January 5 France's Total SA reports that it has successfully tested a new well in Block 14 offshore Cabinda, Angola. The new discovery, called Landana, produces 7,300 barrels per day of 36-degree API crude oil, encouraging Total and its partners to continue with three more exploration wells in 1998. Total holds 20 percent of Block 14, with Chevron Corporation holding 31 percent, Angola's national oil company Sonagol 20 percent, Italy's Agip 20 percent, and Petrogal 9 percent. (DJ)

January 7 Due to the continuing Asian economic crisis, South Korea's refiners have reportedly cut operations to around 80 percent of capacity. The refiners have also had difficulty securing crude oil supplies for delivery in late January or February, which could cut operations to as low as 70 percent-75 percent of capacity. (DJ)

January 8 Elf Exploration Angola, a unit of France's Elf Aquitaine, and its partner Socieded Nacional de Combustiveis de Angola begin production of 9,500 barrels of oil per day from the Oombo field, located offshore Angola. Elf Exploration operates the field and holds a 50 percent interest. (DJ)

January 9 Premier Oil PLC announces that it has made a significant gas discovery in the Natuna Sea, Block A, Indonesia. After four drill tests produced a combined flow rate of 43 million cubic feet of gas per day, Premier has suspended the Pelikan-1 as a future producer. The Pelikan-1 well is located about 31 miles from the Anoa oil production platform, and it follows a gas discovery at the Gajah Puteri well drilled in late 1997. The oil rig will now move to another location in the block to drill the Adik Anoa oil and gas prospect. Premier operates Block A, holding a 66.67 percent interest, with Kuwait Foreign Exploration Company holding the remaining 33.33 percent interest. (DJ)

January 9 Shell Philippines Exploration, a unit of Royal Dutch/Shell and its partner Occidental Philippines, a unit of Occidental Petroleum Corporation, sign two gas supply agreements for the Malampaya natural gas-to-power project in the Philippines. The first agreement is with First Gas Holdings, a company 40 percent-owned by British Gas. The agreement calls for 1.46 trillion cubic feet of natural gas to be sent over a 20-year period to two power plants that will be built by First Gas. Initial delivery is scheduled to begin January 1, 2002. The second agreement is with National Power Corporation of the Philippines. It is a 20-year agreement beginning January 1, 2002, to supply gas to a turbine power plant to be built at Ilijan, Batangas. Total financing for the gas-to-power project is around $4.5 billion which will cover the development of the offshore subsea gas production wells, the construction of a 317-mile offshore pipeline and shore terminal, and the construction of the three power plants. (DJ)

January 12 The Albanian government awards oil exploration blocks to two international oil consortia, one led by Austria's OMV and the other led by an Albanian subsidiary of Occidental Petroleum. OMV and its United Kingdom partners Enterprise Oil and Clyde Gas have received two blocks in the south and one in central north Albania. Meanwhile, Occidental and its partner International Petroleum Corporation have received two blocks in the south and one in the north. Although the production-sharing agreements still need to be approved by the Albanian government, drilling is expected to begin in mid-1998. (DJ)

January 12 After running aground in rough seas near the United Arab Emirates on January 7, 1998, a sunken barge has spilled about 28,000 barrels of fuel oil into the Persian Gulf, . The spill created a 5 mile by 2 mile oil slick along the coastline of the northern emirate of Umm Al Quwain. International environmental experts have teamed with the Emirates Coast Guard, the Federal Environment Authority and the Abu Dhabi National Oil Company in cleanup efforts. (DJ)

January 13 Japan's Mitsubishi Petroleum Development Company begins oil production from a well in Block 3/91, located 25 miles off the coast of Angola. Daily output from the well is estimated at 9,500 barrels, with the concession expected to yield a total of around 15 million barrels of crude oil. (DJ)

January 14 In a show of support for Richard Butler, chairman of the United Nations (U.N.) Special Commission on Iraq, the U.N. Security Council unanimously approves a statement deploring Iraq's recent actions to impede inspections by U.N. weapons monitors. (DJ)

January 14 China National Offshore Oil Corporation and Norway's Statoil begin production from the Lufeng 22-1 oil field. Lufeng 22-1 is the deepest oil field in the South China Sea and is currently producing about 60,000 barrels per day. (DJ)

