Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.energy From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: energy Tue, May 19 1992 Date: Tue, 19 May 92 05:21:11 EDT Message-ID: 05-19 0000 DECISIONLINE: Energy USA TODAY Update May 19, 1992 Source: USA TODAY:Gannett National Information Network CHEVRON INKS EXPLORATION DEAL: Chevron and the republic of Kazakhstan Monday signed an agreement to develop the Tengiz oil field on the Caspian Sea. It is the biggest, most-anticipated deal for a U.S. company in the former Soviet Union. The Tengiz field has reserves of 25 billion barrels of oil - 2 1:2 times the reserves of Alaska's Prudhoe Bay. (For more, see special Tengiz package below.) MARKET AWAITING WORD FROM OPEC: Speculation that OPEC might decide this week to increase production sent oil prices lower Monday. Light sweet crude oil for June delivery fell 17 cents to settle at $20.52 per barrel at the New York Mercantile Exchange. The Organization of Petroleum Exporting Countries meets Thursday to set summer output quotas, and there has been talk Saudi Arabia will push for a higher ceiling. REFINED PRODUCTS SLIP: Refined petroleum products prices declined Monday at the Mercantile Exchange. Unleaded gasoline for delivery in June settled at 62.97 cents a gallon, down .71 cent. Home heating oil for delivery in June settled at 57.11 cents a gallon, down .07 cent. Natural gas prices were mostly higher, with contracts for delivery in June settling at $1.678 per 1,000 cubic feet, up 2.1 cents. TEXACO HAS TO PAY $21.5M AWARD: The U.S. Supreme Court Monday left intact a $21.5 million award against Texaco Inc. won by Diane Mason, of Wichita, Kan., whose husband died of leukemia. Otis Mason worked with engine oils and benzene, a carcinogen. A year before he died, Mason sued Texaco and others, saying they didn't provide adequate risk warnings. CLINTON WOULD UP MPG STANDARD: President Bush opposes increased fuel-economy standards, but auto industry officials are worried about what might happen if Bush is voted out of the White House. Arkansas Gov. Bill Clinton, the Democratic front runner, has proposed fuel-economy increases to 40 mpg by the year 2000 and 45 mpg by 2020. However, Clinton has offered no specifics. The current standard for cars is 27.5 mpg. WASTE OIL RULES REMAIN THE SAME: Companies who handle used motor oil received a break recently when the Environmental Protection Agency decided not to tighten rules for disposal of waste oil. In deciding not to classify used oil as a hazardous waste, EPA in effect maintains the current system for facilities that collect used oil. EPA Chief William Reilly says the waste oil is already regulated under other laws. UTILITY WANTS RATE HIKE: Penn Fuel Gas Inc. is seeking a $6.6 million rate hike by July 11 for over 26,000 of its customers, the Pennsylvania Public Utilities Commission says. The company says it needs the hike to offset rising operating costs. The average annual heating bill in Berks County would rise to $930 from $583 if the hike is approved. In Luzerne County, average annual bill would go to $715 from $573. GROUPS PROTEST LEGISLATION: Environmental, energy and consumer groups Monday called upon co-sponsors of legislation that would end the two-step process for licensing nuclear power plants to abandon the measure. The Nuclear Reactor Licensing Act would repeal a section of the Atomic Energy Act which allows for public hearing on significant new safety issues once a nuclear power plant has been built. OIL STOCKS CLIMB: Shares of Royal Dutch Shell jumped 1 5:8 to $84 1:4 Monday after brokerage C.J. Lawrence raised its estimates for the oil company's 1992 earnings. Other oil stocks also gained. Amerada Hess rose 1 7:8 to $43 1:8, Chevron added 2 to $68 5:8, Texaco gained 1 1:8 to $62 7:8, and British Petroleum rose 1 5:8 to $58 1:4. SPECIAL PACKAGE ON TENGIZ: THREE YEARS OF TALKS END: Chevron has been negotiating the deal to develop the Tengiz field in for more than three years, first with central Soviet planners and later with Kazakhstan. Chevron Chairman Kenneth Derr and Kazakhstan President Nursultan Nazerbayev signed the documents. Some analysts say Tengiz could add 15% to 20% to Chevron's annual revenue once the project is running full-tilt a decade from now. REPUBLICS NEED HELP WITH OIL: The ex-Soviets need U.S. oil production technology. The oil industry in the republics has been crumbling. The Soviet Union once produced 12 million barrels of oil a day. Now the republics are producing about half that, because of failing equipment and inept management. Nearly every major U.S. oil company is either operating or negotiating a joint venture in the former Soviet Union. $20B TO BE SPENT ON PROJECT: At the signing ceremonies in Washington, Chevron's Derr said peak oil production of the Tengiz venture, dubbed Tengizchevroil, could hit 700,000 barrels a day by 2010. The joint venture will spend $1.5 billion over the next three years and $20 billion over the life of the project to drill about 540 wells and build roads, schools and hospitals to service the area. ANALYSTS CAUTIOUS ABOUT DEAL: Chevron will get 20% of net income from the field. Kazakhstan gets the other 80%. Analysts are still cautious about the deal. "Signing the deal is just the beginning," says Jack Aydin, oil analyst at McDonald & Co. "Dealing with the (former) Soviets is going to be difficult. It's good news, but I wouldn't look for anything meaningful to happen for two or three years." (End of package.) Energy Editor: William Snoddy. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM