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Offshore Market Projections center on When, not If As the per barrel price of oil continued to soar through new stratospheres, offshore oil drilling companies and key marine industry suppliers alike wonder when the next offshore boom will ignite. The cyclical nature of the offshore exploration and production beast is leg- endary in financial circles, riding boom and bust waves for years at a time. While industry analysts and insiders alike had forecast a pick-up in activity no sooner than mid-year 2000. the col- lective industry is "itching" to get back to the business of building, repairing and supplying the myriad of rigs, boats and otherjausiness opportunities that abound and recover resources in deeper waters more efficiently seemingly made the industry bulletproof. Enter OPEC. At a meeting in Jakarta, Indonesia in November 1997, OPEC leaders decided to raise production quotas in an effort to cash in on the high-flying market. While this action alone cannot be blamed for the staggering collapse of oil pricing in 1998 and 1999, it — cora- lous financial crisis and tion lost during the low cost period. Exploration for oil outside of OPEC picked up in the late 1970s in order to counter dependence on the cartel's oil following oil price shocks in 1973 and 1979. Currently, the world depends on this group's production to meet about two-thirds of the current 75 million bpd of crude oil demand. Although oil demand growing and crude oil prices have topped $33 a bar- rel, analysts say upstream spending sti natural that sustained high prices would sooner than later drive a resurgence of the moribund offshore business, a host of factors — chief among them the very nature of today's corporate consolidated oil industry and the political powerplays by the OPEC nations — have conspired to delay the inevitable upswing in the Gulf of Mexico. A potential positive can be seen in the Offshore Safety Article, which begins on page 36. In discussing Schlumberger's "safety and training program Bruce Adams, the QHSE manager, admits the high level of hiring in 1Q 2000 has created "high" demand for safety and . . . ""Ww training sessions. "Ghost of Jakarta," industry consolidation, political issues and questionable numbers current drivers in world oil markets Following repeated cries from around the globe, OPEC finally cut daily pro- uctjo^in aft effojJ to prop* the lagging continue to approach upstream spending cautiously, choosing instead to reduce debt, buy back shares, and explore for natural gas." of oil. That action taken last spring fiaH resulted in a more than tripling of the price of oil, which barreled through the $30 level in reccPtmonths. The pro- duction output has effectively squeezed supply worldwide, as demand has increased during the drawdown. ? froja Inter- sex JHHEBKfeound will be delayed a •••JionSr* fPPffWcy (IEAT; "the onger than originally anticiplfra ^"ffilmbers show marjcets^afe tight and i Ahead Respite the logic run resuli The, supply and demand curve will be permanendy skewered by the fact that so few hold such a tight grip on the major- ity of the world's oil supply. It was late in 1997 when the offshore oilfield markets were enjoyini ting tighter." " "ip
