January 1 Russia temporarily stops oil flows through the 1.2-million b/d capacity Druzhba pipeline after Ukraine imposes a 13-percent increase in transit tariffs from $4.53 to $5.20 per ton per kilometer. Talks between the two countries are suspended shortly thereafter, and oil shipments to Ukraine's 78,000-barrel per day (b/d) Drogobych refinery are cut. In 1995, Russia shipped about 600,000 b/d through the Druzhba pipeline to Eastern Europe. (DJ)

January 3 Under a new hydrocarbon law which brings the country inline with European Union regulations, Greece opens bidding for six onshore and offshore exploration concessions. Onshore concessions are located in northwest Peloponnese, Aetolo-Archarnania, and Ioannina. Offshore blocks are near Katakolo in the Ionian Sea's northwest Peloponnese, the Patras Gulf, and near Paxi Island. Greece produces about 10,000 b/d from its offshore Prinos field near Thasos Island in the northern Aegean Sea. However, it has not been able to develop other Aegean Sea oil and gas fields because of territorial disputes with Turkey. (FT)

January 9 In Cairo, Israeli Energy Minister Gonen Segev meets with Egyptian Oil Minister Hamdy al-Banbi to discuss possible construction of a $500-million pipeline to carry 250 million cubic feet per day (Mmcf/d) of Egyptian natural gas to Israel, a similar amount to Jordan, and 50 Mmcf/d to the Palestinian-controlled Gaza Strip. In 1995, Egypt augmented its 22-trillion cubic feet (Tcf) of natural gas reserves with new discoveries in the Mediterranean Sea. Amoco and Agip hold the concessions which would supply gas for the Israeli pipeline. (DJ)

January 13 According the Iran's official Islamic Republic News Agency (IRNA), Iran and Nigeria have agreed to cooperate in oil exploration, production, and marketing. The deal comes after oil officials from the two countries met in Lagos. Both Iran and Nigeria have various forms of economic sanctions imposed on them by members of the international community. (DJ)

January 14 Qatar's state news agency announces that Qatari and Dubai officials are discussing the possible construction of a pipeline to carry Qatari natural gas to Dubai's power plants, most of which are gas-fired. In the past, Qatari Energy Minister Sheikh Abdullah bin Hamad al-Attiya has advocated the creation of a GCC gas grid, which would allow regional countries to raise oil exports by substituting domestic consumption of oil with natural gas. (DJ)

January 15 The British Government approves the $2.47-billion Eastern Trough Area Project development. The Eastern Trough is located east of the Shetland Islands and contains an estimated 400 million barrels of oil, 35 million barrels of natural gas liquids, and 1.1 Tcf of natural gas. British Petroleum, Royal Dutch/Shell, Exxon, Agip, BHP, Murphy Oil, and Mitsubishi Oil will be partners in the development. The area is located near the 1-billion barrel Foinaven and Schiehallion heavy oil fields currently under development. (NYT)

January 16 In Peru, state-owned Petroperu workers stage a 24-hour strike to protest the government's privatization plans. While union representatives declare that Petroperu "is totally paralyzed," operations and oil production appear to remain unaffected. Privatization could result in loss of about 1,500 of the company's current 5,500 jobs. Peru produces about 130,000 b/d, most of which is consumed domestically. (DJ)

January 16 South Africa's Central Energy Fund reports that an environmental study designed to assess the impact of storing Iranian oil in South Africa would be delayed by six months until September 1996. In July 1995, South Africa agreed to allow Iran to store up to 15 million barrels at the 45-million barrel Saldanha Bay storage facility near Cape Town. The deal is opposed by the United States and comes after the United States imposed a unilateral embargo on Iranian oil exports in April 1995. (DJ)

January 17 Iraq agrees to talks concerning a U.N. plan to allow for the Iraqi sale of $1 billion of oil for 90 days for a 180-day trial period. Under U.N. Resolution 986, proceeds from the sale would be used for humanitarian purposes. In the past, Iraq has opposed clauses 6 and 8b contained in Resolution 986. Clause 6 stipulates that oil exports under this plan must pass through the 1.6-million b/d Iraq-Turkey pipeline, which currently is unusable because of sludge build-ups and pumping station damage. By most estimates, the line would take a minimum of three months to repair. Clause 8b states that part of the proceeds from the sales would be disbursed under U.N. supervision to Kurdish provinces in northern Iraq. Negotiations between Iraq and the United Nations are scheduled to begin February 6, 1996. (FT, PON, DJ)

January 17 Romanian officials announce that the country's new petroleum law will take effect in March 1996 and will provide a framework for the country's upcoming second exploration licensing round. Romania currently produces 135,000 b/d of oil, with reserves of about 1 billion barrels. Amoco, Shell, and Enterprise Oil actively are exploring in the country. (PON)

January 22 Venezuela starts a bidding round which offers 10 concessions with a resource potential of between 7 and 23 billion barrels of oil and up to 10 Tcf of natural gas reserves. Five blocks are located near the Furrial field in the Orinoco Delta, two in the northern Andes near Lake Maracaibo, two in the eastern Anzoategui and Monagas states, and one in the Barinas region near the Colombian border. The government anticipates that production in these blocks may be able to increase the country's light and medium crude oil production by as much as 1 million b/d by 2003 and bring in tax revenues of between $15 to $20 billion. Over 75 companies, including British Petroleum, Exxon, and Shell, are involved in the auction. Awarded acreage will allow companies to develop the concessions on a profit sharing basis. (FT, PON)

January 23 Bahrain agrees to accept International Court of Justice (ICJ) jurisdiction in a longstanding dispute over the potentially oil-rich Hawar Islands and the Fahst al-Dibal and Jarada sandbars. In May 1993, Bahrain passed a law which decreed its sovereignty over the islands and reefs, some of which are only a mile from Qatar's coast. After Qatar filed a case with the ICJ in February 1994, Bahrain refused to acknowledge the Court's jurisdiction. In February 1995, both sides then requested Saudi mediation outside of the ICJ. Bahrain now states that it will accept the ICJ's jurisdiction if a related dispute over northwestern Qatar's Zubara region is included in the case. The ancestors of Bahrain's ruling family are buried in Zubara. (DJ)

January 26 Colombian rebels dynamite the country's 230,000-b/d Cano Limon-Covenas pipeline. The pipeline is bombed simultaneously in two locations 200 miles apart, resulting in an estimated spill of 10,800 barrels. The line is the primary transport route for crude oil production from the country's prolific Llanos basin fields to the Covenas export terminal on the Caribbean coast. So far, the line has been bombed eight times in 1996, 46 times in 1995, and around 400 times since its inauguration in 1986. In late 1995, the Colombian government released a report stating that oil companies have spent $500 million since 1991 on security measures to protect oil infrastructure from guerilla attacks. (DJ)

January 29 In Nigeria, Shell workers stage strike after the company announces plans to cut 10 percent of its 5,000-person workforce. Initial reports state that oil production remains unaffected. The strike also comes a day after Shell admits to importing weapons for Nigeria's police force. The company says that it provided handguns to police in order to provide adequate protection for its oil facilities. In other developments during the month, the son of Nigerian ruler General Sani Abacha is killed in a plane crash on January 17. The crash is followed several days later by bomb blasts at the Kano airport where Ibrahim Abacha's plane attempted to land. (DJ, WP)

January 30 In Ecuador, employees of state-owned Petroecuador stage a 24-hour solidarity strike to protest the government's intended privatization of the electricity sector. Electricity workers took over the country's seven hydroelectric power plants on January 17. Operations subsequently were cut to a minimum, including those at the Paute plant, which supplies an estimated 75 percent of the country's electricity. President Sixto Duran-Ballen recently declared a state of emergency and sent troops to surround the power stations. (DJ)

January 30 Vice Admiral Scott Redd, commander of the U.S. Fifth Fleet based in the Persian Gulf, states that Iran test-fired a new anti-ship missile near the Strait of Hormuz on January 6. The missile reportedly has a range of 60 miles and is viewed as a threat to regional security by U.S. naval forces operating in the area. Oil tankers carry about 15 million b/d through the Strait. (DJ)

January 30 A Dubai-based oil tanker sinks approximately 1.5 miles off Iran's Lavan Island in the Persian Gulf. The 803-ton ship was en route from Dubai to the Iranian port at Bushehr when it suffered an unspecified "accident" and began taking on water. (DJ)

January 31 In Mexico's southeastern Tabasco region, about 1,000 protestors demand compensation for pollution caused by state-owned Pemex's oil operations. Demonstrators take control of 18 oil drilling rigs and prevent drilling and maintenance activity at 21 other rigs by blocking regional highways. Mexico has an estimated 4,700 oil wells nationwide, and the country's oil production remains unaffected. (NYT)

January 31 In Yemen, France-based Total and U.S.-based Hunt Oil sign a memorandum of participation regarding a recent $3-billion liquefied natural gas (LNG) export deal recently ratified by the Yemeni parliament. In September 1995, Total and Yemen's government agreed to build a 5-million ton per year LNG plant. However, natural gas to supply the LNG plant would come from the Marib concession already awarded to a Hunt Oil-led consortium, which includes Exxon. After months of talks between the various companies, Total and the government agree to give the Hunt consortium a 38 percent stake in the project. (DJ)

February 5 Turkmenistan cuts natural gas shipments to Armenia by 20 percent, to 140 million cubic feet per day. The move comes after Armenia's arrears reach $50 million. Since the 1988 outbreak of hostilities between Armenia and Azerbaijan, Armenia's gas supply has been disrupted frequently. The country currently receives its gas supplies through a Georgian pipeline and from Iran. (DJ)

February 5 Clashes between Nigeria and Cameroon over the disputed Bakassi Peninsula result in two deaths. The Bakassi Peninsula is a 600-square mile region bordering the two countries which contains oil and natural gas reserves. Nigeria claims that an 1858 treaty places the Peninsula in its territory. Cameroon contends that Nigeria offered it the region after Cameroon refused to help Biafran rebels during Nigeria's 1967 civil war. More recently, Nigeria has accused Cameroon of siphoning off 130,000 barrels per day (b/d) of oil from the producing fields in the region. The International Court of Justice in the Hague is currently reviewing the case. (DJ)

February 9 Ecuador's state-owned Petroecuador announces that it will offer nine exploration blocks in the country's eastern Amazon basin region called the Oriente. Despite transportation problems and environmental concerns, the Oriente region has been a focus of Ecuador's last two bidding rounds for exploration acreage. Petroecuador believes the region could hold between 100 million to 1 billion barrels of additional oil reserves, which could yield new production of at least 100,000 b/d between 2002 and 2004, depending on development timetables. (DJ)

February 10 Mexico's state-owned Petroleos Mexicanos (Pemex) announces that protests led by the leftist Democratic Revolutionary Party in the Tabasco region have shut-in 28,000 b/d of oil production, resulting in cumulative losses of $8.5 million during the past 13 days. Demonstrations have occurred at 61 sites in the Tabasco region, which accounts for about one-quarter of Mexico's oil production. About 1,000 protestors are demanding compensation for pollution caused by state-owned Pemex's oil operations in the region. In 1995, Mexico produced roughly 2.6 million b/d of oil. (DJ, DMN)

February 11 In the South China Sea, Philippine navy patrol boats forcibly seize a pirate ship which violates Philippine territorial waters. The vessel is piloted by a "Chinese-looking" crew and is stopped in the same region as two ships were three weeks earlier. Those ships were of a similar class as those used by the Chinese navy. The Philippines and China currently are involved in a territorial dispute over the South China Sea's Spratly Islands. In 1995, the Spratly's were estimated by a Russian geological team to contain up to 1 billion barrels of hydrocarbon reserves. (DJ)

February 12 Turkey and Turkmenistan sign a protocol to build a pipeline which could carry up to 350 billion cubic feet per day of Turkmen natural gas to European markets. Possible routes are either through Georgia or Iran. However, financing for the $8-billion project still remains an issue. (DJ)

February 14 At the 62,000-b/d Talara refinery in northern Peru, over 2,000 employees of state-owned Petroperu end a 13-day strike protesting the company's planned privatization. As preparation for Petroperu's privatization, about 1,500 of the company's 5,500 employees recently were laid-off, with about 80 percent of those workers employed at the Talara refinery. Striking employees return to work after a judge issues an order rescinding the lay-off notices. (DJ, PON)

February 15 In Wales, a Liberian-flagged oil tanker carrying 900,000 barrels of light crude oil runs aground. Force 10 gale storms lead to evacuation of the tanker's 35-member crew. The tanker had been transporting crude from the North Sea to Texaco's refinery at Milford Haven Harbour on the Welsh coast. During the following week of salvage operations, the tanker spills an estimated 450,000 barrels of oil. (DJ, WSJ, WT)

February 15 Yemen accepts a France-brokered proposal to end the conflict between Yemen and Eritrea over Greater Hanish Island in the Red Sea. Press reports state that the French proposal would allow both countries to station troops on the disputed island. In December 1995, Yemen and Eritrea clashed for several days over Greater Hanish Island, which is strategically-located in the Red Sea's Bab al-Mandab strait. (DJ)

February 16 In Algeria, U.S.-based ARCO signs a $1.5-billion production sharing contract to conduct enhanced oil recovery work on the Rhourde el-Baguel oil field. Rhourde el-Baguel is the Algeria's second largest oil field, containing 2.5 billion in remaining reserves. ARCO plans to drill additional wells and introduce gas injection at the field in the hopes of raising the 25,000 b/d of current output to 125,000 b/d within 10 years. The deal is the latest in a series of large commitments by foreign oil companies to invest in Algeria's oil sector. (FT)

February 19 Mexican Energy Minister Jesus Reyes Heroles states that Pemex will not be privatized and that such action is still against the country's constitution. A week earlier at the Tula Hidalgo oil refinery, Mexican President Ernesto Zedillo had reiterated his support for selling part of the state-owned oil company. Due to changes in Mexican law in 1995, some of Pemex's operations, including petrochemicals, could be privatized. (NYT)

February 19 In New York, the United Nations and Iraq end almost two weeks of negotiations over Iraq's possible sale of $1 billion of oil for 90 days for a 180-day trial period. Under U.N. Resolution 986, proceeds from the sale would be used for humanitarian purposes. Concurrent with the talks, Iraqi and Turkish officials meet to determine the status of the 1.6-million b/d Iraq-Turkey pipeline, through which a majority of the oil exports would flow. The U.N.-Iraq talks, which end without a decision, are scheduled to restart in March 1996. (NYT)

February 22 In Qatar, authorities arrest 60 army and police officers after a failed coup attempt to restore the deposed emir, Sheik Khalifa bin Hamad al-Thani. The Sheik is the father of the current emir, Sheik Hamad bin Khalifa al-Thani, who overthrew him while he was vacationing in Switzerland in June 1995. Policies regarding Qatar's oil sector remained unchanged after the son's coup. (DJ)

February 22 In the Caucasus, suspected Chechen rebels blow up a natural gas pipeline near the town of Shelkovskaya, cutting off Russia gas shipments to the region. Simultaneously, a separate attack on the pipeline occurs in neighboring Dagestan. The pipeline carries gas from Stavropol to Makhachkala. The attacks are followed shortly thereafter by the region's heaviest fighting since Russian forces invaded Chechnya in December 1994. Historically, Chechnya has been Azerbaijan's primary route for its oil exports to Russia. (DJ, WP)

February 23 Morocco begins privatizating its 129,000-b/d SociJtJ Marocaine de l'Industrie du Raffinage (Samir) oil refinery by listing the refinery on the country's stock exchange. A projected 25 percent of the Samir refinery's shares will be sold in what is expected to be the country's largest privatization to date. The Samir refinery was built in 1962 and satisfies about 75 percent of Morocco's domestic demand for refined products. In another development, Mobil freezes investments at the 225 service stations it operates in Morocco. The company makes the move after stating that the government's control over margins has adversely affected its profitability. Mobil had planned to double its current investment in Morocco to $5 million. (DJ, FT, WT)

February 26 In Congo, the Angolan government and the Front for the Liberation of the Enclave of Cabinda - Renovado (FLEC-R) agree to extend their present truce by another 120 days. Cabinda is the source of over 50 percent of Angola's oil production, which reached almost 700,000 b/d at the end of 1995. The enclave is separated from the Angolan mainland by a 16-mile wide coastal strip of Zairian territory. Various FLEC factions have fought for Cabindan autonomy since Angola's 1975 independence from Portugal. Since most of Cabinda's oil fields are located offshore, however, oil production has remained relatively unscathed. (DJ)

February 27 Russian First Deputy Prime Minister Vladmir Kadannikov states that the Russian duty on oil exports will be reduced shortly from ECU 20 per ton to ECU 14 per ton, before its elimination in July 1996. However, the government will raise excise taxes on oil producers and institute a new pipeline levy to compensate for any loss in revenue to the government. (DJ)

February 27 In Nigeria, an explosion occurs on a pipeline carrying refined products to a depot about 40 miles from Lagos in the southwestern area of the country. Local repair workers notice that digging was evident around the pipeline, leading officials to suspect sabotage. (DJ)

February 27 The Azerbaijan International Operating Company (AIOC) approves a $231-million export pipeline for part of the initial oil production from the consortium's new Caspian Sea oil fields. The AIOC is a consortium of international oil companies which is developing the Azeri, Chirag, and Guneshli oil fields off Azerbaijan in the Caspian Sea. In late 1995, the consortium also approved the use of existing Russian pipelines to export part of the 70,000 b/d of new oil production. Even though Turkey and Russia have lobbied aggressively for pipeline routes through their respective countries, no decision has been made yet on the export route for later oil production, which could reach 700,000 b/d by 2005. (DJ, FT)

February 28 Oil industry sources report that Kuwait National Petroleum Corporation (KNPC) plans to temporarily shut down two of the country's three refineries for maintenance activities. The 415,000-b/d Mina al-Ahmadi refinery will be closed in mid-March for 40 days. Subsequently, the 145,000 b/d Shuaiba refinery will be shut for a similar time period beginning in mid-May 1996. The refinery closures are expected to result in a temporary shortage of refined products, especially from the Min al-Ahmadi refinery. Kuwait plans to restore the Shuaiba refinery's pre-Gulf War operating capacity of 195,000 b/d by 1997. (DJ)

February 29 Canada-based MacDonald Oil Exploration announces that it will sign an exploration agreement covering a 6,000-square mile area on Cuba's southeast coast. The deal comes amidst increased Canadian concern over possible U.S. sanctions against non-U.S. companies which conduct business in Cuba. In response to Cuba's downing of two U.S. civilian aircraft, the U.S. government is considering punitive measures which might allow ligation by U.S. citizens and corporations against foreign companies operating in Cuba as well as denying U.S. entry visas to foreign executives. (DJ, WP)

March 3 In Peru, negotiations between state-owned Petroperu and a Shell/Mobil consortium are extended until April 26. Since July 1995, the companies have been negotiating development terms for the Amazon Basin's Camisea gas field, which is believed to hold an estimated 11-trillion cubic feet (Tcf) of non-associated gas and 700 million barrels of condensate. The original deadline for the conclusion of negotiations was December 1995, but was later extended until March 1996. The Camisea development could involve connecting the field to the Bolivia-Brazil gas export pipeline now under construction. However, present talks are rumored to have stalled over potential tax breaks for Shell. Chevron and Elf Aquitaine also are interested in developing the Camisea field. (PON)

March 6 Afghan President Burhanuddin Rabbani visits Turkmenistan to discuss two proposed pipelines which could export up to 1 million barrels per day (b/d) of crude oil and 2 billion cubic feet per day (Bcf/d) of natural gas from fields in southern Turkmenistan to Pakistan. The project is being evaluated by a venture formed by Unocal (40%) and Saudi Arabia's Delta Oil (60%). The pipeline would be supplied with gas from the giant Dauletabad field, which holds a probable 45 Tcf of Turkmenistan's estimated 113 Tcf of reserves. The proposed pipelines are anticipated to run through territory controlled by several of Afghanistan's 13 rebel factions, which have been fighting since the Soviet withdrawal in 1989. (DJ, FT)

March 7 In offshore Nigeria, Shell makes a potentially large discovery with its Bongo-1 well in over 3,000 feet of water. The company estimates oil reserves at up to 500-million barrels. However, extensive appraisal drilling will be necessary before any accurate reserve estimates are compiled. Shell accounts for about half of Nigeria's oil production, which averaged roughly 1.9 million b/d in 1995. (FT, PIW)

March 7 The Caspian Pipeline Consortium agrees to a reorganization reducing Oman Oil Company's (OOC) stake in the venture from 25 percent to 10 percent. The CPC consortium is dominated by the Russian (25%) and Kazak (25%) governments and plans to begin work shortly on a $1.5 billion pipeline to export crude oil from Chevron's Tengiz field to the Black Sea. The project has been stalled because of financing difficulties. In 1995, another venture comprising Chevron, Mobil, British Gas, and Agip developed an alternative pipeline export scheme. Tengiz output currently is limited to under 80,000 b/d because of insufficient space on Russia's Transneft pipeline network. (PON)

March 18 Iran rejects a recent Gulf Cooperation Council (GCC) proposal stating that Iran's dispute with the United Arab Emirates (UAE) over the Abu Musa and Tunb Islands should be settled by the International Court of Justice. Iran forcibly seized the two islands from the UAE in the early 1970s, although joint sovereignty was maintained until 1994. Shortly after Iran's statement, the United States announces that in April 1996, it will conduct its first military maneuvers with the UAE. (DJ)

March 18 In Taiwan, Conoco and state-owned Chinese Petroleum Corporation (CPC) sign a joint venture deal in which Conoco will invest at least $65 million to drill 13 wells over the next five and a half years. Conoco has a 75 percent stake in the venture, but CPC has the future right to increase its stake to 50 percent. CPC will purchase all oil and gas produced from the venture over the next 20 years. The agreement comes amidst Taiwan's presidential elections and Chinese military maneuvers near offshore acreage in which development is planned. (FT, OGJ)

March 18 In New York, the United Nations and Iraq end a second round of negotiations over Iraq's possible sale of $1 billion of oil for 90 days for a 180-day trial period. Under U.N. Resolution 986, proceeds from the sale would be used for humanitarian purposes. While both sides have reached agreement on several key issues, the details concerning distribution of aid to Kurds in northern Iraq remains unresolved. Due in part to market uncertainty surrounding the talks, oil prices rise to their highest levels since the 1991 Gulf War. The U.N.-Iraq talks are scheduled to restart on April 8. (DJ, NYT)

March 19 After internal disputes over the extent of Israeli government involvement, Prime Minister Shimon Peres temporarily freezes the pipeline project to export natural gas from Egypt to Israel. At present, the Israeli government is divided over whether to take up to a 30 percent stake in the project. The proposed $500-million pipeline will carry 250 million cubic feet per day (Mmcf/d) of Egyptian natural gas to Israel, a similar amount to Jordan, and 50 Mmcf/d to the Palestinian-controlled Gaza Strip. Amoco and Agip hold the concessions which would supply gas for the Egyptian-Israeli pipeline. (DJ)

March 20 The state-owned oil company of Azerbaijan (SOCAR) cedes a quarter of its 40 percent stake in the offshore Shakh Deniz field development to Elf Aquitaine. Iran's NIOC as well as Russia's Yukos, Sidanko, and Rosneft also are seeking stakes in the $4 billion project. Shakh Deniz contains possible reserves of 700 million barrels of oil and up to 14 Tcf of natural gas. In addition to SOCAR and Elf, current partners in the project are BP, Statoil, and Turkey's TPAO. (PON, DJ)

March 20 Turkmen President Sapamurat Niyazov and Georgian President Eduard Shevardnadze meet in Tbilisi to discuss energy cooperation between the two countries. The meeting focuses on allowing a proposed Turkmen gas export pipeline to cross Georgian territory. The line would carry up to 1.5 Mmcf/d of natural gas to Turkey and Western Europe by 2020. Also at the meeting, President Niyazov agrees to write-off about one-fifth of Georgia's current $480 million debt for Turkmen gas it already has received. (PON, DJ)

March 21 Greek Foreign Minister Theodoros Pangalos states in an Izvestia newspaper article that Russia, Greece, and Bulgaria are considering the construction of a $2.5-billion oil pipeline which would bypass Turkey's Bosporus Strait. The proposed pipeline would run from the Bulgarian city of Burgas to Alexandroupolis in Greece. If built, the Bulgarian-Greek pipeline could compete against a proposed plan to export new Caspian Sea oil production through a proposed Turkish pipeline. (DJ)

March 22 Nigeria implements two new procedures to curtail corruption with respect to oil export revenues. The first measure will have "internationally recognized" agents inspect all crude oil exports. The second measure involves announcing oil export earnings on a monthly, rather than yearly, basis. A government-sponsored study released in 1995 stated that the government could not account for about $12 billion worth of oil export revenues between 1988 and 1994. Both of the new changes will be implemented in April 1996. (DJ)

March 22 Kenyan Minister for Finance Musalia Mudavadi states to World Bank representatives that his government has "initiated the process" of privatizing the country's oil industry. Possible privatizations would include Kenya Petroleum Refineries Limited and Kenya Pipeline Corporation. The former owns a 50 percent stake in the 90,000-b/d Mombasa refinery. The latter company has so far invested an estimated $400 million in the construction of a liquefied petroleum gas import pipeline which would have an extension to Kampala, Uganda. (DJ)

March 24 Kuwaiti Oil Minister Abdul Mohsen al-Mudej states that his government will sell off 30 Kuwait National Petroleum Corporation (KNPC) owned gas stations. The move is part of the Kuwaiti government's efforts to encourage private involvement in the country's oil sector. KNPC currently owns about 90 retail gas stations in Kuwait. (DJ)

March 25 In Bolivia, employees of state-owned Yacimentos Petroliferos Fiscales Bolivianos (YPFB) begin a strike in protest of the government's planned privatization of the country's "strategic industries." In anticipation of the strike, army troops and police are stationed at refineries, pipelines, and gas distribution facilities in order to ensure that oil and gas output remained unaffected. No initial disruptions in production are reported. Bolivian President Gonzalo Sanchez de Lozada currently is meeting with opposition leaders to reach an agreement on the country's new hydrocarbon law. YPFB workers are demanding a one year severance pay for every year of employment with the company. (PON, DJ)

March 26 Jordanian Energy and Mineral Resources Minister Hashem Dabbas states that Jordan currently is negotiating with three oil companies to build a $2-billion, 250,000-b/d refinery at Aqaba on the Red Sea. Under optimal conditions, the refinery could be operational by 2000. Jordan currently has a 100,000-b/d refinery at Zarqa, which runs at around 60 percent of capacity. The country imports its 75,000 b/d crude oil requirements from Iraq under a U.N.-approved plan. (DJ)

March 26 Arco and Lukoil, one of Russia's largest independent oil companies, form a joint venture to develop oil and gas reserves in Russia and other former Soviet republics. Total investment could reach $3 billion over a three year period. Arco will contribute almost all of the projected capital needs, even though it has a 54 percent stake in the venture. In September 1995, Arco purchased $250 million worth of convertible bonds in Lukoil, giving it a 6 percent stake in the Russian company. (FT, WSJ)

March 29 The Pakistani government officially agrees to allow a proposed Iranian pipeline to run over Pakistani territory on its way to India. The $3-billion pipeline will carry an estimated 1.6 billion cubic feet (Bcf/d) from Iran's South Pars gas field to markets in Karachi. Negotiations concerning a possible extension to western India recently were stalled over whether the pipeline route would run through offshore or onshore Pakistani territory. Recent discussions between the Indian and Pakistani governments also focused on the location of compressor stations. (DJ)

March 28 In the Philippines, President Ramos signs legislation ending 25 years of government control over petroleum product prices. The new deregulation law implements a 4 percent tariff on refined product sales. This tariff subsequently will be eliminated by 2004. The law also encourages new investment in the Philippine refining sector, which is dominated by three large refining companies. (DJ)

April 1 In Australia, a federal court upholds a 1994 decision regarding oil exploration permits in the Timor Gap between Australia and Indonesia. Prior to the signing of the Timor Gap Zone of Cooperation Treaty in 1989, Australia-based WMC held a permit for exploration in what was then Australian territorial waters. The court's rejection of the recent government appeal now clears the way for three other permit holders to file monetary claims for compensation from the government. WMC's claim is estimated at around $120 million. (PON)

April 3 U.S.-based Pennzoil sells half of its roughly 10 percent stake in a large offshore Caspian Sea oil field development project. The $8-billion development of the offshore Azeri, Chirag, and Guneshli fields is being undertaken by a consortium of Western companies led by Amoco and British Petroleum. Pennzoil's partial stake is bought by Japan-based Itochu Exploration, which will now be required to invest approximately $400 million in future field development costs. The three Caspian Sea fields contain estimated reserves of up to 5 billion barrels of oil and 2.5 trillion cubic feet (Tcf) of natural gas. Pennzoil also retains a 30 percent interest in the nearby 1-billion barrel Karabakh oil field development. (PON)

April 4 Russia-based Lukoil purchases a 10 percent stake in the Caspian Sea's Shakh Deniz oil field development. Lukoil's share leaves Azerbaijan's state-owned oil company, SOCAR, with a 20 percent stake in the project. The field is estimated to contain up to 700 million barrels of oil and 14 Tcf of natural gas. The development is being undertaken by British Petroleum/Statoil (45%), SOCAR (20%), Turkey's TPAO (15%), and Elf Aquitaine (10%). (PON)

April 4 U.S. based Enron Corporation files a lawsuit in Texas against the owners of the U.K.'s Central Area Transmission System (CATS). Enron, which signed a "take-or-pay" contract for 240 million cubic feet per day (Mmcf/d) of natural gas from the offshore J-Block area fields, has refused to accept or pay for gas shipments since September 1995. Subsequently, Phillips Petroleum, an owner of CATS, has been reinjecting the gas into the J-Block fields in order to boost condensate production. Enron argues that the CATS pipeline does not meet the standards necessary to fulfill the contract and that reinjection could jeopardize reservoir integrity and future gas shipments. Due to recent gas market deregulation in the United Kingdom, gas prices have fallen below those to which Enron agreed to pay when it signed its take-or-pay contract with CATS. (FT, PON)

April 4 The Ecuadorean government awards exploration rights to U.S.-based ARCO and two Argentinean companies. The award gives ARCO right to the block 24 concession in Ecuador's Amazon basin. Although Ecuador has raised its oil production above 390,000 barrels per day (b/d), output is capped because of limited pipeline access from the Amazonian Oriente region to the Esmeraldes export terminal on the Pacific Ocean. This month, ARCO agreed to construct an 80,000-b/d pipeline to connect Oriente fields to the 350,000-b/d Trans-Ecuadorean pipeline at Baeza. (DJ, PON)

April 6 According to press reports in Yemen, government sources state that the country's oil production will reach 400,000 b/d by 1997. The projected 40,000 b/d increase over current levels will come from a new discovery in Hadramawt in southern Yemen as well as from new production at the East Shabwah field near Sanaa. The Hadramawt area's Jannah block is expected to yield about 30,000 b/d from the four area fields. (DJ)

April 9 In the South China Sea, Indonesia sends eight warships and a helicopter to Natuna Island after the captain of a private boat is shot and killed by unidentified gunmen. Indonesia's Pertamina and Exxon currently are undertaking a $35-billion gas field development in the area, which could include construction of a liquefied natural gas (LNG) plant on Natuna Island. The offshore Natuna gas field is estimated to have roughly 45 Tcf of recoverable reserves. (DJ)

April 12 In Vietnam, U.S.-based Conoco is awarded exploration rights to offshore blocks 133 and 134, which are located approximately 200 miles off the country's southeastern coast. The two tracts overlap with Chinese territorial claims in the South China Sea and acreage which previously was awarded by China to U.S.-based Crestone Energy in May 1992. Crestone has conducted limited exploration in its Wan'an Bei 21 concession. After the Vietnamese award, a Chinese foreign ministry spokesman states that "China has indisputable sovereignty in this area of the South China Sea." (PON, FT, DJ)

April 15 The Vietnamese government approves the creation of a 100,000-acre industrial park at Dung Quat on Vietnam's central coast. The facility will be the site of country's first refinery, even though Vietnam's crude oil reserves and primary markets for refined products are located in the south. After government insistence in late 1995 that the refinery be located at Dung Quat, Total pulled out of the $1-billion project and stated that a refinery at that location was not viable financially. Subsequently, Conoco, Malaysia's Petronas, and South Korea's Lucky Goldstar agreed to continue with the 125,000-b/d project. (DJ)

April 16 The Colombian army is put on high alert after rebels from the leftist guerilla organization, Revolutionary Armed Forces of Colombia (FARC), attack a six-truck military convoy near the southern town of Puerres. The attack results in the deaths of 31 soldiers who were assigned to guard the Trans-Andean pipeline. The pipeline transports about 40,000-b/d of Ecuadorean crude oil to the Colombian terminal at Tumaco on the Pacific Ocean. (DJ)

April 17 The Iranian government-run Islamic Republic News Agency (IRNA) states that Iran will soon receive its first shipment of five new 300,000-Dwt oil tankers from South Korea's Daewoo. The deliveries will boost state-owned National Iranian Tanker Company's (NITC) fleet capacity to 3.8 million tons. The tanker acquisitions have become especially important to Iran since the mid-1995 imposition of the unilateral U.S. embargo of Iranian oil exports. In the second half of 1995, FOB liftings of Iranian crude at domestic terminals fell dramatically, requiring NITC to increase its capabilities to transport Iranian crude oil to spot markets. (DJ)

April 17 In Congo, Elf Aquitaine states that its offshore N'Kossa field development has fallen three months behind schedule. Production of 50,000 b/d from the 400 million barrel field will be pushed to July after a delay in the arrival of a floating production platform. Output is expected to reach 100,000 b/d within two years after field start-up. By 1998, Congo's oil production is expected to rise from 175,000 b/d at present to around 260,000 b/d. Additional production will come from Agip's offshore Kitina field. The N'Kossa field is being developed by Elf (51%), Chevron (30%), state-owned Hydro-Congo (15%), and South Africa's Engen (4%). (PON)

April 18 Mobil agrees to purchase a 25 percent stake from the Kazak government in the giant Tengizchevroil consortium. The sale decreases the Kazak government's share in the venture to 25 percent and leaves Chevron's 50 percent stake unchanged. Tengizchevroil's development of the 6.6-billion barrel Tengiz oil field is expected to cost close to $20 billion. Chevron has invested about $700 million in the field so far, which now produces about 80,000 b/d. Output has been constrained up until now because of lack of space on Russia's Transneft pipeline network. (FT, WP)

April 18 Press reports state that the Laotian government has signed a memorandum of understanding with an unnamed U.S. company regarding construction of an oil refinery in Borikhamxay province east of Vientiane. The proposed refinery would be supplied via a crude oil pipeline from Vietnam. As of early 1996, several Western oil companies, including Hunt Oil, were conducting exploration activities in Laos. (DJ)

April 18 The United Arab Emirates (UAE) criticizes Iran for starting-up a power plant on Greater Tunb Island, which is located strategically in the Persian Gulf's Strait of Hormuz. Iran seized control of the Greater and Lesser Tunb islands in the early 1970s. Joint control over nearby Abu Musa was maintained until 1994, at which time Iran forcibly took the island. The UAE has recently called for International Court of Justice resolution of the dispute. However, Iran does not recognize the Court's authority. (DJ)

April 19 Kenyan Minister of State Jackson Kalweo states that his country would like to have the International Court of Justice settle a territorial dispute with Sudan over a triangular region of desert and swamps around the town of Elimi. The 2,400-square mile Elimi region, which is recognized internationally as part of Sudan, is thought by Kenyan officials to hold an unspecified amount of oil. (DJ)

April 20 At an oil refinery in the central Russian city of Ryazan, an underground oil tank explodes, killing two workers who were conducting maintenance work on the structure. The blast occurs after the workers penetrate the top of the 350,000-cubic foot tank and cause gas vapors to ignite. (DJ)

April 24 In New York, the United Nations and Iraq end a third round of negotiations over Iraq's possible sale of $1 billion of oil for 90 days for a 180-day trial period. Under U.N. Resolution 986, proceeds from the sale would be used for humanitarian purposes. While both sides have reached agreement on most of the key issues, chief Iraqi negotiator Abdul Amir al-Anbari says that the United States and the United Kingdom have fundamentally altered the text of a proposed agreement which he had received from the United Nations early in the third round. Al-Anbari states that the changes have postponed any possible deal. The U.N.-Iraq talks are scheduled to restart on May 10. (DJ)

April 25 Clashes between Nigeria and Cameroon over the disputed Bakassi Peninsula erupt for the second time since February 1996. Both countries claim the other side started the latest confrontation. No casualties are reported. The Bakassi Peninsula is a 600-square mile region bordering the two countries which contains oil and natural gas reserves. Nigeria claims that an 1858 treaty places the Peninsula in its territory. Cameroon contends that Nigeria offered it the region after Cameroon refused to help Biafran rebels during Nigeria's 1967 civil war. More recently, Nigeria has accused Cameroon of siphoning off 130,000 barrels per day (b/d) of oil from the producing fields in the region. The International Court of Justice in the Hague is currently reviewing the case. (DJ)

April 27 The Caspian Pipeline Consortium (CPC) agrees to build a 900-mile pipeline which could carry oil production from the Tengiz oil field to export terminals on the Black Sea. In early 1996, CPC was reorganized, resulting in a decreased stake for Oman Oil Company and an option for Chevron to acquire a 15 percent share in the pipeline. The consortium includes the governments of Kazakstan, Russia, and Oman as well as eight oil companies. The $1.2 billion pipeline deal will extend Russia's existing pipeline system from Tikhoretsk to the Novorossiisk terminal on the Black Sea. Second phase development will include a new line from Tengiz to Tikhoretsk. (FT, DJ, PON, OGJ)

April 29 In Congo, the government announces that bidding documents will be issued shortly for the privatization of Hydrocarbures de Congo (Hydro-Congo) and Congolaise de Rafinage (CORAF). Although Hydro-Congo was previously active in upstream exploration and production, its activities recently were limited by a lack of financial resources to the distribution of petroleum products. CORAF is the state-owned refining company. The privatizations are expected to spur foreign investment in the country's ailing downstream sector and allow for adequate processing of increased domestic oil output. In 1995, Congo produced about 175,000 b/d. Oil production is expected to rise to around 260,000 b/d by 1998 after Elf's N'Kossa and Agip's Kitina fields come online. (DJ)

April 30 In the United States, President Clinton approves the sale of $227 million of crude oil from the Strategic Petroleum Reserve. At current oil prices, roughly 12 million barrels would be sold. The Clinton Administration hopes that the sale will lower gasoline prices in the United States, which are at their highest levels in five years. (WSJ)

May 1 Bolivian President Gonzalo Sanchez de Lozada signs a new hydrocarbon law allowing for the privatization of state owned Yacimientos Petroliferos de Fomento Boliviano (YPFB). YPFB is one of six large state-owned companies which are undergoing privatization. Fifty-two foreign companies have pre-qualified to bid for YPFB's exploration, transportation, and product marketing operations. YPFB will retain control of three domestic oil refineries and all domestic pipelines. Bolivia currently is involved in a $1.5 billion export pipeline project to carry natural gas to Brazil. A number of foreign companies, including Enron and Tenneco, are building the privately-financed line. (DJ, WSJ)

May 3 Following French diplomatic initiatives, Yemen and Eritrea agree to form an arbitration panel to solve their territorial dispute over three islands located 100 miles north of the Red Sea's Bab al-Mandab strait. In December 1995, the two countries fought briefly over control of Greater Hanish Island, resulting in twelve deaths. Eritrea now controls Greater Hanish Island, while Yemeni forces hold Lesser Hanish and Zugar Islands. All of the islands lie astride major oil shipping routes as well as near offshore oil exploration acreage held by foreign companies such as Houston-based Anadarko Petroleum. (DJ)

May 4 Eight hundred Norwegian oil workers stage a strike in sympathy of a similar month-long action by a construction workers' union demanding revised contract laws. The Federation of Trade Unions of Oil Workers' (OFS) strike cuts 1 million barrels per day (b/d) of oil production from the 190,000 b/d-Statfjord B, 320,000-b/d Statfjord C, 150,000-b/d Gullfaks A, 150,000-b/d Gullfaks C, Ula, Heimdal, and Oseberg C fields. The shut-in amounts to about one-third of Norway's oil output. Subsequently, Statoil, a major Norwegian oil company, declares force majeure on one cargo of crude oil deliveries. The strike ends after six-days due to lack of unanimity among OFS members. (DJ, PON)

May 10 In Vietnam, Royal Dutch/Shell relinquishes its Block 10 concession in the Nam Con Son basin off the country's southeastern coast. Shell's decision is made after drilling four unsuccessful exploration wells on the acreage, which was long-thought to hold promising potential. The move is made amidst the Vietnamese government's rejection of Australia-based BHP's efforts to renegotiate the terms for its Dai Hung oil field in Block 5-1. BHP sought a revised contract after appraisal drilling reduced Dai Hung's estimated reserves from 500 million to 200 million barrels. Due to unexpectedly complex geology, Dai Hung's production since its October 1994 start-up has fallen from 35,000 b/d to 12,000 b/d. (FT)

May 11 The Vietnamese government states its intention to build a second 120,000-b/d refinery in Thanh Hoa province, roughly 75 miles south of Hanoi. Vietnam is planning to build its first 120,000 b/d at Dung Quat on the country's central coast. Foreign companies such as France-based Total have criticized the government's decision to build the two new refineries far away from the country's crude oil reserves and main product markets in the south. A consortium including Conoco is developing plans to build the first refinery, which could become operational by 2000. The government hopes to finish the second refinery by 2002. (DJ)

May 11 Kazakstan and Iran sign an agreement in which Kazakstan will ship up to 80,000 b/d of crude oil from the Tengiz oil field in exchange for a comparable amount of Iranian crude oil supplied at the Kharg Island oil terminal in the Persian Gulf. It is unknown how U.S. sanctions against Iran will impact on the agreement, which involves U.S.-based Chevron. In March 1996, output at the Chevron-operated Tengiz field reached 100,000 b/d, up dramatically from the 50,000-60,000 b/d which the field was limited to prior to a recent export pipeline agreement with Russia. Production is slated to reach 130,000 b/d the end of 1996. Peak output from the 6-billion barrel field could reach more than 700,000 b/d by 2010. (DJ)