January 14 Iraq begins exporting crude oil under the third phase of the United Nations sponsored oil-for-food program. First loadings are filling the million barrel tanker White Sea for French oil company Elf Aquitaine. Other companies expected to lift Iraqi crude in January include France's Total, Italy's Agip, Russia's Lukoil, and China's Sinochem. (DJ)

January 15 Environmentalists hail the implementation of a 50-year moratorium on mining and oil exploration in the Antarctic. A protocol for the protection of the Antarctic was adopted by twenty-six countries in 1991, but it could not be implemented until Japan's ratification cleared the way last month. Antarctica contains 70 percent of the world's fresh water, and the moratorium attempts to preserve the world's least polluted continent. (WP)

January 19 Elf Exploration Incorporated, a subsidiary of France's Elf Aquitaine announces the development of its Virgo discovery located in the Gulf of Mexico off the coast of Louisiana. The next step for Elf and its partners is to construct a drilling and production platform that will have a daily production capacity of 120 million cubic feet of gas and 15,000 barrels of oil. Elf Exploration holds a 64 percent interest in the license with Coastal Oil and Gas 16.2 percent, Pogo Producing Company 10.8 percent, and Nippon Oil Exploration USA Limited 9 percent. (DJ)

January 19 Bohai Petroleum Company, a unit of China National Offshore Oil Corporation, begins production from the Boxi Oil field located in the Bohai Sea. The field's reserves are estimated at more than 37 million barrels of oil and about 353 billion cubic feet of natural gas. (DJ)

January 19 Gazprom, Russia's giant natural gas company, signs a $340 million agreement with Poland designed to help repay Poland's $200 million debt to Gazprom and to finance the Jamal-Europa gas pipeline. Under the agreement, Poland will give Gazprom $175 million worth of goods and services. The other $165 million will finance the construction of the pipeline, which will cross Russia and Eastern Europe into Western Europe. The Polish section of the pipeline is expected to be completed later this year. (DJ)

January 20 Russia's second and seventh largest oil concerns, AO Yukos and AO Sibneft, announce a merger to create a new company to be named AO Yuksi. In terms of reserves, Yuksi will surpass Royal Dutch/Shell Group as the world's largest private oil company and rank third behind Shell and Exxon Corporation in terms of production. Yukos's shareholders will take a 60 percent share in the new company, with shareholders from Sibneft controlling the remaining 40 percent. (WSJ)

January 21 Following a speech last week by Luis Giusti, president of state-owned Petroleos de Venezuela, in which he claimed that Saudi Arabia has been producing 9.12 million barrels of crude oil per day and that its overproduction has led to falling oil prices, Saudi Arabia defends itself stating that it is abiding by its new OPEC production quota of 8.76 million barrels per day. Giusti also said that Venezuela is currently producing 3.3 million barrels per day, which is about 25 percent over its OPEC quota of 2.583 million barrels per day, and that production will reach 3.6 million barrels per day in 1998. (DJ)

January 22 Statoil, Norway's state-owned energy company, reports that 10 drilling services contracts have been awarded to companies holding production sharing contracts in the Caspian Sea off the coast of Azerbaijan. The 10 contracts, worth $110 million, have been awarded to Azdri MI, Schlumberger, Geoservices, Oceaneering, Baker Hughes Intec, Franks International and Security DBS. The first exploration well in the Shah Deniz area, where Statoil holds a 25.5 percent interest, is scheduled to be drilled in June 1998. (DJ)

January 25 Toyota Motor Corporation announces that it will attempt to introduce its hybrid electric/gasoline-powered Prius compact simultaneously in the United States and Europe in the year 2000. This new hybrid system generates half the carbon dioxide of a gasoline engine and reduces emissions of other toxic substances such as nitrogen oxides. The Prius was introduced in Japan in December 1997, and sales have been strong, with 3,500 orders received in the first month. (DJ)

January 26 The Algerian Energy Council adopts a series of measures designed to strengthen Algeria's oil and gas industry, including the opening of the refining, petrochemical, and fertilizer sectors to foreign investment. (DJ)

January 26 Delegates from OPEC's Ministerial Monitoring Committee hold an emergency one-day meeting to discuss falling oil prices. The delegates agree that OPEC's crude oil output is above the 27.5 million barrels per day ceiling by at least 500,000 barrels per day, but less than 1 million barrels per day. The delegates also say that there is little OPEC can do to lift oil prices soon outside of recommending strict adherence to production quotas or possibly cutting production. (DJ)

