronology lists international events of potential
significance for world petroleum markets. Sources include:
Dow Jones (DJ) and the Wall Street Journal (WSJ).
July 1 The Russian government begins offering many of
its remaining oil-industry holdings in a series of auctions and
investment tenders expected to raise $780 million by mid-December
1997. The privatizations, which are open to foreign bidders,
include Russia's stakes
in AO Vostsibneftegaz (38 percent), AO Vostochnaya Neftyanaya
(51 percent), AO Sibur (36.28 percent), AO Tyumenskaya Neftyanaya
(48.68 percent), AO Komitek (27.1 percent), and AO Norsi-Oil (45.45
percent). (WSJ)
July 1 The British colony of Hong Kong reverts to Chinese
rule as a Special Administrative Region. Chinese Prime Minister
Li Peng declares Beijing's rule of law will protect foreign interests
in post-handover Hong Kong. China has promised laissez-faire
oversight under the principle of "one country, two systems."
(DJ)
July 5 China National Petroleum Corporation (CNPC) reports
plans to intensify exploration in eight basins that contain 80
percent of the country's
onshore oil and gas reserves while continuing its efforts to secure
overseas supplies. According to CNPC, the company has verified
25.6 billion barrels of crude oil reserves and 22.6 trillion cubic
feet of natural gas reserves in the past 6 years. (DJ)
July 6 The government of India approves the sale of shares
in four state-run companies, including Gas Authority of India
Ltd. and Indian Oil Corp. (DJ)
July 9 Corpoven (a unit of Venezuela's
state-owned oil company) signs a formal agreement with three
U.S.-based companies (Atlantic Richfield, Phillips Petroleum,
and Texaco) creating a $3.5 billion joint venture to extract and
upgrade 197,000 barrels per day of extra-heavy crude oil
in the Hamaca Zone of Venezuela's Orinoco Belt. Drilling is expected
to start in late 1998, with oil production beginning in 1999 at
an initial rate of 35,000-40,000 barrels per day. The first of
two upgrading facilities, designed to produce a grade similar
to Alaskan North Slope crude oil, is scheduled to be completed
by 2002. (DJ)
July 11 The German cabinet approves a supplementary budget
that includes proposals to sell part of the government's
strategic oil reserves to meet European Monetary Union criteria
for a budget deficit of 3 percent of gross domestic product.
Germany plans to sell about $224 million worth of reserves in
1997 (roughly 15 million barrels of oil), and additional volumes
in 1998 and 1999. (DJ)
July 11 A tripartite agreement on the transportation of
Caspian Sea crude oil via the Baku-Grozny-Novorossiysk
pipeline is signed in Baku by Russian Oil and Energy Minister
Boris Nemtsov and representatives of Azerbaijan's
state oil company and the Chechen oil company. The pipeline,
which will pump oil from Azerbaijan across Chechnya to a Russian
export terminal in Novorossiisk, is expected to be operational
within one month. (DJ)
July 15 The president of the Colombian Petroleum Association
declares that repeated attacks on Colombia's oil installations
have led to a "critical" situation for private oil companies
operating in the country. This is in reaction to three attacks
in the last 10 days, which forced state-owned oil company Ecopetrol
and field operator Occidental Petroleum Corporation to close down
production and declare force majeure for all export commitments
in the Cano Limon field. The Cano Limon-Covenas pipeline
has been attacked 470 times since it began operations in 1986,
causing damage in excess of $1.5 billion; however, this is the
longest time field operations have been suspended due to the attacks.
(DJ)
July 15 Guatemala awards oil exploration contracts in
its northern Peten province to four foreign
firms (including U.S.-based Oil Technology Service) and one
Guatemalan company. Minister of Energy and Mines Leonel Lopez
Rodas expects company investments of $128 million in nine potential
fields in 1997 and 1998 will make Guatemala self-sufficient
in energy supply. Guatemala previously awarded 23 drilling contracts
to private firms. (DJ)
July 16 The Brazilian Senate approves the creation of
a regulatory body (the National Petroleum Agency) required for
implementation of a 1995 constitutional amendment allowing private
domestic and foreign enterprises to compete with federally controlled
oil conglomerate Petroleo Brasileiro SA (Petrobras). The legislation
also creates a National Energy Policy Council. (DJ)
July 16 Tengizchevroil, operator of Kazakstan's
Tengiz field, awards a $250 million contract for construction
of a new oil and gas processing plant that will increase production
capacity by 30 percent (from 160,000 barrels per day currently
to 240,000 barrels per day by the end of 1999). (DJ)
July 17 Texaco, the government of Saudi Arabia, and the
U.S. unit of Royal Dutch/Shell agree to merge their U.S. East
Coast and Gulf Coast refining and marketing businesses in a joint
venture company pooling four refineries (with total capacity of
823,000 barrels per day) and 14,717 gasoline stations currently
owned by Shell and Star Enterprise (a joint venture between Texaco
and Saudi Aramco). Under the agreement, Shell would own 35 percent
of the new company, and Texaco and Saudi Arabia would hold 32.5
percent each. (WSJ)
July 19 Iran opens an oil jetty for petroleum product
exports at Nowshahr port on the Caspian Sea. According to Iran's
managing director of Ports and Shipping Organization, the country
plans to increase its total port capacity to 4 million barrels
per day by the year 2022 (currently 800,000 barrels per day).