May 14 The Peruvian government and a Shell/Mobil consortium sign a $2.8-billion deal to develop the Camisea wet natural gas field. The Camisea field contains estimated reserves of 11 trillion cubic feet (Tcf) of natural gas and 700 million barrels of condensate. Development will include construction of a 600-megawatt (MW) gas-fired power plant and 373 miles of oil and gas pipelines to link the Amazonian field to the coastal capital of Lima. Construction of other gas-fired power stations is possible, as is a link to the proposed gas export pipeline between Bolivia and Brazil. Concurrent with agreement, a car bomb explodes at a Shell office building in Lima. Maoist Sendero Luminoso rebels opposing foreign involvement in Peru's natural resource development are blamed for the attack. (PON, DJ, WSJ)

May 14 Iran signs an agreement to acquire a 10 percent stake in the Caspian Sea's Shakh Deniz oil field. However, the Iranian share will be taken by OEIC, a 60 percent privately-owned engineering and construction company, rather than by state-owned National Iranian Oil Company. In April 1996, Russia-based Lukoil purchased a 10 percent stake in Shakh Deniz, which contains up to 700 million barrels of oil and 14 Tcf of natural gas. The new development consortium now comprises British Petroleum/Statoil (45%), SOCAR (10%), Turkey's TPAO (15%), and Elf Aquitaine (10%). (PON)

May 15 In offshore Myanmar, U.S.-based ARCO is awarded the block M-7 concession, which lies adjacent to Total's and Unocal's $1.1-billion Yadana gas field development. The Yadana field contains estimated gas reserves of 5.7 Tcf. Total and Unocal currently are planning to construct a pipeline to supply 525 Mmcf/d of Yadana gas to Thailand, starting in 1998. In nearby acreage, a Texaco consortium is negotiating a similar gas sales contract with Thailand for the 1.5-Tcf Yetagun field. (PON)

May 16 Chevron and state-owned China National Offshore Oil Corporation sign a production sharing contract for promising exploration acreage in the South China Sea. Chevron's Contract Area 63/15 lies south of Hainan Island off the Vietnamese coast. The concession also is adjacent to Arco's large Yacheng 13-1 gas field, which in January 1996, began supplying natural gas to Hongkong and mainland China via pipeline. (PON, DJ, OGJ)

May 16 In Kazakstan, Mobil acquires a $1.1-billion, 25 percent stake in the Tengiz field development from the Kazak government. Chevron (50%), Mobil (25%), and the Kazak government (25%) are now the parties involved in the project. Chevron has spent almost $1 billion so far in field development work, which has suffered delays because of difficulties finding a solution to the problem of export routes. Chevron is expected to spend another $750 million for its share of a new export pipeline, which will run to Russia's Novorossiysk oil terminal on the Black Sea. Mobil's commitment will require an initial investment of $500 million, with the balance of $600 million due in installments by 2000. (WSJ, DJ)

May 20 In New York, the United Nations and Iraq agree to U.N. Resolution 986, which provides Iraq with the opportunity to sell $1 billion of oil for 90 days for a 180-day trial period. Under the resolution, proceeds from the sale would be used for humanitarian purposes. The agreement comes following months of heated negotiations. Iraqi oil exports are expected to begin by the Fall of 1996, after a pumping station on the Iraq-Turkey pipeline is repaired and U.N monitoring and aid distribution facilities are put in place. Shortly after the agreement, the White House announces its decision to allow U.S. oil companies to purchase Iraqi oil exports. (FT, PON, WSJ)

May 22 In Cabinda, Front for the Liberation of the Enclave of Cabinda - Armed Forces of Cabinda (FLEC-FAC) rebels fight with Angolan government troops only a week after FLEC-FAC signed a cease-fire agreement with the government. Since 1975, FLEC-FAC's 3,000-man army has fought the Angolan government for the 2,880-square mile Cabinda province, which is located on the coast between Zaire and Congo. Cabinda's offshore oil fields are run primarily by Chevron and account for over half of Angola's 700,000 b/d oil production. FLEC-FAC's struggle is separate from Jonas Savimbi's UNITA conflict. In 1995, UNITA and the government signed a peace accord and presently are demobilizing their armies. (DJ)

May 22 In Equatorial Guinea, Planning Minister Antonio Fernando Nve Ngu states that oil production from Mobil's offshore Zafiro field will begin production by August 1996, only 18 months after the field's discovery. A floating production, storage, and offloading (FPSO) vessel will be used in a fast-track development program, which is slated to yield 40,000 b/d initially and 80,000 b/d 1998. The Zafiro field is a boon for the country's economy, which is one of the poorest in Africa. (DJ, OGJ)

May 23 State-owned Petroleum Authority of Thailand (PTT) signs agreements to increase its purchases of gas from foreign-operated Gulf of Thailand gas fields. In the two separate deals, PTT agrees to buy 330 Mmcf/d of gas from Unocal's 1-Tcf Pailin field by 2001 and 550 Mmcf/d of gas from Total's 3.3-Tcf Bongkot field by mid-1998. Thailand's domestic gas demand is estimated at 1 Bcf/d and is projected to double over the next five years. To meet its increased requirements, Thailand also is planning to import gas from Malaysia, Myanmar, and Indonesia. (PON)

May 28 Following a May 7 ambush of Nigerian troops by Cameroonian army forces, Nigeria and Cameroon agree to allow a U.N. mission to travel to the disputed Bakassi peninsula. Clashes between Nigeria and Cameroon have erupted several times on the peninsula since February 1996. The Bakassi Peninsula is a 600-square mile region bordering the two countries. It contains oil and natural gas reserves and is near Shell production facilities in southeastern Nigeria. Nigeria claims that an 1858 treaty places the Peninsula in its territory. Cameroon contends that Nigeria offered it the region after Cameroon refused to help Biafran rebels during Nigeria's 1967 civil war. More recently, Nigeria has accused Cameroon of siphoning off 130,000 barrels per day (b/d) of oil from the producing fields in the region. The International Court of Justice in the Hague also is reviewing the case. (DJ)

May 29 In Vietnam, Unocal signs a contract for the Block B concession off the country's southwestern coast. The move follows Conoco's acquisition last month of offshore acreage claimed by both Vietnam and China. Unocal's acquisition is the first by a foreign company in Vietnam's territory in the Gulf of Thailand. The company believes that natural gas may be present in Block B. Any sizable gas discoveries by Unocal likely would be exported to Thailand via Unocal's other existing gas processing complexes in the Gulf of Thailand. (FT)

May 29 In Russia, Mobil and Texaco sign a production sharing agreement (PSA) for the Sakhalin III venture. Located offshore Sakhalin Island in Russia's Far East, Sakhalin III is one of three large oil and gas developments being planned by foreign oil companies. In the deal, both companies agree to spend $150 million in exploration activities over a six year period. Since last year, many foreign oil companies have been waiting for revisions to Russia's new PSA law, which is widely viewed as not offering adequate -legal protection for foreign investment in the country's oil and gas sectors. (DJ, PON)

June 6 Representatives of the Organization of Petroleum Exporting Countries (OPEC) convene in Vienna. Overproduction by member countries, Gabon's departure from the Organization, and Iraq's anticipated oil exports under U.N. Resolution 986 are the major issues discussed at the session. Iraq's production quota is raised by 800,000 barrels per day (b/d) to 1.2 million b/d. Other member's production quotas remain unchanged, except for Gabon, which officially leaves OPEC. (DJ, PON, WT)

June 7 In Vietnam, Australia-based Anzoil announces the discovery of a potential 900-billion cubic foot (Bcf) natural gas field located onshore about 60 miles southeast of the capital. The find is unique because very few oil and gas exploration efforts have surveyed Vietnam's onshore or northern areas. The only other known onshore oil or gas field in Vietnam is the small 50-Bcf Tien Hai gas field developed in the 1970s. It now supplies local industrial customers with about 10 Million cubic feet per day (Mmcf/d) of gas. (FT, DJ)

June 11 Exxon states that it will soon begin work on its $15-billion Sakhalin I oil and natural gas development in Russia's Far East. The Sakhalin I project will develop an estimated 5 billion barrels of oil and 15 trillion cubic feet (Tcf) of gas located in three offshore hydrocarbon fields. The $300 million appraisal program will include drilling one exploration well and conducting a 3-D seismic survey. The U.S. company says that it will start working despite ongoing differences with the Russian government over the country's new production sharing law, which is widely viewed as not offering adequate legal protection for foreign investment in the country's oil and gas sectors. (FT)

June 14 In Manila, the Philippine government announces that full deregulation of the downstream oil sector will occur by March 1997. This deregulation program call=s for a complete phase out of the Oil Price Buffer Fund, which has been used to protect consumers from world oil price fluctuations. Past increases in refined product prices, such as the 13 percent hike in February 1996, have resulted in physical threats against government officials. Freeing of prices will likely spur investment in the country's downstream sector by foreign companies like British Petroleum and Mobil. (FT)

June 17 Petronas, Malaysia's state-owned oil and gas company, acquires a 30 percent stake in Engen, South Africa's domestic refining and retailing company. The acquisition price is $436 million. The move will help to secure Petronas' downstream market access in southern Africa. (FT)

June 17 The Middle East Economic Digest reports that Iraq's State Oil Marketing Organization (SOMO) will soon sign a 3-month sales contracts with foreign oil companies. In another development, the United Nations selects France-based Banque Nationale de Paris (BNP) to hold the escrow account for Iraqi oil sales, the proceeds of which will be used by the U.N. for humanitarian purposes. Iraq could begin exporting oil under U.N. Resolution 986 as early as late September 1996. (DJ)

June 17 In one the few oil field developments moving forward in Vietnam, Mitsubishi announces plans to bring its offshore Rang Dong field into production by May 1998. The 250-300 million barrel oil field is expected to come online with output of 45,000 b/d, with a later peak of 100,000 b/d. The field will use a floating, production, storage, and offloading (FPSO) vessel to decrease capital costs. The Rang Dong project comes amidst difficulties recently encountered by foreign companies with other oil field developments, such as Australia's BHP at Dai Hung, Mobil at Thanh Long, and Petronas at the Ruby field. (DJ)

June 19 The U.S. House of Representatives passes a bill calling for the imposition of punitive sanctions on foreign companies which invest over $40 million in Iran's oil industry. The bill also penalizes companies and individuals who sell weapons or oil equipment to Libya. The U.S. Senate already has approved a similar measure. President Clinton is expected to support the bill after a committee works out differences between the House and Senate versions of the measure. (DJ)

June 20 The Venezuelan Congress approves eight, multi-billion dollar, profit-sharing deals which allow foreign oil companies to explore and produce oil in Venezuela for the first time since the country's 1975 nationalization of the oil industry. The deals could boost Venezuela's current oil production by 500,000 b/d by 2005. Foreign oil companies such as Amoco and British Petroleum are expected to sign final deals with state-owned PdVSA within 10 days and may begin working on their new acreage by the third quarter of 1996. The eight blocks are estimated to hold between 7 to 11 billion barrels of light crude oil reserves. (PON, DJ)

June 20 In Ecuador, U.S.-based Arco announces that it will build a 105-mile secondary crude pipeline to connect its Villano field to the main 350,000-b/d Trans-Ecuadorean export pipeline. This move is significant because it follows the Ecuadorean government's recent abandonment of a 100,000-b/d expansion of the Trans-Ecuadorean pipeline. The proposed expansion would have boosted the country's ability to carry heavier crude oil from the Amazonian Oriente region, where the Villano field is situated. After coming online in 1999, Arco's new pipeline will transport up to 80,000 b/d of heavy 21^o API crude oil. (DJ)

June 21 The Brazilian government says it will create an independent organization to regulate foreign and domestic investment in the country's oil sector. In November 1995, a constitutional amendment was passed ending state-owned Petrobras' monopoly over the Brazil's oil industry. However, no legal framework has been developed to allow for foreign investment, especially in upstream oil exploration and production. Brazil currently produces 785,000 b/d of oil, enough to meet only about half of domestic demand. Foreign investment is viewed as a necessity to increase domestic production so as to meet as much of future consumption requirements, which are projected to rise to 2.3 million b/d by 2005. (DJ)

June 21 In Lima, the Peruvian Defense Ministry states that between 8,000-10,000 Ecuadorean troops have moved into the northern Cordillera del Condor demilitarized zone. Border skirmishes have occurred in the region ever since a 1942 war between Peru and Ecuador, in which the latter country lost over half of its territory. The most recent conflict took place in early 1995, resulting the deaths and injury of over 1,000 soldiers from both sides. The Cordillera del Condor region lies near Peru's Block 1A-B, which accounts for about half of Peru's 125,000 b/d of oil output. (DJ)

June 24 China National Petroleum Corporation (CNPC) states that oil production from the Tarim Basin, which is located in China's western Xinjiang Uygur Autonomous Region, will reach 64,000 b/d in 1996. This represents a 25 percent rise in output as compared to 1995. By 2005, CNPC predicts that the Tarim Basin will become the country's second largest oil production region after Daqing. (PON, DJ)

June 24 Following a failure to obtain long-term gas purchase agreements with power producers, U.S.-based Tenneco suspends its plan to build a $689-million, 750-mile pipeline to carry Argentinean natural gas over the Andes to Chile. Canada's NovaGas currently is building a competing $350-million, 290-mile natural gas pipeline to link the two countries. However, NovaGas' pipeline has provoked criticism by environmental groups and local residents, who recently demonstrated along the main highway near Santiago that provides access to the pipeline route. (PON, WSJ)

June 24 Qatar's government and Arco sign an agreement to bring the offshore al-Rayyan field online in September 1996. A test well drilled at al-Rayyan in September 1995 resulted in a flowrate of 10,000 b/d. Initial output of 35,000 b/d will come from temporary production facilities. Subsequently, a determination whether to install permanent platforms will made by mid-1997. Qatar currently produces about 500,000 b/d, more than 30 percent above the country's OPEC quota of 378,000 b/d. (DJ)

June 27 In Bolivia, Enron agrees to a revised contract for its role in the construction of a $1.5 billion pipeline to transport Bolivian natural gas to markets in southeastern Brazil. The revision substantially decreases Enron's profit margin and requires that the U.S. company have all financing completed and construction begun by June 15, 1997. The changes come after critics charged that the original 1994 contract was contrary to Bolivia's national interests. (WSJ)

June 27 Following arrests of pro-democracy activists by Burma's military government, the U.S. Senate Appropriations Committee approves mandatory unilateral sanctions against Burma. In September 1996, the Senate is expected to vote on the 1995 Free Burma Bill as an amendment to the U.S. State Department's foreign aid appropriations bill. If passed, proposed U.S. sanctions would bar any future U.S. investment in Burma until democracy is restored. This would likely affect U.S.-based Unocal, which is undertaking a $1.1-billion development of its 5.8-Tcf Yadana field located in Burma's Gulf of Martaban. The Yadana project also will entail constructing an export pipeline to ship up to 550-Mmcf/d of gas to Thailand, starting in 1998. (DJ)

