Findings

Drawing on findings from a benchmarking study of the largest U.S.- and Europe-based oil and natural gas companies, a study by UK-based consultant Wood Mackenzie has found that development expenditures for upstream projects reached record levels over a five-year period ending in 2003 at $49.5 billion compared with $34.6 billion in 1998.

Drawing on findings from a benchmarking study of the largest U.S.- and Europe-based oil and natural gas companies, a study by UK-based consultant Wood Mackenzie has found that development expenditures for upstream projects reached record levels over a five-year period ending in 2003 at $49.5 billion compared with $34.6 billion in 1998.

In a small bit of irony last December when Enron Corp. had filed for bankruptcy, American Electric Power’s Eric van der Walde, the executive vice president of trading and marketing, said the wholesale energy marketplace was “bigger and stronger than any one company” and other leading wholesale energy providers would weather the storm and fill “any market needs that may arise.” That was then, this is now. Few market observers are so confident today.

A Washington D.C. attorney for El Paso Merchant Energy Co. accused Southern California Edison of “cherry-picking” historical gas price data and comparing it to more recent prices for natural gas sold in California in an effort to prove that the merchant power generator illegally manipulated prices in the state during 2000.

Despite FERC findings to the contrary, California Gov. GrayDavis and top officials at the state’s investor-owned utilities(IOUs) are far from convinced that out-of-state electricitysuppliers didn’t act illegally this summer, causing the huge run-upin power prices in the wholesale market.

Cambridge Energy Research Associates (CERA) released findingsyesterday that North American gas production capacity will weakenthis year – possibly by as much as 500 MMcf/d – due to cutbacks indrilling and exploration brought about by low oil prices.