Exxon Corp News

Here is a multiple choice question:  which of the following contracts is considered to be a “maritime contract” under U.S. law? You will be forgiven if you simply tried to apply logic in answering this question and guessed that all four are maritime contracts. If you know your maritime law, however, then you should have answered that “c” and “d” are maritime contracts whereas “a” and “b” are not. Or, at least, that is the current state of the law. Why might this matter? In the first place…

Petrobras reportedly signed an exploration and development contract worth up to $1 billion with U.S.-based Exxon Corp. and Kerr-McGee Corp.

The European Union reportedly launched a full-scale probe into the proposed $87 billion merger of Exxon Corp. and Mobil Corp., citing a wide range of concerns about competition in the 15-nation EU.

Marine Drilling Cos. Inc. announced it tendered its Marine 700 semi-submersible drilling rig to Esso Exploration Inc. for acceptance under their five-year contract, but Esso rejected it in the belief the unit was not ready. Marine Drilling and Esso, a unit of Exxon Corp., are currently holding discussions in an attempt to resolve issues associated with these recent developments. Marine Drilling believed it would meet its July 15 contract deadline. Marine 700 has been under construction at the Ham Marine shipyard in Pascagoula, Miss. It was scheduled to work for Esso in the western Gulf of Mexico under a five-year contract at a daily rental rate of $165,410, plus adjustments.

According to the U.S. Department of the Interior's Minerals Management Service (MMS), deepwater drilling (1,000 ft. and deeper) shows the greatest potential of development, and certainly has garnered the attention (as well as the E&P dollars) of offshore oil production industry leaders. By yearend 2003, the MMS estimates as much as 63 percent of the oil production and 29 percent of the daily gas production will come from deepwater reserves. In August of 1998 there were 30 (temporary and permanent) deepwater rigs drilling simultaneously in the Gulf of Mexico's Outer Continental Shelf (OCS), at depths greater than this. The proliferation of deepwater development projects will likely continue to grow…

Giant oil companies are going to be the sole survivors in an increasingly competitive market, the chairman of Atlantic Richfield told stockholders Aug. 30 as they approved a takeover bid. Shareholders of Los Angeles-based ARCO, the seventh- largest U.S. oil company, agreed to a sale of the company to BP Amoco Plc, in a $29 billion stock swap that creates the largest private-sector oil producer in the world. Chairman and Chief Executive Mike Bowlin told a crowd of more than 400 shareholders, mostly retirees of ARCO, that tighter competition and volatile industry conditions spurred the proposed sale. "Two events in 1998 caused the board to reevaluate the future of the company and that was the consolidation of the market and crude oil prices at their lowest levels in...years," he said.

Exxon Corp. and Mobil Corp. have moved to address European Commission concerns about their merger in the natural gas sector in Germany and over an existing European joint venture between Mobil and BP Amoco Plc, a Commission spokesman said. The Commission was also no longer concerned that the $80 billion merger and a rival deal between BP Amoco and Atlantic Richfield would result in excessive consolidation in oil exploration, the spokesman added, paving the way for regulatory approval in the European Union. The news that the Commission has dropped fears the two oil mergers could significantly reduce competition in the upstream sector…

Chevron Corp. has announced its intention to buy the second largest oil exporter in Argentina to boost its exploration and production overseas. The companies did not disclose financial details of the deal, but industry sources had valued the privately-held Petrolera Argentina San Jorge at some $1 billion. "This transaction will have an immediate positive impact on earnings and cash flow," Dick Matzke, president of Chevron Overseas Petroleum Inc., said. The venture is Chevron's first exploration and production deal in Argentina. Privately held San Jorge produces about 78,000 bpd of oil and 40 million cubic feet of natural gas, Chevron officials said.

The European Commission is expected to launch a full-scale probe into the proposed merger of Exxon Corp. and Mobil Corp.

Marine Drilling: Confident It Can Deliver On Time Marine Drilling believes it will meet the July 15 contract deadline for the Marine 700 drilling rig but said that there is a risk it will fail. The readiness of the rig has reportedly been questioned by the contractor, Exxon Corp.’s Esso Exploration Inc. unit.

The European Commission's (EC) competition department will reportedly launch an in-depth probe into the proposed $87 billion merger of U.S. oil majors Exxon Corp. and Mobil Corp. later this month.