Recently it was “Cash for Clunkers”, but in 1959 a stimulus offered to buy more gasoline was “Stamps for Gasoline Purchases”. (For those too young to remember, including most of the newsletter staff of course, redeemable trading stamps were given for gasoline purchases at many “service stations”.) $ A well-known petroleum economist, peering into the future, foresees natural gas as the number one problem of the oil industry. Since at that time oil paid far more than its proportionate share of the cost of oil and gas production, as natural gas usage increased, the burden on the oil producer would become disproportionately greater and ultimately oil would become less and less able to compete for the energy dollar. $ The “electronic computer” is definitely finding a home in oil-processing operations, as several operators have successfully simulated complete refineries using these amazing new tools. (Estimated time to simulate a complete refinery at that time…5 man-years.)
East Texas crude oil - $3.25/bbl; U.S. active rig count – 2,181
The Halliburton-developed Ultrasonic Cement Analyzer is reportedly capable of monitoring the strength development of oilfield cement slurries under simulated downhole temperature and pressure conditions, thus substantially reducing the WOC (Waiting on Cement) time. $ Two U.S. megamergers are progressing, as Chevron seeks FTC approval for its proposed sale to Sohio of mergee Gulf’s southeastern marketing assets, while Texaco proceeds with a $765 million after-tax write-down of mergee Getty’s assets. $ Foreign operators continue to prospect for domestic U.S. acquisitions, as Australia’s BHP reports plans to acquire large Kansas independent Energy Reserves Group.
U.S. active rig count – 2,695
Key oil exporters are busily offering reassurances to consuming nations that the Y2K rollover will not disrupt global oil supplies. (They hope!) $ Forecasters predict that Norway will overtake the UK as the largest North Sea oil and gas producer by the year 2001. $ API President Red Cavaney tells a Houston global warming conference that most of the U.S. oil industry remains strongly opposed to the Kyoto Protocol, which mandates steep cuts in developed countries’ greenhouse gas emissions while excluding developing country participation. $ Venezuelan voters give President Hugo Chavez an overwhelming mandate as they approve a referendum on a new constitution giving him sweeping new powers and a strong shot at a 12-year term of office. $ Royal Dutch/Shell reveals that it is raising its cost-savings target from $2.5 billion to $4 billion in an effort to better compete with new rivals ExxonMobil and BP Amoco. Shell’s exploration and chemicals businesses will account for the majority of the cost cuts.
Light sweet crude oil - $26.16/bbl; Natural gas - $2.30/MMBTU; U.S. active rig count – 813
The Rest of the Yarn
This month we continue our look back at some of the famous (and infamous) historical sites in Houston which had connections with the oil industry.
Niels Esperson was born in Denmark, eventually migrating to Houston with hopes of striking “black gold” – and he did. The Humble oil field made him millions, which he quickly diversified into a number of ventures. Esperson dreamed of building a skyscraper at Travis and Rusk, but died in 1922 before he could follow through. His widow, Mellie, built it for him in 1927, naming the beautifully ornamented skyscraper in his honor.
In 1928, Mellie Esperson sold the building with the condition that its name would not change. The buyer eventually defaulted on the mortgage and she bought it back for 75 percent of what it had cost her to build. In 1941, she completed the Mellie Esperson Building next to (but shorter than) her husband’s. The Niels Esperson Building’s detail and six-story Grecian top make it one of Houston’s most beloved. And now you know…The Rest of the Yarn. (Article excerpted from “Houston Then & Now”.)
In December, 1949, what area of the world was proclaimed to be the most active oil area at that particular time? If it is inside the U.S., name the county and state; if it is outside the U.S., name the country and field.
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon December 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant.
Answer to November’s Quiz
The first commercial natural gas liquefaction plant was built in Cleveland, Ohio by Hope Natural Gas Co. and Gas Machinery Corp.
Answer to October’s Quiz
The early Texas oilman whose drilling and refining operations near Corsicana, funded by Standard Oil, became the nucleus of Magnolia Petroleum Co., which later became an important part of Standard of New York as Socony Mobil, was J.S. Cullinan.
Congratulations to October’s winner – Gail Glover with AGR Subsea