National Geographic Society claims that over the last 40 to 50 years the earth has been getting warmer, thus bringing about a decline in heating oil demand. (I thought Al Gore was the first to report this phenomenon.) $ Meanwhile, TV is being blamed for everything but global warming. It takes the rap for the breakdown of the educational system, the rise of juvenile delinquency, and the decline of home cooking. (Don’t tell S. Smith Sr. this. He thought Howdy Doody was pretty educational.) $ Which reservoirs were hot exploration prospects in East Texas in 1958….Cotton Valley, Bossier, Travis Peak? Would you believe salt dome oil production? $ Who is the newest player in the Persian Gulf? Would you believe the Japanese? The Japanese firm, Arabian Oil Co., secures a concession off the “Neutral Zone”.
East Texas crude oil - $3.25/bbl; U.S. active rig count – 1,813
Mobil Oil is reportedly taking “one last look” in the Georges Bank area of the North Atlantic off the U.S. east coast. $ Meanwhile, Shell Offshore Inc. reports plans to drill a world water depth record well in 6,800 ft of water in the Baltimore Canyon area. $ China reports first quarter oil production of 2,094,000 BOPD, which is well above plan. $ Operators must be getting desperate, as exploratory wells are reportedly being drilled in New York State, North Carolina, Nevada, and Alabama. $ The Soviets order $120 million worth of pipeline equipment in support of their 2,760 mile gas export line connecting the Siberian Urengoi field with western Europe.
U.S. active rig count – 1,933
Iran and Russia express strong opposition to Azerbaijan’s unilateral exploitation partnership with the U.S. in the oil-rich Caspian Sea area. $ Meanwhile, Russia manages to bottleneck Kazakhstan’s access to foreign markets. $ Interesting contrasts in annual meetings….Texaco continues to be rebuffed over internal discriminatory practices, its environmental record in Ecuador, and human rights issues in Myanmar. Mobil, on the other hand, announces that it has essentially reached it 1998 corporate goals 2 years earlier than expected. Royal Dutch Shell too comes under fire regarding its environmental and human rights policies.$ Refining/marketing operations mergers appear to be gaining momentum. First, its Marathon and Ashland, and now Mobil and Amoco are reportedly discussing such a merger.
Light sweet crude oil - $21.51/bbl; Natural gas - $2.23/MMBTU; U.S. active rig count – 917
The Rest of the Yarn
This is the third in a series of articles profiling international public figures that have significantly impacted the petroleum industry in the 20th and 21st centuries. This month we examine Ahmed Zaki Yamani’s roles and personal lifestyle during the volatile 70’s and 80’s.
In March 1975 Yamani witnessed the assassination of King Faisel, his mentor and friend, at the hands of the king’s nephew. In December 1975 he was taken hostage by pro-Palestinian terrorists, along with several other OPEC ministers, during a conference at OPEC’s Vienna headquarters. They were released unharmed after two days of confinement. Despite these incidents, Yamani claimed to remain unaffected by politics.
In the mid-1970’s Yamani chaired OPEC’s Long-Term Strategy Committee in its attempts to devise a unified policy to support oil prices and stabilize international markets. This proved to be a difficult task. In the 1980’s world demand began to fall and production contracted. The petroleum market remained volatile, subject to the influence of a variety of political and economic factors. Between 1980 and 1984 the Saudi share of oil production among non-Communist nations dropped substantially, and Yamani was criticized at home for not fighting for unrestrained production before other OPEC countries were able to increase their market share.
In 1985 Saudi oil production plummeted to 2,000,000 BOPD, its lowest level in 20 years. Yamani responded with a policy of unrestrained OPEC oil production, which caused a rapid drop in oil prices and a budget crisis at home. On October 29, 1986, the Saudi government dismissed Yamani from all his positions with no explanation, replacing him with Hisham Nazer. Yamani heard the news on the radio.
On the personal side, Yamani had eight children from three marriages. He was a devout Muslim and spent his spare time composing poetry in Arabic. He had been rewarded with gifts of land by King Faisel and owned homes in Switzerland, England, and Saudi Arabia. He dressed in expensive Western suits, was driven to meetings in Rolls Royce limousines, and made frequent trips to Europe to shop for jewelry and clothes. Not only was he a salaried minister of the Kingdom, but his law firm also did work for many Saudi government agencies.
In 1988 Yamani made an aborted attempt to take over Vacheron Constantin, a prestigious maker of luxury watches. In 1989 he formed the Centre for Global Energy Studies in London, a forum for OPEC oil ministers, oil company leaders, and representatives of governments and consumers. In the 1990’s he continued to be a respected commentator and consultant on global oil prices.
While Americans lay hold to the claim that Colonel Edwin Drake is the father of the oil industry, circa 1859 in Titusville, Pennsylvania, many Canadians claim their own father of the oil industry a year prior to Drake’s discovery. Who do the Canadians claim as the true father of the oil industry, circa 1858, and where was his strike?
If you would like to participate in this month’s quiz, e-mail your answer to firstname.lastname@example.org by noon, May 15. The winner, who will be chosen randomly from all correct answers, will receive a $50 gift certificate to a nice restaurant.
Answer to Aprils’s Quiz
The discovery well drilled in 1905 near the small village of Tulsa, Indian Territory that spawned a state, several major oil companies, and made Tulsa the oil capital of the world was the No. 1 Ida E. Glenn.
Answer to March’s Quiz
First brought on production in 1892, by the mid-1950’s the Los Angeles City field had cummed more than 20 million barrels of oil from wells located in front yards, back yards, vacant lots, and urban parks of Los Angeles.
Congratulations to March’s winner – Darrell Knight with Goodrich Petroleum