July 1 The United States rejects an Iraqi plan for distributing food and medicine under United Nations Resolution 986, on the grounds that it would allow Saddam Hussein=s government to evade certain sanctions as well as to give it control over distribution of supplies to separatist Kurds in northern Iraq. Resolution 986 would allow Iraq to sell $1 billion worth of oil every 90 days for an initial period of 6 months. (WP)

July 1 Norway=s offshore oil unions reach a new wage agreement with their employers, averting a planned strike which could have resulted in a 330,000 barrels per day (b/d) cut in oil production. The strike would have initially affected operations at Statoil=s Statfjord A platform and then spread to the Gullfaks C platform later in the week. (PON)

July 1 Chevron formally takes control of Venezuela=s Boscan oilfield, which currently produces 80,000 b/d of heavy crude. Chevron plans to invest $400 million over the next 3 years in order to boost capacity by 50 percent, to about 115,000 b/d. (PON)

July 2 Mobil announces that Norway=s government has approved a $7 billion project to develop 2.2 billion barrels of oil and natural gas in the Norwegian Sea off the country=s west coast. When complete, the AAasgard@ project will be one of the world=s most extensive subsea oil projects. Norway=s state-owned oil company, Statoil, holds a 60.5 percent share and will be the operator of the project, which is expected to begin producing 200,000 b/d of oil by the end of 1998. Natural gas output from of 1 billion cubic feet per day is expected to begin in the year 2000 (WT)

July 2 Shell Oil announces that it has finalized plans with 3 other oil companies on a $1.45 billion project to drill at record depths in the Gulf of Mexico. The project, known as AUrsa,@ is expected at its peak to produce 150,000 b/d from a depth of 4,000 feet. (WT)

July 5 The Financial Times reports that six international consortia have bid for oil exploration licenses in disputed waters surrounding the British-owned Falkland Islands. Britain and Argentina fought a short war over the islands in 1982, but in recent years have improved relations and attempted to cooperate in developing the potentially large oil reserves in the Falklands area. (FT)

July 7 OPEC issues a resolution announcing Gabon=s withdrawal from the organization, effective January 1, 1995. Gabon had an OPEC quota of 287,000 b/d. (FT)

July 11 China=s official Xinhua news agency announces that China is planning to open up additional oil and natural gas resources -- in the western Tarim Basin and elsewhere -- to foreign energy companies . Faced with rapidly rising energy demand, China is attempting to significantly expand its oil and gas exploration and production efforts. According to the report, China to date has signed 35 oil contracts worth $500 million with 32 foreign oil companies. (DJ)

July 11 Shell Nigeria reopens four flow stations at the Nembe Creek crude oil pipeline in southeastern Nigeria after a shutdown of nearly a week. The pipeline and four pumping stations have a combined capacity of 125,000 b/d of Bonny Light crude oil. (DJ)

July 13 Three explosions at a natural gas well in 65 miles southeast of Austin, Texas kill two workers and create a 40-foot fireball with 1,000 degree heat. (WT)

July 16 A $1 billion, class-action lawsuit is filed against Texaco on behalf of Ecuador=s Amazon Indians and settlers. The suit seeks to recover damages incurred from Texaco=s activities over 25 years in Ecuador=s rain forest, as well as compensation for the families living in the area, located in eastern Ecuador. Texaco pulled out of Ecuador in 1991. (WP)

July 17 The United States Senate passes legislation which would penalize foreign energy companies investing in or trading with Iran or Libya. The U.S. House of Representatives passed a similar bill in June, with differences in the two bills to be worked out in House-Senate conference. (WSJ)

July 17 Anadarko Petroleum announces that Algeria has issued a AProvisional Exploitation Authorization@ for initial crude oil production from the Hassi Berkine and Hassi Berkine South oilfields in the Sahara Desert in southeastern Algeria. Anadarko expects production from the fields to reach 200,000 b/d by 1999. The 42-degree API crude oil will be shipped by pipeline to Mediterranean ports. (PON)

July 18 The United Nations formally approves an Iraqi aid distribution plan, a major step forward in the direction of allowing Iraq to sell oil under Resolution 986. (DJ)

July 19 Ecuador=s newly-appointed energy minister, Alfredo Adum, announces that Ecuador will need additional oil pipelines to increase the country=s crude oil delivery capacity. Adum will take over the energy ministry on August 10, when Ecuador=s president-elect, Abdala Bucaram, replaces Sixto Duran-Ballen. (DJ)

July 26 Explosions fed by a propane leak at a major natural gas processing plant in the southern Mexican state of Chiapas kill six workers and injure 39 others. Estimates are that the accident could cost state oil company Petroleos Mexicanos (Pemex) more than $200 million. The Cactus facility processed about one-third of the propane and butane gas used for cooking and heating in Mexico. (DJ)

July 29 In Colombia, around 5,000 rural residents block entrances to Ecopetrol facilities in the Orito region, where 112,000 b/d of oil are produced. The protestors are demanding government assistance in improving their living conditions. (DJ)

July 30 Mobil announces that it has acquired a 26 percent stake in the giant Natuna natural gas field, located 800 miles north of Jakarta, Indonesia, in the South China Sea. Mobil joins Exxon, which owns 50 percent of the field, and Indonesia=s state oil company Pertamina, which has a 24 percent stake. Natuna was discovered in 1973 and is estimated to contain at least 45 trillion cubic feet of recoverable natural gas. (WP)

July 30 Occidental Petroleum Corporation announces that it has sold all of its oil interests in Congo back to the Congolese government for $215 million. Occidental=s production from its holdings in Congo amounted to 9,000 b/d during 1995. (WSJ)

August 1 Kuwait Oil Company (KOC) renews its technical service agreement with British Petroleum (BP). The new contract follows an original 1992 contract under which BP provided assessments of reservoir damage to Kuwait=s war-damaged oil fields. Under the new contract, BP will continue to provide technical support related to reservoir management and field development. Although Kuwait=s upstream is closed to private equity investment, two other major oil companies, Chevron and Shell, have similar technical service contracts. (OGJ, DJ)

August 1 State Oil Company of Azerbaijan (SOCAR) officials announce that a recently signed deal between Houston-based Brown & Root and Chevron=s Tengizchevroil venture will lead to exports of 20,000 barrels per day (b/d) of oil from the 5 billion barrel Tengiz oil field in Kazakstan to the Black Sea. Due to begin in October 1996, the exports will account for about 20 percent of the field=s production. Under the plan, oil will be shipped by barge from Aktau in Kazakstan across the Caspian. It subsequently will be carried by rail through Azerbaijan to Georgia=s Black Sea export terminal at Poti. Tengiz crude currently is exported through Russian pipelines to the Black Sea terminal of Novorossiysk. (PON)

August 4 Near the southeastern town of Georgievka in Kazakstan, a section of gas pipeline explodes, killing two people and temporarily cutting gas supply to the nation=s capital of Almaty. An investigation has begun to determine the cause of the blast. (DJ)

August 5 The Vietnamese government announces that it will raise import tariffs on a variety of refined petroleum products, beginning on August 15. The move is made after tax and tariff collection efforts fall below target levels. The price increase reverses recent attempts to lower imported product tariffs, some of which are as much as 60 percent of landed costs. (DJ)

August 6 President Clinton signs a new bill imposing sanctions on non-U.S. companies which invest over $40 million a year in the energy sectors of either Iran and Libya. Under the law, the President would be required to impose at least two of the following sanctions: import and export bans; lending embargoes from U.S. banks; a ban on U.S. procurement of goods and services from sanctioned companies,; and a denial of U.S export financing. The European Union has stated its opposition to the U.S. law and threatened retaliation. (FT)

August 8 In Norway, 280 members of the YS skilled workers= union threaten to strike unless an agreement on general working terms is reached with the Norwegian Oil Industry Association. The proposed strike would shut the Mongstad terminal, which handles crude oil from Norsk Hydro=s Troll and Statoil=s Heidrun fields as well as smaller deliveries from the Gullfaks and Statfjord production systems. The Mongstad terminal has a storage capacity of 8 million barrels. The strike also would close the 150,000 b/d Mongstad refinery, the country=s largest. (FT, DJ)

August 8 The United States withdraws its opposition to United Nations Resolution 986, which would allow Iraq to sell $1 billion worth of oil every 90 days for an initial period of 6 months. Under the plan, proceeds from the oil sales would be used for humanitarian purposes. In recent days, the United States had been the only nation on the 15-member U.N. Security Council to oppose the plan. It had done so ostensibly to ensure proper monitoring procedures were in place to allow for the equitable distribution of humanitarian supplies to civilians. (FT)

August 8 U.S.-based Unocal and the government of Turkmenistan sign a deal to build a $2-billion, 900-mile long pipeline to carry gas from Turkmenistan=s 45-trillion cubic foot Dauletabad gas field through Afghanistan to markets in Pakistan. The proposed pipeline will carry 1.9 billion cubic feet (Bcf/d) initially and 3.8 Bcf/d after final completion in 2002. Unocal and Saudi Arabia-based Delta Oil will hold an 85 percent stake in the project, with the Gazprom (10%) and Turkmenrusgaz (5%) holding the remainder. (DJ)

August 11 Australia-based BHP reportedly pulls out of negotiations with Iran, regarding construction of a $3-billion, 1.6-Bcf/d, 1,000-mile overland pipeline to carry gas from Iran=s South Pars gas field to Pakistan and possibly India. BHP=s withdrawal follows President Clinton=s passage of a new sanctions against Iran and Libya. (DJ)

August 12 India and Oman agree to set up a joint working group to evaluate the technical aspects of a proposed $5-billion, 810-mile, 2-Bcf/d natural gas pipeline between the two countries. In 1995, Oman Oil Company (OOC) officials stated that such a line, which would run offshore at depths of up to 13,000 feet, was not technically feasible. OOC also expressed doubts that Oman had enough gas reserves to support both the pipeline and Oman=s proposed liquefied natural gas (LNG) project. (DJ, PON)

August 16 Azerbaijan Foreign Ministry officials reject a recent Russian proposal to resolve Caspian Sea territorial issues by using a 1941 treaty between the Soviet Union and Iran as a starting point. Both Azerbaijan and Kazakstan oppose Russia=s plan to use the 12-mile territorial limit normally applied to international waters. The five Caspian states plan to meet in Askhabad in November 1996 to discuss their respective differences. (PON)

August 16 U.S-based Mobil agrees to pay $18.8 million for Petrolube, a state-owned Peruvian lubricants company. The sale represents one of the first in the Peruvian government=s efforts to privatize its downstream oil sector. (WT)

August 19 South Africa=s Minister of Mineral and Energy Affairs Penuell Maduna states that his government is discussing new oil supply arrangements with Saudi Arabia and Iraq in an effort to decrease South Africa=s dependence on Iranian oil imports. The majority of South Africa=s 230,000 b/d of oil imports come from Iran. Minister Maduna also added that another deal in which South Africa would allow Iran to store 15 million barrels of oil at a 45-million barrel facility near Cape Town was still under consideration, but that a number of environmental issues were still outstanding. (DJ)

August 20 A Dubai-based shipping company states that Iraq recently loaded a trial cargo of crude oil from the Mina al-Bakr terminal onto a 36,000-dwt tanker. Mina al-Bakr has four 400,000 b/d berths capable of handling very large crude carriers (VLCCs). In mid-1996, Iraqi officials stated that 1.2-million b/d capacity at the terminal had been restored. However, it is reported that mines and sunken ships in the terminal=s main shipping channel still present a danger to large tankers. Under U.N. Resolution 986, about half of Iraq=s limited oil exports would be shipped through Mina al-Bakr. (PON)

August 19 Malaysia=s state-owned oil company, Petronas, agrees to take a 30 percent stake in France-based Total=s $600-million project to develop Iran=s offshore Sirri A and E oil and gas fields. Total signed the development deal in July 1995, after the U.S. government barred U.S.-based Conoco from continuing advanced negotiations with Iran concerning the project. The recent farm-in by Petronas will require the Malaysian company to spend $180-million over a four-year period. It is unclear how the recently-passed U.S. sanctions on Iran will affect Petronas or Total. (PON)

August 20 Iran and Pakistan agree to build a $1-billion, 120,000-b/d refinery in western Pakistan. When completed, the proposed refinery will be supplied with Iranian crude oil. Both countries will have a 50 percent stake in the project, which still requires approval by Pakistan=s cabinet. (PON)

August 21 In Venezuela, a subsidiary of state-owned Petroleos de Venezuela (PdVSA), Corpoven, signs a memorandum of understanding (MOU) with U.S.-based ARCO. The MOU provides for a $3.5-billion joint venture to develop and upgrade roughly 200,000 b/d of crude oil from the country=s 270-billion Orinoco Heavy Oil Belt. The project will produce 9^oAPI gravity crude oil in the Hamaca region and upgrade it to 25^o API for export to U.S. refineries. The project will be implemented in three phases, the last of which will be completed in 2006. Another PdVSA subsidiary, Maraven, recently signed another, similar deal with Conoco. (PON, FT)

August 22 Nigerian Oil Minister Dan Etete states that National Nigerian Petroleum Corporation=s (NNPC) joint venture partners, which include Shell, Mobil, and Chevron, do not Ashow accountability and transparency@ in their operations. He states that the Nigerian government shortly will introduce a wide array of changes to day-to-day operations and accounting procedures which will provide Nigeria with a more equitable return from the country=s oil production. The move comes amidst delinquent payments by NNPC to its joint venture partners of almost $1 billion during the first half of 1996. Oil Minister Etete statements also occur after a World Bank review criticizes the Nigerian government for failing to account recently for $700 million in oil revenues. (DJ)

August 23 Argentina=s YPF reaches a preliminary agreement with the Ecuadorean government that would convert a services contract signed in the 1980s to a participation contract which provides the government with a greater return on oil production from the company=s field in Block 16 of the Oriente region. Several days earlier, the Ecuadorean government sent troops in to take control of the fields, which are operated by U.S-based Maxus, a YPF subsidiary. Output was cut from 34,000 b/d to 18,000 b/d. Most recent oil deals in Ecuador are participation contracts, which were introduced in the early 1990s. (PON, DJ)

