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GULF COAST UPDATE Catch That Shooting Star by Greg Trauthwein, editorial director While predictions of the offshore boom's sooner-than-expected demise are still a bit premature, there have been several signs recently that indicate caution and diversification could be the keys to help builders and suppliers weath- er any potential shock. At best, the market's signals have been mixed. While there is mounting evidence that the contin- uing Asian financial crisis and a warmer-than-normal winter have and will continue to cut oil demand, oil and offshore service companies alike have routinely touted record revenue and earn- ings numbers, and continue to pro- ject strong rig usage rates. A Numbers Game In releasing its most recent report, the International Energy Agency (IEA) did little to instill confidence in a sustained market boom. Essentially, the IEA noted that oil stocks are going up, while supply is not surging as far ahead as planned. Specifically, stocks held in industrialized nations fin- ished the end of last year at the highest level in two decades, bar- ring 1994. OECD industry stocks during the fourth quarter rose 160,000 bpd to 2,523 million barrels or 112 million barrels more than at end-1996. IEA also maintained that the world markets will be oversupplied in the near-term, even after the agency cut oil supply forecasts by nearly one-third. IEA's report said non-OPEC supply would probably exceed demand for at least the first half of 1998, putting additional pressure on crude prices, which have already lost about 30 percent since last November. Through all the smoke, world oil demand is still projected to rise 2.3 percent this year to 75.34 million bpd, a slower growth rate than 1997's 2.7 percent. There's Hope Yet Despite the doom forecast by falling per barrel prices, offshore service companies have yet to pull the plug on a tremendous run, a boom market which has seen many companies double revenues from the previous year. A good example is Transocean Offshore Inc., which reportedly expects to see continued upward pressure on drilling rig rates as a result of increased spending for off- shore oil and gas exploration and production. According to Transocean officials, rates for the company's 19 semi-submersible rigs and drillships rose 31 percent to an average $106,000/day, and contracts are getting longer, as oil companies seek to secure drilling rigs — rigs which have been noto- riously scarce of late. Another major player, Friede Goldman, expanded its horizons and business base with the pur- chase of France Marine S.A., as well as its subsidiaries Brissonneau & Lotz Marine, BLM Offshore, BOPP and Kerdranvat, which are designers and manufac- turers of marine and offshore equipment. The acquisition will allow Friede Goldman companies to offer services in all phases of off- shore rig construction — from design and engineering to manu- facturing and equipment sales. "This move carefully positions us for profitable growth in the world- wide offshore oil and gas markets," said J.L. Holloway, chairman and CEO of Friede Goldman. 1 iL.: iolid H^dmad 23731 Madison Street Torrance, CA 90505 900 8 1/2" Sterling Silver $45 10kt Gold $235 14kt Gold $295 18kt Gold $355 1000 8 1/2" Sterling Silver $60 10kt Gold $350 14kt Gold $490 18kt Gold $595 1100 8 1/2" Sterling Silver $195 10 kt Gold $899 14kt Gold $1225 18kt Gold $1475 2100 8 1/2" Sterling Silver $215 10kt Gold $1205 14kt Gold $1685 18kt Gold $2195 Each Chain is Handmade Link by Link. Any Length Size Available. All Anchor Chains Available in Lobster, Shackle & Pin, Hidden or Brummel Clasps. 3100 8 1/2" Sterling Silver $271 10kt Gold $1728 14kt Gold $2448 18kt Gold $2975 4100 8 1/2" Sterling Silver $356 10kt Gold $2641 14kt Gold $3697 18kt Gold $4435 3100HC 8 1/2" Sterling Silver $285 10 kt Gold $1820 14kt Gold $2560 18kt Gold $3325 Cr VI V Jj (\ 2100 >1 .0 X 3100HC For a Free Catalogue or to Place an Order, Please Call Tel: 1-800-368-5595 Fax: 310-791-5102 Circle 332 on Reader Service Card March, 1998 25