January 27 Su Shulin, Executive Deputy Director of the Daqing Petroleum Management Bureau, states that China's largest oil field, Daqing, will maintain annual crude production of around 100,000 barrels per day through 2010. Proven reserves in the field are said to be around 40 billion barrels. (DJ)

January 28 Amoco Corporation announces a crude oil discovery at its Immortelle oil field, located 34 miles off the east coast of Trinidad. This represents Amoco's largest crude oil find in Trinidad in 25 years. Reserve estimates range between 40 and 70 million barrels, and as many as eight wells could be drilled by the end of the year. [Editor's note: EIA estimates Trinidad oil production for 1997 at 124,000 barrels per day.] (DJ)

January 29 Hungarian oil and gas company MOL renews an agreement with Nafta Industria Srbia (NIS) to ship Russian natural gas to Serbia. Under the agreement, MOL will ship 99 billion cubic feet of Russian gas across Hungary from the border with Ukraine to the Hungarian-Serbian border in 1998. Annual gas shipments to Serbia will gradually increase over the course of the agreement eventually reaching 134 billion cubic feet in 2002. Over the next 20 years, MOL expects to ship a total of at least 2.6 trillion cubic feet of gas to Serbia. In addition, MOL is set to develop a pipeline system to deliver natural gas to Bosnia. MOL says it will invest around $77 million in the new system and expects to have it in service by the year 2000. (DJ)

January 31 New York, Massachusetts, Vermont and Maine have decided to hold out for California's zero emission standard for cars rather than join the federal National Low Emission Vehicle program. Under the federal program, automakers will agree to begin producing cars that will significantly reduce the amount of smog-producing emissions if all 13 northeastern states will agree not to adopt California's tougher standard. The automakers say that the new cars would be 70 percent more effective in eliminating emissions of hydrocarbons and 50 percent more effective in reducing emissions of oxides of nitrogen. The cleaner cars could be available in the northeast as early as this year and nationally by 2000. Many federal officials and some automakers believe that the auto industry will agree to the new program even without participation from all 13 states. The automakers have until February 17 to decide whether they will go along with the National Low Emission Vehicle program. (WP) 

February 1 A U.S. federal judge denies a preliminary injunction requested by civil rights lawyers that would have removed California-based Unocal Corporation from a $1.2 billion pipeline project in Burma. The lawsuit alleges a variety of human rights violations by the Burmese government in connection with the project. The judge's ruling states that prohibiting Unocal's participation in the project would not stop the human rights abuses claimed in the lawsuit. President Clinton imposed trade and economic sanctions on Burma in April 1997, but the ban did not affect existing investments. Unocal holds a 28 percent share in the pipeline project, which is being constructed from Burma to Thailand. (DJ)

February 1 United Nations (U.N.) Secretary-General Kofi Annan calls for an increase in the amount of oil Iraq can sell under the U.N.-sponsored oil-for-food program. Annan recommends raising the sales limit from $2.14 billion every six months to $5.2 billion. The recommendation now moves to the U.N.'s 15-member Security Council for approval. (WP)

February 2 Western partners in the Caspian Pipeline Consortium have frozen funds for a $2 billion pipeline and are pushing for a shake-up in the Consortium's Russian-led management. The 900-mile pipeline will eventually transport 1.4 million barrels of oil per day from Kazakhstan's Tengiz oil field through Russia to the Black Sea port of Novorossiysk. Oil shipments were scheduled to begin in late 1999, but will likely be delayed at least one year as a result of this latest development. Continued funding of the project was contingent upon the Consortium obtaining Russian rights of way and various federal and local permits for the pipeline by the end of 1997. During a meeting in December 1997, the Western partners discovered that much of this work had not been completed. (WSJ)

February 3 Azerbaijan's state oil company Socar and U.S.-based Conoco announce an agreement to conduct a joint study of Azerbaijan's natural gas processing industries. The study will examine the commercial viability of gathering, processing, and transporting Azerbaijan's natural gas and natural gas liquids for export and domestic use. The study will be conducted over a period of six months. (DJ)

February 3 Russia's RAO Gazprom has sold its 10 percent stake in Centgas, a consortium set up to construct a $2 billion Turkmenistan-Afghanistan-Pakistan natural gas pipeline. U.S.-based Unocal Corporation acquired 7 percent of Gazprom's shares, bringing its total stake in the Centgas to 54 percent. The remaining 3 percent went to Japanese-owned Indonesia Petroleum and Itochu, South Korea's Hyundai Engineering & Construction Company, and Pakistan's Crescent Group. The 800-mile pipeline will extend from the Daulatabad gas field in southeastern Turkmenistan through Afghanistan to Pakistan. (DJ)