August 24 Oman begins mediation of a territorial dispute between Bahrain and Qatar involving the potentially oil-rich Hawar islands and reefs. Qatar originally filed the case with the International Court of Justice (ICJ) in the Hague in 1991. Bahrain then rejected the ICJ=s jurisdiction. Subsequent mediation attempts by Saudi Arabia also failed. (DJ)

August 25 Equatorial Guinea begins commercial oil production with the start-up of its Zafiro field. With initial output of 7,000 b/d, the Mobil-operated Zafiro field is expected to reached a peak production of 40,000 b/d by the end of 1996. Mobil discovered the field in mid-1995 and brought the field on-stream through a fast-track plan which utilizes a floating production vessel. (PON)

August 27 In Congo, Exxon signs a production sharing contract (PSC) for the Mer Profund Nord concession, located 50-75 miles offshore in an area where water depths reach up to 6,000 feet. Exxon will begin seismic exploration in the 1-million acre block in early 1997. Exxon and Elf currently are involved in the development of the nearby Mer Profund Sud concession. Work on these concessions represents an important trend in deepwater exploration activity offshore West Africa as well as a significant part of Congo=s ongoing effort to boost its oil output above current levels with the addition of offshore fields. (DJ, OGJ)

August 28 In Colombia, the National Liberation Army (ELN), a rebel group which has fought the government for over 30 years, offers to suspend its attacks on the country=s oil infrastructure in exchange for a dialogue. The ELN historically has opposed foreign involvement in Colombia=s oil sector. In July 1996, it carried out a 23 bombings on oil pipelines in Colombia as a precursor to its peace initiative. State-owned Ecopetrol recently estimated that rebel bombings in 1995 caused $13 million worth of damage to Colombia=s oil pipelines. (DJ)

August 30 Iran and Turkey sign deal to export $23 billion worth of natural gas through a proposed 800-mile long Afriendship pipeline@ between the two countries. The deal comes amidst new U.S. sanctions on Iran. (FT)

August 30 The United States presents Aconclusive evidence@ to the U.N. Sanctions Committee that Iran is Acomplicitous in the smuggling of petroleum products@ from Iraq through the Persian Gulf. According to U.S. allegations, Iran uses barges and small ships to carry oil products from southern Iraq into Iranian territorial waters. Shipping documents then are forged to show that the cargo is of Iranian origin. (PON, NYT)

September 3 In Yemen, Oil Minister Mohammed Attar states that the country will raise its oil production from 350,000 b/d at present to 400,000 b/d by 2000. Initial boosts in output will come from the 27,000 b/d Jannah and 20,000 b/d East Shabwa fields, both of which are due to come online in 1997. (DJ)

September 3 Officials from Nigeria and Equatorial Guinea meet to discuss territorial rights concerning Equatorial Guinea=s Zafiro field, which Mobil recently brought online in a fast-track development program. The field currently produces about 10,000 b/d and is expected to reach an output level of 40,000 b/d in 1997. Nigeria previously had awarded Zafiro development rights to Elf. Nigeria also is in dispute with Cameroon over the oil-rich Bakassi Peninsula. A United Nation=s team is expected to depart soon for the region in the hopes of mediating a settlement. (DJ)

September 4 India=s Foreign Investment Promotion Board rejects four proposed oil and petrochemical projects, including Occidental=s plan to invest up to $2-billion in enhanced oil recovery (EOR) technology for the mature Bombay High field. About half of India=s oil production comes from the Bombay High region. Perceived endangerment to national security was one of the Board=s reasons for rejecting Occidental=s EOR proposal. (PON)

September 4 Trade press reports that Azerbaijani and Iranian officials still disagree over a construction timetable of a $70-million pipeline to supply Iranian natural gas to Azerbaijan=s enclave of Nakhichevan, which is separated from the majority of the country by Armenia. The two countries signed a pipeline construction agreement in 1992. However, further progress has been stalled by Iran=s refusal to accept oil products, rather than cash, from Azerbaijan for 8.8 billion cubic feet of Iranian gas already delivered to Nakhichevan. (PON)

September 5 Bolivia and Brazil sign a $1.8-billion natural gas export pipeline construction contract. Brazil=s state-owned Petrobras will oversee construction of the proposed 1,900-mile pipeline. Under the gas supply contract, Petrobras will purchase 280 million cubic feet per day (Mmcf/d) for the first seven years of the 20 year sales period. Gas purchase volumes will double after the first seven years. After coming online in late 1998, the pipeline=s first phase will link Santa Cruz, Bolivia with Campinas, Brazil. A second phase will extend the Brazilian line from Campinas to Porto Alegre by 1999. (DJ)

September 5 Following U.S. cruise missile strikes on military facilities in southern Iraq, crude oil prices rise as the market speculates when Iraq will begin exporting oil under U.N. Resolution 986. Benchmark Brent Blend for October rises above $22/barrel amidst the uncertainty. The U.S. attack follows an Iraqi-supported invasion of Kurdish safe haven areas in the country=s northern area. Subsequently, President Bill Clinton states that the U.N. oil-for-food sale should be postponed indefinitely. (DJ)

September 6 In Kazakstan, British Gas confirms that it will reduce its 42.5 percent stake in the giant Karachaganak gas field development project. Karachaganak, which is an extension of Russia's Orenburg field and located in the northwestern part of the country, contains about 46 trillion cubic feet (Tcf) of natural gas. In 1992, British Gas and Agip of Italy won a tender allowing them exclusive development rights to the field. Russia=s Gazprom later joined the project with a 15 percent stake. It is rumored that Lukoil will acquire any interest relinquished by British Gas. The Karachaganak project will require a total investment of $10 billion over 40 years. (DJ)

September 8 The Revolutionary Armed Forces of Colombia (FARC) launch a new series of attacks in the country, killing at least 23 people and blowing up a section of the 200,000-b/d Cano Limon-Covenas oil pipeline. The resulting pipeline rupture spills 8,000 barrels of oil. Since it came into operation in 1986, this strategic pipeline has been attacked over 400 times. (NYT)

September 9 Malaysia=s state-owned Petronas says that it will proceed with its contract to develop Iran=s offshore Sirri A and E oil and gas fields. After pressure from the U.S. government, Conoco withdrew from the project in March 1995. Subsequently, Total was awarded the development. Recently, Petronas acquired a 30 percent stake in the $600-million venture, which will develop the fields= estimated 600 million barrels of oil reserves. Peak production is expected to reach 120,000 b/d. In early 1996, Total was involved in talks with Dubai to ship 100 Mmcf/d of associated gas through a proposed 15-mile pipeline to link with the emirate's gas grid. Sirri gas then would be used for injection at Dubai's Fateh field. (DJ)

September 12 In Burma, Unocal and Total, the partners undertaking the 5.7-Tcf Yadana gas field development in the Gulf of Martaban, release the proposal=s feasibility study. A $700-million domestic project will complement a controversial 525-Mmcf/d gas export pipeline which will link the offshore field to Thailand. The domestic project, called the AThree-in-One,@ comprises a 90-mile gas pipeline link between the field and Rangoon, a 200-megawatt gas-fired power station, and a 1,750-ton per day urea fertilizer plant. Controversy over the gas export pipeline has been fueled by alleged human rights violations by Burma=s military government. Currently, a unilateral sanctions bill against Burma is pending in the U.S. Congress. (DJ)

September 16 The Norwegian Petroleum Directorate (NPD) states that it will aid Angola=s Ministry of Petroleum in formulating the country=s future oil development strategy. The NPD specifically will project future production levels and export revenues, advise on appropriate safety and environmental programs, and provide relevant legal assistance for Angola=s petroleum sector. The new agreement will last three years and follows previous cooperation activities under which Norway has advised Angola on topics such as deepwater oil production. (PON)

September 16 Representatives from Arco and Indonesia=s state-owned Pertamina travel to South Korea in the hopes of obtaining a long-term sales contract for a proposed two-train, 6-million ton per year liquefied natural gas (LNG) plant that would be located on Irian Jaya, in eastern Indonesia. The LNG plant would be fueled by Arco=s recently appraised Wiriagar discovery, which holds up to 12 Tcf of natural gas reserves. Although it contains a smaller reserve base, a Wiriagar LNG project potentially could be more economical than Indonesia=s current for the 45-Tcf (recoverable) Natuna LNG proposal, since the field holds high levels of high carbon dioxide. (PIW)

September 19 U.S. officials tell the International Court of Justice in the Hague that the United States should not be held liable for damages resulting from U.S. naval attacks on three offshore Iranian oil platforms during the Iran-Iraq war in 1988. The United States launched the attacks after Iran fired a Silkworm missile at a U.S.-flagged Kuwaiti tanker in 1987. That incident, along with another in which a U.S. frigate struck a mine in the southern Persian Gulf, resulted in injuries to U.S. naval personnel. The U.S. contends that the three oil platforms were armed military bases and used to facilitate Iranian attacks on neutral shipping during the war. Iran counters that the oil platforms were of Avital commercial and economic importance@ and targeted to inflict Amaximum financial, commercial, and economic damage.@ (DJ)

September 19 After extensive negotiating efforts by Unocal, Afghanistan=s main rebel factions sign an agreement to ensure the safety of a proposed 890-mile, 2-Bcf/d capacity pipeline which would carry natural gas from Turkmenistan=s 45-Tcf Dauletabad gas field to Pakistan. The proposed $2-billion pipeline tentatively would run from the Dauletabad field south to the Afghan border and through Herat, Qandahar, and Quetta, Pakistan. The line would then link with Pakistan=s gas grid at Sui. Gas shipments are projected to start at 700 Mmcf/d in 1999 and rise to 1.4 Bcf/d or higher by 2002. Following a memorandum of understanding signed in August 1996, a consortium of companies comprising Unocal and Saudi Arabia=s Delta Oil (85% combined), Russia=s Gazprom (10%), and state-owned Turkmenrusgaz (5%) is planning to build the line, but political risk, security, and financing concerns may stall the project. (DJ, PON)

September 20 In Russia, Arco signs several agreements with Lukoil to jointly invest $5-billion in energy projects over the next 18 years. The deals also create a new company, LukArco, which will be held jointly by Lukoil (54%) and Arco (46%). In late 1995, Arco bought an 8 percent stake in Lukoil. The recent moves will provide Arco with a prominent position in Russian upstream activities. (DMN)

September 20 After pressure from 20 multinational oil companies belonging to the Colombian Petroleum Association (CPA), the Colombian government agrees to review the terms of the sliding scale production sharing contracts which most foreign oil companies signed between 1989 and 1994. The contracts provide state-owned Ecopetrol with as much as 70 percent of the oil produced from large fields. The CPA states that the unfavorable terms have led to a decrease in exploration activated in Colombia. The government=s decision is made despite threats from the National Liberation Army (ELN), one of Colombia=s two insurgent factions, to assassinate Minister of Mines and Energy Rodrigo Villamizar if British Petroleum=s contract to develop the Volcanera, Pauto, and Florena fields was revised. (DJ)

September 25 In Nigeria, Finance Minister Anthony Ani states that the government should divest its majority equity interest in the country=s six main joint ventures with foreign oil companies. Minister Ani also says that the government should PSCs, under which companies would pay taxes and royalties directly to the government. Since 1993, Nigeria=s upstream oil sector has faced a continuing budget crisis, and financial resources allocated to Nigerian National Petroleum Corporation (NNPC) have been below those necessary to bring about an expansion of oil production capacity. (DJ)

September 25 In New York, visiting Colombian President Ernesto Samper states that a new 700 million barrel oil field has been discovered by state-owned Ecopetrol in central Colombia. Later, Ecopetrol President Luis Bernardo Florez says that while the field may contain as much as 600-700 million barrels of high-quality crude oil, further appraisal work is needed. If accurate, the find would raise Colombia=s proven oil reserves by 20 percent. (DJ)

October 2 Yemen=s Oil Ministry states that it is examining plans to build a 60,000 barrel per day (b/d) refinery at Ras Katnib, northwest of Aden. The $250-million refinery project would be financed by private investors from Yemen and the Persian Gulf. It would be the first private investment in Yemen=s oil industry. A second phase would raise the refinery=s capacity to 100,000 b/d. Yemen now has two refineries with a combined capacity of 110,000 b/d. The country=s current crude oil production is around 350,000 b/d, of which 80,000 b/d is consumed domestically. (DJ)

October 3 In Paris, Yemen and Eritrea sign an agreement to allow international arbitration of their territorial dispute over the Hunaish and Zuqar Islands. These islands are located in the Bab al-Mandab strait at the mouth of the Red Sea. The recent dispute flared in December 1995 after Eritrea forcibly took control of Greater Hunaish Island. In August 1996, Eritrea seized Lesser Hunaish Island, but withdrew after French mediation efforts. The Bab al-Mandab is a strategic shipping lane and also an area targeted for oil exploration by international companies. (MEES)

October 4 U.S.-based Unocal and France=s Total are sued in a federal court in Los Angeles for their alleged complicity in human rights abuses by Burma=s military government. The plaintiffs state that the two companies had knowledge that the military was relocating villages, using forced labor, and committing a variety of abuses during efforts to clear a path for an onshore natural gas export pipeline. The companies maintain that no such actions have occurred along the pipeline route and that local workers are paid above average wages. The pipeline is part of a $1.2-billion project to carry 525 million cubic feet per day (Mmcf/d) of gas from the 5.7-trillion cubic foot (Tcf) Yadana field to power companies in Thailand. Shipments will begin in 1998, after the anticipated completion of the onshore pipeline. (PON, DJ, FT)

October 4 Azerbaijan=s parliament ratifies the $4-billion Shakh Deniz field development. The project is being undertaken by a consortium comprising British Petroleum (25.5%), Statoil (25.5%), Elf (10%), Lukoil (10%), Iran=s OEIC (10%), and TPAO (9%). The offshore Shakh Deniz field contains an estimated 1 billion barrels of oil and up to 17.6 Tcf of natural gas. (PON)

October 4 In Irian Jaya, Indonesia, British Gas says that its Mogoi Deep-1 well on its Muturi concession resulted in flow rates of 40 Mmcf/d of natural gas. This find is the latest in a number of gas discoveries on the island in eastern Indonesia. U.S.-based Arco is planning to build a liquefied natural gas (LNG) plant on Irian Jaya. It would be supplied with reserves from Arco=s Wiriagar field, which may hold up to 12 Tcf of reserves. (PON)

October 8 Kuwait Oil Company (KOC) and Exxon sign a joint technical study agreement concerning possible development of the Karaa al-Maru oil field in northwestern Kuwait. The field contains estimated reserves of between 300-350 million barrels of light 49^o API oil. This would be the first development of oil fields in this region of Kuwait. While Kuwait=s upstream sector remains closed to foreign investment, several other foreign oil companies have technical service agreements with the government. These companies include British Petroleum, Chevron, and Royal Dutch/Shell. (PON)

October 8 Qatari Foreign Minister Harned Ben Jasem al-Thani states that his country has frozen all business dealings with Israel because of lack of progress in the Middle East peace process. Earlier in the year, Enron had proposed constructing a terminal at Eilat on the Gulf of Aqaba to receive LNG from the company=s planned project in Qatar. (PON)

October 8 After more than a year of review, Oman cancels its plans to build a $10-billion, 1-billion cubic foot per day (Bcf/d) pipeline to supply India with natural gas. The pipeline faced technical and cost problems, since it would have been laid at underwater depths of up to 13,500 feet. Also, Oman is planning to build an LNG export facility, and questions were raised as to whether the country=s gas reserves could support both projects. Oman=s proven gas reserves are around 25 Tcf. (FT)

October 9 In Congo, France=s Elf Aquitaine states that its Moho Marine structure may contain larger reserves than the

the 440-million barrel N=Kossa field, the country=s largest. The Moho Marine is located offshore and is under development by a consortium comprising Elf (51%), Chevron (30%), Hydro-Congo (15%), and Energy Africa (4%). In 1996, the Elf-led consortium brought N=Kossa online with 50,000 b/d of output. This has boosted Congo=s total oil production to around 225,000 b/d.

