Majors

Beneath the hefty first quarter earnings’ figures for oil and gas companies, a more compelling tale is unfolding as both majors and independents operating in North America appear to be benefiting from the move to the drill bit. Production numbers so far are mixed, but some indicate that gas production is up significantly — with some companies predicting the best is yet to come.

High commodity price have sent profits soaring for both major producers and independents. Number one major Exxon Mobil Corp. reported nearly double the profits from a year ago, and fourth-ranked Conoco Inc. also jumped. Independents EOG Resources Inc. and Houston Exploration Co., meanwhile, attributed record earnings to not only prices, but robust domestic gas production.

BP Amoco, the last of the big three majors in the oil and gasindustry to report second quarter earnings, last week revealed thatlike those that have already made their earnings public, theLondon-based giant had record results, posting a 164% increase tothe bottom line.

BP Amoco, the last of the big three majors in the oil and gasindustry to report second quarter earnings, yesterday revealed thatlike those that have already made their earnings public, theLondon-based giant had record results, posting a 164% increase tothe bottom line.

They might both be majors, but Chevron U.S.A. Production Co. andShell Exploration & Production Co. still think it’s wise to notgo it alone in the deep waters of the Gulf of Mexico. The companieshave agreed to share drilling rigs and jointly drill twoexploratory wells there this year.

Much like the rest of the majors, Phillips Petroleum is back ontrack in terms of strong financial results with $221 million in netincome in the third quarter, up from $46 million for the sameperiod last year. But CEO Jim Mulva said the sale of its midstreamGPM business, and possible “joint venturing” of its chemicals,refining and marketing operations are still on. The GPM sale isexpected to take place before the end of the year.

Both independent and major producers fear that FERC’s proposedrulemaking on the Outer Continental Shelf (OCS), which seeks toextend regulation to virtually all offshore gas pipelines under thelighter handed Outer Continental Shelf Lands Act (OCSLA), is thefirst step in a Commission plan to eventually abandon its NaturalGas Act regulation in the offshore.

Both independent and major producers are concerned that FERC’sproposed rulemaking on the Outer Continental Shelf (OCS), whichseeks to extend to virtually all OCS gas pipelines some form oflighter handed regulation, is the first step in a Commission planto entirely abandon its Natural Gas Act (NGA) regulation ofoffshore jurisdictional pipelines.

Following in the footsteps of gas pipelines, major producershave asked the federal government to reject an independentproducer-backed petition that seeks to have tariffs imposed oncrude oil imports from four foreign countries accused of illegaldumping.