Florida reenters the wildcatting arena with two significant prospects currently underway in the Florida Panhandle. To-date only the small Humble-operated Sunniland field has exhibited commercial production in the state. $ California’s first and only permanent offshore drilling platform off Santa Barbara County passes its first bad weather test without incident after being buffeted by 14-ft waves and 75-mph winds. (That would be a day for a picnic in the North Sea.) $ Cairo and Baghdad (pre-Hussein) continue posturing, with Iraq’s 800,000 BPD of crude production as the carrot. (Egypt, Iran, Kuwait, and now us….Iraq just cannot seem to avoid conflict.) $ The Western Company introduces a reportedly more efficient fracturing fluid system spiked with dry crystals of sulfamic acid which dissolve slowly leading to acid-etching-enhanced fracturing of carbonate reservoir rock. (Don’t look now, but its back!)
East Texas crude oil - $3.25/bbl; U.S. active rig count – 1,895
On the heels of Iraq’s claims of successful air strikes against tankers using Iran’s Kharg Island export terminal, President Reagan pledges to keep the Strait of Hormuz open to international shipping. $ Global Marine dispatches another diving vessel to the South China Sea to investigate the sinking of its Glomar Java Sea drillship in a tropical storm with the loss of its 81 member crew. $ With the reported impending retirement of House Speaker Tip O’Neill, oil industry lobbyists eagerly await the ascension of his anticipated replacement, oil-friendly Jim Wright of Texas. (Remember old “bushy eyebrows”?) $ Sedco agrees to furnish a dynamically-positioned drillship for the ocean drilling program funded by the U.S. National Science Foundation and nine other countries. Texas A&M will be the operator of this 5-year drilling program designed to core the ocean beds at various sites around the world.
U.S. active rig count – 2,271
One of the biggest mergers in petroleum industry history is taking shape as Halliburton and Dresser Industries reach agreement on a stock deal valued at $7.7 billion. Halliburton Chairman Dick Cheney will serve as the new CEO. $ The French government and its oil industry leaders push hard for an end to trade sanctions against Iraq such that Iraq will be able to import much needed oilfield equipment. (Yes…for some of their joint development projects.) $ Lukoil and Conoco sign a memorandum of understanding to develop oil and gas resources in some of Russia’s northern territories. The total economic benefit of the project could reach $25 billion. $ Shell moves into the direct energy marketing business with the establishment of a new firm to sell electricity and natural gas directly to homes and business. Shell is also reportedly developing a strategy for entering the power generation business through its Tejas Gas affiliate. (We know of one business model that they hopefully will avoid.)
Light sweet crude oil - $14.21/bbl; Natural gas - $2.15/MMBTU; U.S. active rig count – 942
The Rest of the Yarn
Continuing with last month’s look at Saddam Hussein’s impact on the global petroleum industry, this month we watch as he bursts (an appropriate implied metaphor in this case) onto the international political stage.
In foreign affairs, Hussein at first helped Iraq play a leading role in the Middle East. In 1975 he negotiated a settlement with Iran that contained Iraqi concessions on border demarcation. In return, Iran agreed to stop supporting opposition Kurds in Iraq. Hussein also led Arab opposition to the 1979 Camp David Accords between Egypt and Israel. President al-Bakr gradually withdrew from politics during the 1970’s and formally retired in 1979. Hussein became chairman of the Revolutionary Command Council and president of the country. In 1979 Iran’s government was overthrown by Islamic fundamentalists and their supporters, and Hussein feared radical Islamic ideas were spreading inside Iraq, especially among the country’s majority Shia Muslim population. In September 1980 Hussein abandoned his 1975 agreement with Iran and invaded. After making some initial gains Iraq’s troops were stopped, and by 1982 Iraq was looking for ways to end the war. Hussein reached out to other Arab governments for financial and diplomatic support and began to target the Iranian oil industry. The Iranians, hoping to bring down Hussein, refused a cease-fire until 1988.
The Iran-Iraq War left Iraq devastated with hundreds of thousands of casualties and a debt of about $75 billion. Still, Hussein had an experienced and well-equipped army, which he used to influence regional affairs, for example, by pressuring Kuwait to forgive its share of Iraq’s debt. In August 1990 Hussein sent troops into Kuwait and annexed it. An international coalition led by the United States evicted Iraq in January and February of 1991 in a conflict known as the Persian Gulf War. Though briefer than the Iran-Iraq War, it was equally devastating, leaving Iraq isolated and reeling from international economic sanctions.
Next month, Hussein’s implosion begins.
Where and when was the first DOE-sponsored Massive Hydraulic Fracturing (MHF) treatment performed?
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 card to a nice restaurant.
Answer to February’s Quiz
For the better part of 25 years, Post, Texas boasted of having 6 synchronized rod pumping units working off of two closely-spaced wellheads.
Answer to January’s Quiz
The famous Houston wildcatter who passed away in 2004 and was a major player in the early years of exploratory drilling on Alaska’s Kenai Peninsula was Michael Halbouty.
Congratulations to January’s winner – Andronikos Demarchos with Hess