Thursday, August 24 2000

Rig famine in 2001?
Petrodata Research, the forecasting division of OneOffshore Inc., has announced new findings that suggest that high oil prices may have come too late to avert both a failure in non-OPEC oil supply growth and a new rig market shortage in 2001. "High oil prices mean oil companies are awash with cash again and have been so for over a year now,'' said Petrodata analyst Maarten van Mourik at a press reception held at the Offshore Northern Seas Conference in Stavanger, Norway.

"The new cash has not been spent on drilling wells, however, but on defending their balance sheets, buying back shares and competing with high growth technology stocks" In addition to the impact on the oil supply, van Mourik said the spending collapse over the past two years is also affecting the deep-water rig market..

"Poor day rates have made contractors wary of committing to further building of new rigs,'' van Mourik said. "As a result, we predict that the available fleet will be insufficient again shortly to cope with increasing demand and develop the potential of all those deep water fields. The ultra deepwater segment, 5,000 ft water depths and beyond, is the leading indicator here and that segment is already in physical shortage.''

Western Gulf lease sale attracts $154 million in high bids
This week's Federal offshore natural gas and oil lease sale in the Western Gulf of Mexico received $153,660,031 in high bids. The MMS Gulf of Mexico OCS Regional Director, Chris Oynes, characterized it as a "moderately strong sale; the fifth largest Western Gulf Sale in the last 10 years." He noted that the $153.6 million in high bids was also 62 percent higher than the comparable sale last year. The Minerals Management Service (MMS) received 266 bids totaling $167,373,613 at the. The 60 participating companies bid on 226 tracts in the Western Gulf of Mexico, offshore Texas and in deeper waters offshore Louisiana.

MMS officials said 97 tracts receiving bids are in water depths of 200 meters of more. The highest bid on a tract was Garden Banks Block 624 submitted by Kerr-McGee Oil & Gas Corporation and CXY Energy Offshore Inc. for $10,540,800. "The sale was dominated by independent companies with Union Oil of California, Kerr-McGee, Amerada Hess, and CXY Energy posting $63 million of the $153.6 million in high bids," noted Oynes.

Hyundai Heavy Industries creating shipbuilding web
South Korea's Hyundai Heavy Industries is creating a web service that will allow shipowners and naval architects to access and evaluate data on the vast range of components and options involved in shipbuilding. It will also allow customers to ascertain progress reports on their projects.

The Web page will interface with HHI's main computer systems, Hi-CIM APP, a comprehensive suite or applications for heavy industrial design, manufacture and project management.

HHI has selected Persistence PowerTier software to facilitate the rapid deployment of a new Java application that will provide the information services to shipowners. The system has been installed by Infron Technologies, Persistence Software's distributor in Korea.

"PowerTier will be instrumental in upgrading various areas of Hi-CIM APP; particularly those aspects where we want to interface with our web-based information system for customers and associates," said HHI senior manager Kang Min Suk. "Through this new development, we will be able to offer our customers an advanced user-friendly tool to plot the progress of their projects."

Problems at Harland & Wolff
Northern Ireland shipbuilder Harland & Wolff today issued a statement saying "a serious situation has arisen as a direct result of the attitudes and action of Global Marine in refusing payment for work done by Harland & Wolff. " It cites Global Marine's refusal to pay the final £23 million (about $34.5 million) inmstalment on completion of the ultra deepwater drillship Glomar Jack Ryan.

Harland & Wolff says "the absence of money due on completed contracts and the uncertain orderbook situation has placed the very future of the yard at risk."

Harland & Wolff says its management and board are "addressing alternatives in order to create a new opportunity for the company to establish a viable offshore and shipbuilding future," but warns that any proposal will inevitably involve a sbstantial reduction in employees."



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