The House of Representatives last week approved legislation toestablish a multi-million federal loan-guarantee program to helpindependent oil and natural gas producers recover from the effectsof depressed crude oil prices. The measure, which was approved bythe Senate in June, is now headed to President Clinton for hissignature.

The bill will set aside $500 million for emergency loans tosmall producers and service companies, which will be able to borrowup to $10 million each until the funds for the program run out. Thelegislation will provide a government-backed repayment guaranteefor 85% of each loan, which means that commercial lenders would beable to offer more lenient terms than they would otherwise.

Commerce Department Secretary William M. Daley, Securities andExchange Commission Chairman Arthur Levitt and Federal ReserveBoard Chairman Alan Greenspan will serve on the board overseeingthe loan program. Greenspan will be chairman.

“These loan guarantees will help us recover from the severedamage we have sustained by making alternative capital sourcesavailable to some producers and service companies,” said GeorgeYates, chairman of the Independent Petroleum Association of America(IPAA). The group urged Clinton to give his prompt attention to thebill so the program can be immediately implemented.

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