The Federal Energy Regulatory Commission’s chief administrativelaw judge spent part of Wednesday in a telephone meeting with thegeneral manager of the nation’s largest municipal utility, tryingto bring successful closure to a two-year-old stalemate centered onCalifornia’s independent electric grid operator (Cal-ISO). Cal-ISOwould only confirm that they are in the midst of “very sensitive”negotiations, and a resolution wasn’t expected any time soon.
Settle
Articles from Settle
Following 24-cent Spike, Bulls Settle for Modest Gain
Still a little hung over from Wednesday’s 24-cent bull-party,natural gas traders elected to cool their heels yesterday, leavingthe market to quietly check to either side of unchanged. The Junecontract finished at $3.71, up 2.1 cents on the day.
Industry Briefs
BP Amoco has become the latest producer to shell out big bucksto settle whistle-blower claims for underpayment of royalties onoil production during the past decade. It has agreed to pay $32million as part of a settlement with the Department of Justice(DOJ), joining the ranks of other oil producers – Mobil Oil ($45million), Oxy USA Inc. ($7.3 million), Chevron ($95 million) andConoco Inc. ($26 million). Two whistle-blowers alleged that BP andAmoco underpaid their royalties prior to their merger. Thecomplaint against BP and Amoco was filed in a federal court inLufkin, TX, where a number of other cases alleging underpayment ofroyalties on natural gas production are pending as well. The DOJalready has intervened in three civil lawsuits accusing affiliatesof ExxonMobil Corp., Shell Oil Co. and Burlington Resources Inc. of”knowingly undervaluing” their royalties on gas, and it hasindicated it is investigating other gas-royalty cases. The twowhistle-blowers who initiated the complaint against BP and Amocounder the False Claims Act will share more than $5.4 million of thesettlement proceeds.
Resistance Withstands Charge, Bulls Settle for 8.6-cent Gain
For the second trading session in a row Monday the Aprilcontract opened at 2.81, but in contrast to the price fallexperienced last Friday, prices spiked higher at the open yesterdayand quickly tested life-of-contract highs. However, severalattempts to punch through the $2.88 level failed and that left themarket with an 8.6 cent advance and a $2.86 closing price.
Parties Settle OFO, Balancing on PG&E
As the first of a two-part move toward an all-party settlementregarding California’s future natural gas restructuring, PacificGas and Electric is expected this week to file with stateregulators a proposed settlement for the tighter management ofsystem imbalances – both their frequency and cost. A proposal,including provisions for using individual operational flow orders(OFOs), will be sent to the California Public Utilities Commissionfor approval Oct. 20, according to sources close to thenegotiations last week.
Senate Bills Could Settle Royalty Dispute, Lessen E&P Tax Burden
Sen. Frank Murkowski (R-AK), chairman of the Senate Committee onEnergy and Natural Resources, consolidated several recentlegislative measures and a few new ones into two separate pieces oflegislation last week that could have a wide ranging impact on theexploration and production sector.
Senate Bill Could Settle Royalty Valuation Dispute
Sens. Mary Landrieu (D-LA) and Don Nickles (R-OK) introducedlegislation last week designed to prevent the Department of theInterior’s Minerals Management Service from altering its oil andgas royalty valuations methodology in a way that could costproducers millions more in royalty payments. The proposedlegislation, titled the “Federal Royalty Certainty Act” (SB 924),is designed to give producers what they have been seeking for sometime: certainty about what they owe the government.
Kern, Shippers Settle Rate Case Before it Begins
In a rare move that eliminates huge legal costs, Kern River GasTransmission has submitted to FERC a negotiated settlementagreement on its rate design prior to the start of a general ratecase (RP99-274). The agreement has the approval of all of itsshippers. Kern’s general rate case was scheduled to begin thismonth.
Move to Upside Breaks Cash Flatness Pattern
Cash prices hinted Thursday that they’re not ready to settleinto the same kind of stagnation period that characterized much ofFebruary’s activity. Riding the momentum of a rising Henry Hubfutures contract, stronger crude oil futures (back over $13/bbl)and snowy weather in various regions, nearly all points roseanywhere from 2 cents to a dime with most increases in the vicinityof a nickel.
Bearish Overtones Send March Futures Down a Nickel
The March futures contract lost 5.3 cents to settle Wednesday at$1.765, thanks to what sources believe was a combination of weaktechnical and fundamental factors. “Today’s drop in the Marchcontract was actually a response to a failure at the 18-day movingaverage for March of $1.824,” one trader said, although otherschimed in many people sold ahead of what they thought would be abearish AGA storage report. Sure enough, the actual report came inat 78 Bcf of withdrawals, which is “significantly” lower than the102 Bcf of gas withdrawn during the same period last year.