Note: if you are looking for the March 2008 Chairman's Corner article, Look here http://www.spegcs.org/en/art/?700
Who were the top 3 refiners in the U.S. in 1957? Shell, Gulf, Texaco? Nope….Standard Oil of New Jersey, Standard Oil of Indiana, and Socony. Drilling permits are approved on the edge of downtown Los Angeles; on the Los Angeles Country Club; adjacent to the 20th Century Fox movie lot; but, alas, not in Hollywood. Plans are announced for the formation of a jointly-owned company that will store and ship liquid methane to Europe. The company will be named Constock and will be jointly owned by Continental Oil and the Chicago Stockyards. (A marriage of two companies accustomed to handling H2S.) For the first time, the field prices for natural gas in all producing areas become available. The average base price ranged from $0.109 to $0.217 per mcf.
East Texas crude oil - $3.25/bbl; U.S. active rig count – 1,797
China agrees in principle to allow Occidental Petroleum to develop and operate the world’s largest coal mine in Shanxi province. Meanwhile, Viet Nam issues a strong protest against joint Chinese/foreign drilling in Beibu Gulf, an area Viet Nam claims to be in their territorial waters. Viet Nam warns China that it will be responsible for all the consequences of its illegal actions. (This could get ugly.) As the price of foreign crude oil continues to drop, $5-10/bbl oil import fees are discussed in Congress. El Paso Co. announces plans to move back to El Paso from Houston, in an effort to improve operating efficiency.
U.S. active rig count – 2,030
Chevron and Royal Dutch Shell join the stampede into the Caspian Sea region by forming a 50-50 alliance to identify and develop new projects in that region. One of the biggest mergers in petroleum industry history occurs as Halliburton Co. and Dresser Industries agree to merge in a stock deal valued at $7.7 billion. The surviving company will be named Halliburton, be headquartered in Dallas, and its CEO will be current Halliburton Chairman Dick Cheney. Also announced is a merger between EVI and Weatherford Enterra. This combination will reportedly create the world’s fourth largest oilfield service company. Enron Energy Services secures a contract to provide electricity to all of the California State University and the University of California campuses, a deal thought to be the largest direct-access power contract in the country. (Best stock up on flashlights students.)
Light sweet crude oil - $15.23/bbl; Natural gas - $2.21/MMBTU; U.S. active rig count – 957
The Rest of the Yarn
This month we begin a series of articles profiling international public figures that have significantly impacted the petroleum industry in the 20th and 21st centuries.
Ahmed Zaki Yamani was born in Mecca, Saudi Arabia in 1930. His father was a scholar of Islamic law and a qadhi, or religious judge, whose patience, wisdom, and quiet sense of humor inspired his son as he grew up in Islam’s holiest city, one of three children.
The young Yamani earned a bachelor’s degree in law at Cairo University in 1951 and a master’s degree in law at New York University in 1955.
Yamani’s first job was as a legal adviser to the Oil and Tax departments of the Saudi Ministry of Finance from 1956 to 1958. At the same time, he established one of the first private law practices in Jeddah. He maintained his private practice throughout his public career. From 1958 to 1960 he was a legal adviser to the Council of Ministers, becoming a minister of state and a member of the Council of Ministers in 1959.
The Saudi royal family soon recognized Yamani’s potential. Yamani was one of the first of the capable, English-speaking, Western-educated young Saudi technocrats equipped to deal with the Americans and Europeans who were eager to secure access to the lucrative and strategically important oil of the Arabian Gulf. While oil revenues were needed for development, Saudi leaders were also concerned about the effects of rapid economic change on the values of a conservative Muslim society. Crown Prince Faisal, who was virtually running the Saudi government administration under his older brother King Saud even before he was crowned king in 1965, was a strong supporter of Yamani. In March 1962 the royal family named Yamani to the key post of Minister of Petroleum and Mineral Resources, a position he would hold for 24 years.
Next month, we examine how Yamani shaped first the Saudi petroleum industry and later, most profoundly, the international petroleum industry.
First brought on production in 1892, by the mid-1950’s this field had cummed more than 20 million barrels of oil from wells located in front yards, back yards, vacant lots, and urban parks of a large metropolitan city. Name this field.
If you would like to participate in this month’s quiz, e-mail your answer to email@example.com by noon, March 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.
Answer to February’s Quiz
In 1680 a Dutchman named Huygens built the first conceptual reciprocating engine (a gun muzzle containing a piston and a protruding connecting rod attached to a revolving crank) in an effort to find a better use for its fuel – gunpowder.
Answer to January’s Quiz
In the late 1950’s, the deepest hydrocarbon production in the state of Texas was coming from the Ellenburger formation.
Congratulations to January’s winner – Jerry Davis
To Read this Month's Chariman's Corner incorrectly linked here, please go to http://www.spegcs.org/en/art/?700