February 4 General Motors and Amoco Corporation announce a groundbreaking partnership to jointly develop clean-burning motor vehicle fuels. The partnership is the first of its kind between an automaker and an oil company. General Motors Vice Chairman Harry Pearce says that cleaner diesel fuels and cleaner-burning reformulated gasoline are necessary for the success of future hybrid vehicles, which will run on a combination of gasoline and electricity. (WSJ) (DJ)

February 4 General Motors, Chrysler Corporation, and Ford Motor Company announce that they will participate in the Environmental Protection Agency's National Low Emission Vehicle Program. The Program requires automakers to build cars that will be 70 percent cleaner than current models. In exchange for the voluntary participation of the car companies, eight Northeastern states and the District of Columbia gave up the right to adopt higher California emissions standards. The automakers will begin producing the cleaner cars in 1999 in the Northeast and two years later in the rest of the country. Ten foreign automakers have agreed to participate as well, including Honda, Toyota, Nissan, BMW, Mercedes, Saab, Subaru, Suzuki, Volvo, and Rolls Royce. (NYT) (WP) (DJ)

February 5 Following a ruling by a federal judge denying a request from environmentalists and Native Americans seeking to block the sale of the Elk Hills Naval Petroleum Reserve, the U.S. Department of Energy formally transfers ownership of the reserve to Occidental Petroleum Corporation. Occidental purchased a 78 percent interest in the field for $3.65 billion. Chevron Corporation currently holds the remaining 22 percent. Elk Hills contains 450 million barrels of proven oil reserves; however, officials from Occidental believe the reserve may contain one billion barrels of recoverable reserves. (DJ)

February 5 Norway's state oil company Statoil AS and its partners will invest $400 million to expand the development of Venezuelan oil field LL 652. The investment will cover the first phase of the expansion designed to increase production from 10,000 barrels per day to 115,000 barrels per day over the next ten years. The field's recoverable reserves are estimated at 500 million barrels. Statoil and Chevron each hold a 30 percent interest in the project with Phillips and Atlantic Richfield each holding 20 percent. (DJ)

February 5 The United Kingdom's Hardy Oil & Gas announces the discovery of a major new natural gas field in the South West Miano concession onshore Pakistan. The exploration well Sawan-1, operated by Austria's OMV, produced a flow rate of 58 million cubic feet per day. Reserves are estimated at approximately 918 billion cubic feet. Commercial development is expected to begin in 1998, and initial production is to start by the end of 1999. Hardy and Pakistan Petroleum Limited each hold a 30 percent interest in the concession, with OMV holding a 25 percent interest. (DJ)

February 6 Iraq rejects key parts of United Nations (U.N.) Secretary-General Kofi Annan's proposal to increase the amount of oil Iraq is permitted to sell under the U.N.'s oil-for-food program from $2.14 billion to $5.2 billion. In a letter to Annan, Iraqi Foreign Minister Mohammed Saeed al-Sahhaf objects to additional funds to pay for U.N. monitoring, proposals to repair electric power stations in northern Iraq, and plans for U.N. agencies to target aid to specific groups such as the poor and children. Al-Sahhaf writes that the Iraqi government should deliver the aid and determine which power stations are repaired not the U.N. (WP) (DJ)

February 9 In a letter to United Nations (U.N.) Secretary-General Kofi Annan, Iraqi Foreign Minister Mohammed Saeed al-Sahhaf informs the U.N. that Iraq can only export up to $4 billion of oil in six months. The letter is a response to Annan's recommendation to the U.N. to allow Iraq to increase the amount it can export under the oil-for-food program from $2.14 billion to $5.2 billion. In addition, al-Sahhaf writes that a larger share of the oil sales should go towards humanitarian aid, while the amounts funding U.N. programs and a compensation fund for Persian Gulf war victims should be reduced. (DJ)

February 9 Georgian President Eduard Shevardnadze escapes an assassination attempt as he is headed home in Tbilisi, Georgia's capital. This represents the second assassination attempt against him in three years. Shevardnadze is not injured, but two bodyguards are dead and four others seriously wounded. Shevardnadze suggests that the attack could have been related to his country's attempt to be part of a pipeline route transporting Caspian Sea oil to the Black Sea. (WP)