(DJ)
July 22 The first shipments of oil produced from Kazakstan's
Tengiz field arrive at terminals on the Black Sea in Novorossiysk
(Russia) and Batumi (Georgia) for subsequent export through the
Bosphoros Strait. Volumes total between 100,000 and 150,000 barrels
per day. (DJ)
July 23 A senior official with Royal Dutch/Shell reports
that the company plans to spend at least $10 billion in Latin
America by the year 2005, primarily in four countries: Peru,
Venezuela, Brazil and Argentina. Major projects include Peru's
Camisea fields and the Bolivia-Brazil natural gas pipeline. (DJ)
July 23 The U.S. State Department rules that Turkey's
August 1996 agreement to purchase $23 billion worth of natural
gas from Iran over a 20-year period does not violate the Iran
and Libya Sanctions Act. In a May 1997 memorandum of understanding
with Iran and Turkmenistan, Turkey modified the original arrangement
so that the natural gas will be purchased from Turkmenistan rather
than Iran. (DJ)
July 23 Officials from Turkmenistan, Pakistan, Unocal,
and Delta (a Saudi oil company) sign an agreement to build a natural
gas pipeline from Turkmenistan across Afghanistan to Pakistan
(871 miles). Under the agreement, a consortium will be formed
by October 1997, construction will begin by December 1998, and
the project will be completed by 2001 at an estimated cost of
$2.0-2.7 billion. The pipeline will carry up to 706 billion cubic
feet of natural gas annually from Turkmenistan's largest natural
gas fields, at Daulatabad. (DJ)
July 24 The government of Chile approves CMS Energy Corp.'s
$650 million Atacama project, which will transport natural gas
via pipeline from northern Argentina across the Andes Mountains
to two new natural gas-fired electric generating units at
Mejillones in northern Chile. The project is being built in conjunction
with Chile's Empresa Nacional de Electricidad SA. Construction
of the pipeline will begin in the fourth quarter of 1997 and commercial
operations will begin by early 1999. (DJ)
July 25 Presidents Gonzalo Sanchez de Lozada of Bolivia
and Fernando Henrique Cardoso of Brazil sign construction contracts
for the longest natural gas pipeline in South America -- a 1900-mile
pipeline from Rio Grande, Bolivia to three Brazilian cities (Sao
Paolo, Curitiba, and Porto Alegre). The 32-inch diameter pipeline,
estimated to cost about $2 billion, is scheduled to begin operating
in 1999 at an initial rate of 283 million cubic feet per day,
increasing to 565 million cubic feet per day after 7 years. Major
contractors include Enron, Bechtel and Royal Dutch/Shell. (DJ)
July 26 Iran's President Hashemi Rafsanjani formally inaugurates
the 232,000-barrel-per-day Bandar Abbas refinery -- the country's
eighth oil refinery. The facility, which will run Iranian Heavy
crude oil, has partially started up and is scheduled to be fully
operational in March 1998. Iran hopes to become selfsufficient
in gasoline, kerosene, jet fuel, and diesel, and begin exporting
petroleum products at that time. Domestic petroleum demand averages
about 1.1 million barrels per day. The country's
refining capacity (excluding Bandar Abbas) totals about 1.2 million
barrels per day. (DJ)
July 28 Egypt's
Petroleum Minister Hamdy el-Banbi announces that the private
sector will be allowed to launch distribution networks for natural
gas as part of the government's plan to substitute natural gas
for oil. (DJ)
July 28 Azerbaijan's
President Heydar Aliyev, on his first visit to the United States,
repeats his support for Turkey's port of Ceyhan on the Mediterranean
Sea to be the main export route for his country's Caspian Sea
crude oil. (DJ)
July 29 State-owned oil company Petroleos de Venezuela
(PdVSA) signs agreements turning over operating contracts for
17 marginal crude oil fields to 17 national and international
consortiums, the winners in the country's third round of auctions
for 20 marginal oil field contracts held in June 1997. The auction
raised $2.08 billion. Two fields received no bids and the winning
bid on one field (Mata) was later revoked by PdVSA. (DJ)
July 30 The U.S. Federal Energy Regulatory Commission
approves several natural gas pipeline projects for delivery of
Canadian natural gas to the United States: 1) the U.S. portion
of Alliance Pipeline Ltd.'s new $3.6 billion pipeline from British
Columbia and Alberta to the Midwest (conditional upon Canadian
regulatory approval); 2) expansion and extension of Northern Border
Pipeline from the Canadian border to the Chicago area; and 3)
a portion of the Maritimes & Northeast Pipeline from Sable
Island, Nova Scotia, to markets in New England. (DJ)
July 31 Russian state-owned oil company AO Rosneft
announces it is pulling out of a $1 billion oil deal (signed
July 4) to develop Azerbaijan's
Kyapaz field, in the Caspian Sea. The deal has been challenged
by neighboring Turkmenistan, which claims the field as its own
(under the name Serdar). (DJ)