Targets

Echoing the concerns cited by Duke Energy earlier, scores of West Coast energy suppliers dispute FERC staff’s view that the California market monitoring rules provide the legal backing for the Commission to issue show-cause orders against them and other sellers, threatening the loss of market-based rate authority and/or alleged ill-gotten profits.

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.

Canadian Natural Resources expects to drill between 500 and 600 gas wells per year for the next several years, growing North American production by 5% annually after 2003, President John G. Langillegas told analysts Tuesday at the East Coast Canadian Energy Conference sponsored by FirstEnergy Capital Corp.

Canadian Natural Resources expects to drill between 500 and 600 gas wells per year for the next several years, growing North American production by 5% annually after 2003, President John G. Langillegas told analysts Tuesday at the East Coast Canadian Energy Conference sponsored by FirstEnergy Capital Corp.

In yet another week’s worth of twists and turns for California’s power markets, a California state senator last week said that he is proposing legislation that would eliminate the California Independent System Operator (CAISO) and return management of the grid to the state’s three major private sector utilities to oversee their own control areas.

The energy industry’s two major trading exchanges took a few more shots at each other last week but this time they were outside the courthouse. IntercontinentalExchange (ICE), the industry’s main over-the-counter bilateral commodity trading platform, received regulatory approval to allow Nymex floor traders and locals to trade OTC products on its system. Meanwhile, Nymex launched its new electronic futures trading platform with 34 energy futures derivatives for trading among multiple parties.

A dwindling number of attractive drilling targets in the United States and a tough financial environment were the leading reasons exploration and production (E&P) companies said they planned to spend less next year in the United States, according to an annual survey by Lehman Brothers.

Last week was an active one for the Federal Energy Regulatory Commission. The staff heading up the agency’s three-month probe into price-manipulation activities widened its inquiry to include questionable “wash” trading transactions, targeting natural gas and power suppliers in Texas and western energy markets. At the same time, it was inundated with energy suppliers’ almost-blanket denials that they used apparently deceptive Enron-style trading practices in California and other western markets during the critical 2000-2001 period.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.