October 9 In southern Algeria, the Armed Islamic Group (GIA) blocks a road near Laghouat inside the Hassi R=Mel security zone and kills 34 people after their vehicles are stopped at a false police checkpoint. In April 1995, the government created four Aexclusion zones@ to protect oil and gas facilities and personnel in the producing centers of El Oued, Laghouat, Illizi, and Ouargla. Within these zones, traffic and shipments are regulated by army and police units. The conflict in Algeria, which began in 1992, has claimed an estimated 60,000 lives. (MEES)

October 9 In Venezuela, PdVSA President Luis Giusti announces that the state-owned oil company=s third round of marginal field bidding will involve 20 fields in Monagas, Anzoategui, and Western Venezuela. Giusti also states that this round will differ from the previous two in that it will involve already producing oil fields as well as those in need of secondary recovery technology. This third round marks continuing efforts by PdVSA to boost oil production above the current 3 million b/d. (PON)

October 10 Workers employed by Bolivia=s state-owned oil company, YPFB, stage a 24-hour strike to demand passage of a new land reform bill. The strike shuts down the country=s three refineries, which have a combined capacity of 45,000 b/d. (DJ)

October 11 In Georgia, the 11-member Azerbaijan International Operating Company (AIOC), which includes British Petroleum, Amoco, and Exxon, sign a pipeline engineering contract with John Brown Engineers and Constructors, a British subsidiary of Norway=s Kvaerner. The $300-million pipeline project will involve renovating an existing line that links Baku to Supsa, on the Black Sea. The pipeline will have a new capacity of 105,000 b/d and will be completed in 1998. It will be used to carry a fraction of the anticipated oil exports from AIOC=s $8-billion, 4-billion barrel Azeri, Chirag, and Guneshli field development. AIOC still has not reached a decision on the route for the main 700,000 b/d export pipeline. (WSJ)

October 14 After months of protests by workers, Mexico=s state-owned oil company, Pemex, cancels further plans to privatize its 61 state-owned petrochemical processing plants. Alternatively, Pemex plans to raise capital by creating subsidiaries to manage the 61 plants. Subsequently, it will sell off 49 percent of its ownership in the subsidiaries. A previous effort to sell the plants was canceled in 1992. (NYT)

October 16 In Geneva, the U.N. Compensation Committee rejects an Iraqi request to use revenues from the proposed oil sales under U.N. Resolution 986 to fund a legal defense against claims resulting from the 1991 Gulf War. Resolution 986 would allow Iraq to sell up to $1 billion worth of oil every six months. The deal originally was delayed by Iraq=s incursion into the Kurdish safe haven zone in September 1996. More recently, the United States has requested time to review the pricing structure for the Iraqi oil sales, money from which must be used for humanitarian aid. (DJ)

October 18 After four years of development, U.S.-based Occidental writesoff its $105-million investment in an exploration and production joint venture in the Komi Republic in Russia=s Arctic region. The move was made due to continued high taxes, tariffs, and transportation fees imposed by both Russian and local governments. In addition, the recent increase in world oil prices has resulted in decreased access to Russia=s export pipeline network by foreign ventures. (PON)

October 24 The Latvian parliament ratifies the government=s oil exploration deal with U.S.-based Amoco and Sweden=s OPAB. The agreement covers exploration of the offshore Dalders prospect, which is located in territory claimed by neighboring Lithuania. Lithuania=s government previously has stated that it will not respect the Amoco/OPAB agreement. If the dispute between the two countries is resolved, Amoco/OPAB plan to drill an exploratory well in early 1997. Exploration and appraisal costs could reach between $7-$30 million. (DJ)

October 27 The London-press reports that the favored solution for disposal of the Brent Spar oil storage platform is to turn it into a tourist attraction within the Morecambe Bay wildlife resort in Cumbria, England. The 30 proposals now under review by the U.K. government mostly involve onshore disposal and recycling. However, a British company, Amec, proposes cutting the Spar in two and creating a wildlife viewing platform that would include glass elevators. The 1996, Shell=s planned offshore disposal sparked controversy after Greenpeace claims, which were later retracted, that the buoy contained toxic waste. (DJ)

October 28 In the Falkland Islands, exploration licenses are awarded from the country=s first bidding round that was launched in October 1995. While 19 offshore tracts located north and south of the islands were on offer, companies only bid on seven northern concessions. Acreage was awarded to U.S.-based Murphy, Fina, International Petroleum Corporation, Clyde, Lasmo, and Sands Petroleum, among others. Neither British Gas nor Argentina=s YPF received acreage. The concessions offered in this bidding round are separate from the Special Area of Co-operation that recently was established between Britain and Argentina. This area lies to the west of the Falklands. (DJ, FT)

October 30 In Burma, a consortium comprising Texaco (50%), Premier (30%), and Nippon (20%) signs a memorandum of understanding (MOU) to supply Thailand with gas from Burma=s offshore Yetagun field. Under the terms of the MOU, the Texaco-led consortium will supply Thailand with 200 Mmcf/d of gas starting in 1999. Although the 1.5-Tcf Yetagun field is located to the southeast of Unocal/Total=s Yadana development, the field=s onshore pipeline segment will run in the vicinity of the Yadana pipeline. (FT)

October 30 Ukraine and Russia agree to negotiate a long-term gas deal which would fix supplies and prices over a 20-year period. At present, Ukraine owes Russia $1.4 billion for past gas deliveries. A supply deal for 1997 also has not been reached. In 1997, Ukraine hopes to increase its purchases of Russian gas to 2.06, up from 1.85 Tcf in 1996. (DJ)

October 30 Exxon confirms that it is in talks with state-owned Qatar General Petroleum Corporation concerning the application of new technology to convert natural gas to petroleum products. Exxon believes that technology developed in a successful 200-b/d Anatural gas refinery@ project in Texas would work in Qatar, where a proposed $1-billion plant would be able produce between 50-100,000 b/d of middle distillate products. Under the proposal, Qatar=s 270-Tcf North field would supply between 0.5-1 Bcf/d of gas for use as feedstock. In the past, technological barriers and high costs have precluded the development of natural gas refineries. (WSJ)

November 1 The $2.3-billion Gazoduc Maghreb-Europe (GME) pipeline begins its first gas deliveries between Algeria=s Hassi R=Mel gas field and Cordoba, Spain. By the end of 1998, Algeria is planning to boost the GME=s capacity to 935 million cubic feet per day (Mmcf/d), up from 695 Mmcf/d currently, in order to supply markets in Spain, Portugal, Morocco, France, and Germany. (FT)

November 4 Italy=s state-owned ENI discloses that it signed a $3-billion natural gas production and supply deal with Libya in June 1996. The deal covers development of the offshore NC-41 block and the onshore Wafra field. ENI plans to bring the areas online by 2000, with gas production flowing to Italy via a proposed underwater pipeline. Reserves in the two areas are estimated at 600 million barrels of oil equivalent. Production potential at the NC-41 block and Wafra field is estimated at 575 Mmcf/d and 195 Mmcf/d, respectively. The United States government recently implemented additional sanctions against Libya which bar new investments of more than $40 million by non-U.S. companies. However, ENI representatives state in a MEES interview that U.S. sanctions will not have an Aadverse material effect@ on the project. (DJ, MEES)

November 4 Turkish Prime Minister Necmetten Erbakan states that Iranian natural gas shipments to Turkey will begin Awithin a year at the latest@ under the recently signed 22-year, $20-billion gas supply deal between the two countries. The agreement, which calls for delivery of up to 350 Mmcf/d of Iranian gas to Turkey, has met with U.S. criticism for providing financial support to the Iranian economy. Turkey=s demand for natural gas is expected to quintuple by 2010 to 2.9 billion cubic feet per year (Bcf/d) (DJ).

November 5 British Petroleum Exploration (BPX) requests Colombia=s Prosecutor General to investigate the source of recent media reports that accuse the company of violating human rights and supporting paramilitary groups in eastern Colombia. In October 1995, several London newspapers reported the accusations from an unofficial study purportedly conducted by the Colombian presidency=s human rights office. BPX strongly denies the allegations. (DJ)

November 6 In Greece, government anti-terrorism units arrest 16 Greenpeace activists who block entry to Motor Oil=s 100,000 b/d coastal refinery at Ayioi Theodori. The Greenpeace protest is in response to a large spill that occurred during loading operations in August and added to already high pollution levels in the Saronic Gulf. Motor Oil is owned jointly by Saudi Aramco and Greece=s Vardinoyannis. (DJ)

November 7 An illegal oil depot explodes in eastern Thailand, killing 11 and injuring 17 people. The depot, located in an unpopulated area near Rayong, served as a storage area for smuggled shipments of refined products from Singapore. (DJ)

November 8 In Baku, officials from Azerbaijan, Ukraine, and Kazakstan meet to discuss a possible export and refining deal for crude oil from Kazakstan=s Tengiz oil field. Under Ukrainian proposals, crude from Tengiz would be shipped by tanker across the Caspian through Duybend, Azerbaijan to Batumi, Georgia. From there, the oil would be carried by tanker to Ukraine=s 80,000-b/d refinery at Odessa. An alternate method under consideration would be use rail transport through the Caucasus through Russia to Ukraine. (PON)

November 8 Namibian Minister for Trade and Industry Hidipo Hamutenya states that a well recently drilled by Royal Dutch/Shell proves that gas reserves at the offshore Kudu field are in excess of 3 trillion cubic feet (Tcf) and could be as large as 7 Tcf. Shell has declined to comment on the field=s size. Both Namibia and Shell are hoping that Kudu=s reserves are sizable enough to justify a $670-million project to build a 250-Mmcf/d pipeline to export gas to landfall at Orangemund and eventually on to South Africa. (WGI)

November 12 The Algerian daily newspaper ALe Matin@ reports that state-owned Sonatrach and British Petroleum (BP) are discussing the feasibility of a third Algerian gas export pipeline to Europe. Currently, Algeria exports natural gas to Europe through the newly-inaugurated GME, the Transmed pipeline linking Algeria to Italy, and via liquefied natural gas (LNG) tankers. BP is seeking an outlet for future production from its gas fields in the In Salah region, which contains proven reserves of at least 7 Tcf. Through 2000, Italy and France are expected to remain the largest purchasers of Algerian gas, with 47 percent and 20 percent shares of Algeria=s gas exports, respectively. Through 2020, the European Commission has forecast that Algerian exports will not exceed a 25 percent share of the European gas market. (DJ)

November 14 In Abuja, Nigeria, officials from Benin, Togo, Ghana, and Nigeria meet to discuss a proposed $260-million West Africa gas project which would supply Nigerian natural gas to regional markets. Chevron and Royal Dutch/Shell are in competition to construct the export pipeline associated with the project. The gas project would be aimed at lessening the region=s dependence on oil imports and hydroelectric power. While Nigeria has insisted that its gas reserves be used, Ivory Coast and Ghana have proposed using gas resources located in their offshore Foxtrot and Tano fields, respectively. (DJ)

November 14 In response to the slow pace of the Middle East peace process, Israel is cut out of two separate gas export pipeline proposals. In the first project, Italy=s ENI decides to invest $2 billion in the next 30 months to build a 960-Mmcf/d underwater pipeline to carry gas from Egypt to Turkey. ENI=s original Apeace pipeline@ would have run between Port Said, Egypt to Haifa, Israel, via the Gaza strip. In the second project, U.S.-based Amoco signs an agreement with the governments of Egypt and Turkey to build a $2-$4 billion LNG export plant to transport Egyptian gas to Turkey. The LNG plan replaces an earlier Amoco proposal to build an Egypt-Israel gas export pipeline that would have competed with ENI=s peace pipeline. (WP, WSJ)

November 14 European Union (EU) trade counselor Bernd Langeheine states that the EU has legislation ready that would block implementation of U.S. sanctions on European companies which invest in expropriated U.S. property in Cuba or in Iran and Libya=s oil sectors. The official says that if the United States invokes Article 21 (the national security exemption) under the General Agreement on Tariffs and Trade (GATT), the EU would easily win any subsequent challenge brought before the World Trade Organization (WTO).

