Cutbacks

Even with some offshore production cutbacks seemingly imminent, cash prices dropped at nearly every point Thursday. Traders cited the previous day’s screen weakness and moderating weather trends either already under way or in the forecast as reasons for the softness. One also noted that Tropical Storm Arlene was expected to have relatively little impact on Gulf Coast supplies.

Calgary-based Nexen Inc. became the latest producer to revise downward its oil and gas reserves, reclassifying 8% of its proved North American reserves last week. The company, which will take a C$175 million (C$1.40/share) writedown in fourth quarter earnings, blamed the revision on a cutback in spending on aging, conventional North American assets.

Calgary-based Nexen Inc. became the latest producer to revise downward its oil and gas reserves, reclassifying 8% of its proved North American reserves this week. The company, which will take a C$175 million (C$1.40/share) writedown in fourth quarter earnings, blamed the revision on a cutback in spending on aging, conventional North American assets.

A 2-3% decline in North American natural gas production may be forcing industrial and utility consumers to reduce gas consumption this year, according to a report by Lehman Brothers.

Royal Dutch/Shell Group’s managing director on Wednesday said the oil major plans to trim between $500 million and $800 million of costs and cut staff 15% over the next four years within its oil and natural gas exploration and production (E&P) business worldwide. Walter van de Vijver also confirmed that Shell has targeted nearly $500 million in assets worldwide this year, including some in the United States and Gulf of Mexico.

Royal Dutch/Shell Group’s managing director on Wednesday said the oil major plans to trim between $500 million and $800 million of costs and cut staff 15% over the next four years within its oil and natural gas exploration and production (E&P) business worldwide. Walter van de Vijver also confirmed that Shell has targeted nearly $500 million in assets worldwide this year, including some in the United States and Gulf of Mexico.

As it had said might be necessary due to processing cutbacks (see Daily GPI, Oct. 29), ANR declared an OFO Monday restricting receipts on its Southeast system to heating value of no more than 1,050 Btus per cubic foot. The OFO becomes effective Nov. 1 until further notice.

Budget cutbacks and consolidation of the natural gas industryhave prompted the Gas Research Institute (GRI) and the Institute ofGas Technology (IGT) to consider the possibility of merging the twoR&D groups.

Budget cutbacks and consolidation within the natural gasindustry have prompted the Gas Research Institute (GRI) and theInstitute of Gas Technology (IGT) to consider the possibility ofmerging the two research and development groups.