Soviet Premier Brezhnev’s energy message to the Communist Party Congress is to continue producing oil from western Siberia primarily for export and for the Russians themselves to expand coal, gas, and nuclear energy production for domestic consumption. $ Occidental Chief Armand Hammer reports that the U.S. could help Mexico double its oil production in 3-5 years and hike exports to the U.S. from 700,000 BOPD to 2 million BOPD, thus leading to a dramatic shift in U.S. dependence on Middle East sources. $ St. Thomas Island’s fragile economy appears to be on the bubble, as Amerada Hess threatens to shut down its St. Croix refinery, the world’s largest, if St. Thomas does not back down from its proposed tax levies. $ A number of major operators launch efforts to diversify into minerals, namely Standard Oil of Ohio’s bid for Kennecott Copper and Standard Oil of California’s bid for Amax Mining.
U.S. active rig count – 3,563
A joint venture between the Soviets and Halliburton Geophysical reportedly plans extensive seismic surveys in Soviet offshore frontiers. $ ARCO gives the green light to develop the Point McIntyre field—at an estimated 300 million bbl the biggest U.S. discovery in almost a decade—on Alaska’s North Slope. $ Exxon is reportedly balking at Alaska’s $1.2 billion proposal to settle its lawsuit related to the Exxon Valdez oil spill and its counteroffer was dismissed. $ Ali al-Qabindi, coordinator of Kuwait’s well fire containment campaign, claims that it will take 5 years to complete the reconstruction of Kuwait’s oil industry. $ The Port of Corpus Christi begins measuring support among companies shipping oil across Corpus Christi Bay for the Gulf of Mexico’s first inshore deepwater oil port.
Light sweet crude oil - $19.83/bbl; U.S. active rig count – 949
The Canadian oil sands boom continues apace, as Husky Energy and Imperial Oil both report plans to invest $1 billion+ to expand their oil sands operations. $ The Polar Lights project in Russia, a joint venture of Conoco and Russian partners Arkhangelskgeoldobycha and Rosneft and the first Russian-American JV company to develop an oil field in Russia, reports passing the 75 million bbl production mark in its harsh arctic tundra environment 1,000 miles northeast of Moscow. $ A natural gas leak from an underground salt storage unit that erupted in Hutchinson, Kansas killing two residents remains a mystery and continues to haunt local residents. $ The Bush administration reports the need to develop more refining capacity to prevent future product shortages. In support of this proposal, they mentioned that there had been no new refineries built in the U.S. in 25 years.
Light sweet crude oil - $27.06/bbl; Natural gas - $5.01/MMBTU
The Rest of the Yarn
This month we continue our look-back at the life and times of Sid Richardson, one of the “Big Four” oilmen who laid the foundations of a flamboyant lifestyle that would come to define the image of Texas Oil.
Much of what is known about Richardson’s early years comes from stories Richardson himself told to friends, family, and rarely a reporter, but any listener knew to take them with a grain of salt. He came from humble beginnings, that much is sure. Born in 1891, his mother named him Sid Williams after an itinerate evangelist. As was Clint Murchison, Richardson was born in Athens, Texas, one of seven children; three of his siblings died before the age of seven. He grew up living behind the family’s business…a saloon. In later years Richardson joked that his family was so poor that he sometimes slept on the pool table. Friends joked that Richardson, a heavy drinker in his youth, had probably passed out there.
Family stories suggest that Richardson, unlike his close friend Clint Murchison, was not exactly a go-getter early-on. He was fired from an after-school job at a cotton press for laziness. As a youth he had a reputation for not paying his debts, and his father tried numerous ways to straighten him out. At the age of eight, Richardson’s father gave him a small downtown lot to teach him about business. Shortly thereafter, his father offered to take back the lot in return for a bull. Sid took the bull—only to realize that he then owned a large male cow with nowhere to put it and no female cows with which to breed. When he was eleven, his father suggested it was time for him to own a horse. Upon asking when his dad would give him the horse, he was told that he would have to buy it from him. So, Sid worked all summer crating peaches to raise the money, only to discover after he bought the horse from his dad that the horse was blind. Upon accusing his dad of cheating him, he was told to let the buyer beware. He often commented about how his dad taught him some hard lessons about trading, but in the process, he made him a trader for life.
Richardson’s career would be marked by an ability to befriend those who could help him most, and one suspects that sixteen-year-old Sid’s interest in eleven-year-old Clint Murchison was his father’s money. The elder Murchison, in fact, later lent Richardson several thousand dollars to buy cattle. Taking Clint under his arm wasn’t just an amiable deed. It proved to be smart business. During his senior year in high school in 1909, Richardson claimed to have made thirty-five hundred dollars in profits.
Next month, Richardson drinks his way through college, get’s his introduction to the oil patch, and a buggy accident almost cost’s him a leg. (Article excerpted from “The Big Rich.”)
What German immigrant funded the building of the first commercial American-built diesel engine?
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
When Standard Oil was dissolved, it was done on a state-by-state basis. The merger of the original companies Standard Oil of New York and Standard Oil of New Jersey has ultimately resulted in present day operator ExxonMobil.
Answer to January’s Quiz
In 1999 there were 26 rigs working in the deepwater (1,000 ft or more water depth) Gulf of Mexico. That number climbed to a record-setting 40 in the year 2000. At the close of the year 2000, there were 7 rigs working in the 5,000 ft or greater ultradeep water depths.
Congratulations to January’s winner – Erica Frederick with Southwestern Energy