November 17 Iraq=s National Assembly approves a proposal by China National Oil and Gas Exploration and Development Corporation to develop the small al-Ahdab oil field, which is located near the giant East Baghdad field. While several French and Russian oil companies have conducted negotiations for the development of oil fields in Iraq, the deal for al-Ahdab is the first that has actually been signed. Existing U.N. sanctions forbid foreign investment in Iraq=s oil sector. (DJ)

November 18 In Kazakstan, the Caspian Pipeline Consortium (CPC) approves a $1.5-billion plan to build an export pipeline linking Chevron=s 10-billion barrel Tengiz oil field in western Kazakstan with Novorossiysk, Russia=s oil export terminal on the Black Sea. Under the plan, a 560,000-b/d pipeline would be built by 1999, with an expansion to 1.37 million b/d occurring at a later date. Until recently, Chevron restricted output at the field to 60,000 b/d because of lack of space on existing Russian export pipelines. Current production is around 120,000 b/d and soon will be lifted to 180,000 b/d. In 1996, Chevron has tested alternative methods of exporting Tengiz crude, including the use of a swap arrangement with Iran and tanker and rail shipments across the Caspian and through Georgia, respectively. After a corporate restructuring anticipated for April 1997, CPC will include the governments of Russia, Kazakstan, Oman, Chevron, Mobil, Oryx, British Gas, Agip, Lukoil, and Rosneft, among others. (DJ, FT)

November 25 An Exxon-led consortium signs a memorandum of understanding (MOU) with the Chadian government to develop an estimated 900 million barrels of oil reserves in the Doba basin, located near Chad=s southern border with the Central African Republic and Cameroon. The proposed $3-billion development will include drilling 300 new wells and constructing a 650-mile, 30-inch pipeline across southern Chad to Kribi, Cameroon on the Atlantic coast. Peak production potential from the area is projected at 200,000-250,000 b/d. The development consortium comprises Exxon (through its affiliate Esso Exploration & Production Chad)(40%), Societe Shell Tchadienne de Recherches et d=Exploitation (40%), and Elf Hydrocarbures Tchad (20%). (PON)

November 26 The United Nations and Iraq announce a final agreement on the long-awaited deal that would allow Iraq to sell up to $2 billion of oil every six months in exchange for food and other humanitarian supplies. Implementation of the deal recently has been delayed because of Iraq=s invasion of Kurdish safe haven areas in September and the U.S. review of the pricing formula in October. Iraqi oil exports under U.N. Resolution 986, which would be between 500,000-550,000 b/d with current oil prices, are expected to begin in December 1996, after metering equipment is installed on the Kirkuk-Ceyhan pipeline and U.N.-approved observers are positioned in Iraq to monitor oil flows. (NYT, FT)

November 27 Russia=s Interfax news agency reports that a $1.5-billion oil development deal will be signed between the State-Owned Oil Company of Azerbaijan (SOCAR), Amoco, Unocal, Saudi Arabia=s Delta Oil, and Japan=s Itochu in mid-December 1996. The deal will include the development of the Caspian Sea=s Dan Ulduzu and Ashrafi oil fields, which are estimated to contain combined reserves of 730 million barrel and 3 Tcf. (DJ)

November 28 The Prime Ministers of Russia and Poland inaugurate the first 65-mile segment of the proposed 3,100-mile Yamal gas export pipeline. In August 1995, the Polish government gave approval for the $2.5-billion, 400-mile Polish segment of the Yamal pipeline, which has an initial capacity of 475 Mmcf/d. Ultimate Yamal pipeline gas shipments to Europe are expected to reach over 5.5 Bcf/d by 2010. This gas is targeted for export in 1998 to European markets via seven parallel gas pipelines running from Yamal to Belarus, Poland, and Frankfurt/Oder, Germany. However, continuous permafrost conditions and environmental concerns have raised development costs, and total project investment may exceed $12 billion. Russian gas exports now satisfy about 25 percent of European gas demand. (DJ)

November 29 France=s nation-wide truckers= strike enters its twelfth day, causing up to 5,000 gas stations either to run out of or to run low on gasoline stocks. Consequently, half of France=s 90 departments have put gasoline rationing measures in place. Striking truckers also set up roughly 250 roadblocks on French highways, which lead to the disruption of agricultural shipments from neighboring countries. In order to end the strike, the government proposes meet truckers= demands to lower the early retirement age to 55. (DJ)

November 29 In Vienna, the Organization of Petroleum Exporting Countries (OPEC) agrees to roll-over its current quota of 25.33 million b/d. This quota was established at the Organization=s last meeting in June 1996 and allows room for Iraq to produce 1.2 million b/d. Without Iraqi exports under U.N Resolution 986, independent analysts have estimated that OPEC member countries are producing between 1.2-1.5 million b/d in excess of the aggregate quota. The majority of this overproduction comes from Venezuela. (WP)

December 1 The London press reports that the al-Yamamah oil-for-arms deal between British Petroleum (BP), Royal Dutch/Shell, and Saudi Arabia will not be renewed in 1997. Under the arrangement, BP and Shell earn roughly $30 million per year in commission from their combined sales of 400,000 barrels per day (b/d) of Saudi oil. During the past 10 years, earnings from the oil sales are deposited in a Bank of England account to pay British Aerospace for weapons purchases by Saudi Arabia. (DJ)

December 2 In northeastern India, a bomb blast damages two regional crude oil pipelines. The main line and a loop line have a combined throughput of 100,000 b/d. The United Liberation Front of Assam is believed responsible for the blast. The disruption of crude flows does not affect refinery operations in Assam. However, the 13,000-b/d Digboi refinery is closed after a small, unrelated fire in one of the plant=s two crude distillation units. (DJ)

December 3 After bad weather causes high swells, Petroleos Mexicanos (Pemex) shuts its three largest ports on the Gulf of Mexico. The temporary closures of the ports at Cayo Arcas, Pajaritos, and Dos Bocas add pressure to already high world oil prices and aid in boosting crude oil futures for West Texas Intermediate to $24.80/barrel. During the first 10 months of 1996, Mexican oil production averaged 2.85 million b/d. Roughly 1.5 million b/d of this output is exported through Pemex=s ports on the Gulf of Mexico. Mexico currently is the third largest source of U.S. oil imports, behind only Venezuela and Saudi Arabia. (DMN, NYT)

December 3 Petroleos de Venezuela (PdVSA) decides to postpone the multi-billion dollar Cristobal Colon liquefied natural gas (LNG) project for at least five years. The project would have involved a consortium of companies comprising PdVSA=s subsidiary Lagoven (33%), Exxon (29%), Shell (30%), and Mitsubishi (8%). The proposed LNG plant would have produced 1 billion cubic feet per day (Bcf/d) of gas from the 11 trillion cubic feet (Tcf) of reserves in Venezuela=s Paria Peninsula. The decision to postpone the project is made because of currently low world gas prices which make the project uneconomical. (PON)

December 5 Near Urkutsk in eastern Siberia, a distillation unit under repair at the 464,000-b/d Angarsk refinery explodes, killing three and hospitalizing four workers. (DJ)

December 5 Saga Petroleum, Norway=s largest independent oil company, purchases Kuwait Petroleum Company-owned Santa Fe Exploration for $1.23 billion. Santa Fe has stakes in six producing North Sea oil fields, including Miller, Alba, and Gryphon. It also has a nine percent share in the Britannia gas field development. The acquisition will raise Saga=s North Sea oil production from current levels of 50,000 b/d to 190,000 b/d. (FT, WSJ)

December 6 Chevron and Mobil sign separate agreements to restructure the Caspian Pipeline Consortium (CPC) contract. Both of the companies agree to exercise their respective rights to boost their equity interest in CPC. After the contract revisions, the largest stakes in CPC will be held by Russia (24%) and Chevron (15%). Mobil also will hold a 7.5 percent interest in the $2-billion project to link Kazakstan=s Tengiz oil field to an export terminal near Russia=s Black Sea port at Novorossiysk. (DJ)

December 6 Canada-based Arakis Energy states that a consortium has been formed to build a $1-billion export pipeline linking oil fields in southern Sudan to Port Sudan on the Red Sea coast. The consortium will comprise China National Petroleum Corporation (CNPC)(40%), Malaysia=s Petronas Carigali (30%), Arakis (25%), and a Sudanese government-owned company (5%). Assuming financing can be obtained, Arakis hopes to begin initial exports of 150,000 b/d by 1999. (DJ)

December 6 Following a week-long strike by 400 employees of Shell Gas (Lanka) Ltd. last month in Sri Lanka, the company says that is has agreed to a wage supplement plan which will ensure continuous operations for the next three years. Prior to the deal, the strike had severely hurt liquefied petroleum gas (LPG) production and distribution in Sri Lanka. (DJ)

December 9 The United Nations approves U.N. Resolution 986, which allows Iraq to export up to $1 billion worth of oil every 90 days for an initial six month period. Income from the oil sales will be used in part for food and other humanitarian supplies. Implementation of the deal recently has been delayed because of Iraq=s invasion of Kurdish safe haven areas in September and the U.S. review of the pricing formula in October. (DJ)

December 10 Turkey=s semi-official Anatolia news agency announces that Energy Minister Recai Kutan will soon sign a LNG purchase agreement with Yemen=s Prime Minister Abdulaziz Abdulghani. The deal adds Turkey to the list of customers for the $4.2-billion LNG plant proposed by a consortium comprising Total, U.S.-based Hunt Oil, Exxon, South Korea=s Yukong, and the Yemeni government. The LNG plant will utilize reserves from the 16-Tcf Marib and al-Jawf regions. The area=s current oil production is around 170,000 b/d. (DJ)

December 14 Azerbaijan and a consortium of foreign oil companies sign a $2-billion deal to develop the Dan Ulduzu and Ashrafi oil and gas fields in the Caspian Sea. The two fields hold estimated combined reserves of 1.1 billion barrels of oil and at least 1 Tcf of gas. The consortium comprises the state-owned oil company of Azerbaijan (SOCAR)(20%), Amoco (30%), Japan=s Itochu (20%), and a partnership between Unocal and Saudi Arabia=s Delta (30%). (DJ)

December 16 The U.S. Department of State releases the guidelines for non-U.S. companies to follow in order to comply with the Iran and Libya Sanctions Act, which penalizes foreign firms that invest in the oil and gas sectors of those two countries. Since the Act was passed in August 1996, several pertinent developments have occurred, including investments by Total and Petronas in Iran=s offshore oil sector, ENI=s planned investment in Libyan gas field development, and Turkey=s recent signature of a long-term, $22-billion gas purchase agreement with Iran. (DJ)

December 16 A consortium comprising Texaco (30%), Exxon (30%), Amoco (20%), and Norsk Hydro (20%) sign a protocol production sharing agreement (PSA) for development of an estimated 2.2 billion barrels of recoverable reserves in 11 area fields in Timan-Pechora's Varandey region near the Barents Sea coast. A final agreement is expected to be signed in early 1997. Current plans foresee investments of $45 billion over the 50-year project life. Although stalled in mid-1996, talks that might allow Rosneft and another Russian partner to acquire a 20 percent stake in the project reportedly are continuing. (DJ)

December 17 A U.N. panel rules that Kuwait Oil Company will receive $610 million, almost two-thirds of the $951 million it claims to have spent while extinguishing oil fires left by the retreating Iraqi army in 1991. In addition, the United Nations has approved 862,000 claims amounting to $3.2 billion for people forced to leave Kuwait because of the Iraqi occupation. (DJ)

December 17 Following the resignation of PetroPeru head Armando Echeandia, PetroPeru officials announce that key parts of the company, including the 62,000-b/d Talara refinery, will remain under government control. Originally one of the first targets for privatization, the Talara refinery has had its sale date pushed back three times. Until this announcement, roughly 60 percent of its shares were slated for auction in April 1997. While chief of PetroPeru, Echeandia had been a supporter of the company=s privatization efforts. (DJ)

December 18 Nigeria=s Liquefied Natural Gas (NLNG) Company sues ENEL, Italy=s state electricity utility, for withdrawing from a $15-billion contract to purchase Nigerian LNG for a 20-year period. NLNG is planning to build a $3.8-billion, 5.2-million ton per year (Mmt/y) LNG plant at Finima, on Bonny Island. NLNG consortium members are NNPC (49%), Shell (25.6%), Elf (15%), and Agip (10.4%). Prior to its decision not to build a LNG receiving terminal at Montalto di Castro on the Tuscany coast for economic and environmental reasons, ENEL had agreed to purchase 2.75 Mmt/y, or about half of NLNG=s currently contracted future LNG sales. (FT, DJ)

December 18 During a press conference, Iranian Deputy Foreign Minister Abbas Maleki states that Iran supports Athe free flow of oil@ through the Strait of Hormuz, but reserves the option of closing off the shipping route if it is threatened. Iran recently has admitted to deploying anti-aircraft and anti-ship missiles on Abu Musa, an island strategically located near the Strait of Hormuz=s shipping lanes. (DJ)

December 19 After recently signing a large 20-year gas supply contract, Turkey and Iran announce plans to begin feasibility studies for the construction of a pipeline to carry Iranian crude oil for export from Iskenderun on Turkey=s Mediterranean coast. The two countries also agree to renew their annual $600-million oil sales agreement, which expires in April 1997. (DJ)

December 20 Clashes between the Front for the Liberation of the Enclave of Cabinda (FLEC) and Angolan government troops continue as the respective forces attempt to capture territory previously held by the National Union for the Total Independence of Angola (UNITA). According to a FLEC spokesman, a succession of recent clashes has resulted in more than five dozen deaths and has injured more than 100 combatants. About 60 percent of Angola=s production of 700,000 b/d of oil occurs offshore Cabinda. (DJ)

December 23 After two years of discussions, Qatar Liquefied Gas Company (Qatargas) signs a 12-year, $570-million loan deal with four international banks. The loan will be used to help finance a $6-billion, 6-Mmt/y LNG plant, which will consist of three LNG trains supplied by gas from the 270-Tcf North Field. Japan=s Chubu Electric has contracted to receive 4 Mmt/y of the project=s anticipated LNG production. The Qatargas consortium partners are Qatar General Petroleum Corporation (QGPC)(65%), Mobil (10%), Total (10%), and a group of Japanese companies (15%). The Qatargas loan agreement follows a recent $1.2-billion loan deal obtained by competitor Ras Laffan Liquefied Natural Gas Company (Rasgas), which also is planning to build a LNG plant in Qatar. (FT, DJ)

December 30 The United Nations announces that a total of 21 contracts have been approved for the limited Iraqi oil sales under U.N. Resolution 986. The approved contracts will allow for 43.68 million barrels of oil to be exported in the first 90 days of the sale. At present, exports of 26.37 million barrels have been approved for the second 90-day period of the sale, which allows Iraq to sell up to $1 billion worth of oil every 90 days for an initial 6-month period. In mid-December 1996, Iraq restarted the Kirkuk-Ceyhan pipeline, which is expected to carry up to 450,000 b/d of oil under the sales agreements approved so far under U.N. Resolution 986. Iraq=s remaining oil exports will flow through the Mina al-Bakr terminal. (NYT, DJ)