February 10 The United Nations (U.N.) approves 34 oil contracts submitted by Iraq which will meet its $2 billion quota under the third phase of the U.N.-sponsored oil-for-food program. The 34 contracts total 151.8 million barrels of oil. Iraq exported 121.1 million barrels during the first phase and 127.3 million barrels during the second. The increase in volume is due to weakening oil prices on international markets. (DJ)

February 10 Philippine President Fidel Ramos signs into law legislation deregulating the country's oil industry. It is the last major structural reform sought by the International Monetary Fund (IMF) before it allows the Philippines to withdraw from its current IMF borrowing program. The new law provides for a five-month transition period before full deregulation and a $73 million buffer fund that can be used to subsidize certain petroleum products. (DJ)

February 10 Energy Africa Limited, a South African oil and gas exploration company, announces the discovery of oil off the coast of Congo about 10 miles southwest of the Nkossa oil field. The Bilondo Marine 1 well produced flow rates of 8,520 barrels of oil per day. The well also tapped into a different geological structure from Nkossa, proving the existence of a separate field. The discovery was made within the Haute Mer exploration permit which could contain estimated oil reserves of 500 million barrels. Energy Africa holds a 4 percent interest in a consortium that includes Elf Aquitaine (51 percent), Chevron (30 percent), and Hydro Congo (15 percent). (DJ)

February 11 Russia's RAO Gazprom and Italy's ENI SpA sign a preliminary agreement for joint exploration and exploitation of the Astrakhan region in Russia. The Astrakhan fields are estimated to contain up to one billion barrels of oil equivalent. The deal is worth $3 billion and includes ENI taking a yet-to-be-determined stake in Gazprom. In addition, the two companies envision joint ventures in other regions of the world, including Europe, the Mediterranean, and China. (DJ)

February 16 The United Nations (U.N.) Iraq Sanctions Committee approves a pricing plan for Iraqi oil to be shipped under the third phase of the U.N.-sponsored oil-for-food program. The approval clears the way for Iraq to export $1.07 billion of oil in each of two 90-day periods. The first 90-day period ends on March 5, 1998. (DJ)

February 17 A barge carrying about 200,000 gallons of diesel fuel sinks in rough seas off the coast of the United Arab Emirates. The barge is suspected of transporting smuggled fuel from Iraq. (DJ)

February 18 United Nations (U.N.) Secretary-General Kofi Annan receives unanimous support from the U.N. Security Council for his diplomatic trip to Iraq. Annan is scheduled to meet with President Saddam Hussein and other Iraqi leaders in an attempt to reach a diplomatic solution to the standoff between Iraq and the U.N. over weapons inspections. (DJ)

February 18 The international environmental group Greenpeace praises a policy decision by the European Union (EU) Commission to ban the disposal of offshore oil and gas platforms at sea. The Commission also called on countries in the Ospar Convention to adopt the same policy. The Ospar Convention regulates marine pollution in the North East Atlantic from Gibraltar to the Arctic. The policy, which carries an exemption for large concrete platforms, still requires approval from EU foreign ministers. The ministers will address the policy at a Ministerial meeting on July 20-24, 1998. (DJ)

February 19 The U.S. Justice Department intervenes in four lawsuits against DuPont Company's Conoco Unit, Royal Dutch/Shell Group's Shell Oil Company, Burlington Resources, and Amoco Corporation. The companies are accused of violating the False Claims Act by knowingly underpaying royalties to the US government and Indian nations for oil extracted from public and Indian lands. No estimate of the value of the underpayments has been released, but a Justice Department attorney says that, since 1988, the companies had undervalued hundreds of millions of barrels of oil taken from the Gulf of Mexico and western states. (NYT) (WSJ)

February 20 The United Nations (U.N.) Security Council votes unanimously to more than double the amount of oil Iraq can export under the U.N. oil-for-food program. The Security Council's vote increases the amount Iraq can export from $2.14 billion to $5.26 billion over six months. Iraq maintains that it only has the capability to export up to $4 billion over a six-month period. (DJ)

February 22 Sudan signs a $600 million agreement with three foreign companies to construct a 994-mile pipeline to carry oil from the western fields of Higlig to Bashair Port, near Port Sudan on the Red Sea. The pipeline will transport 150,000 barrels per day and is expected to be operational by June 1999. The Sudanese government's partners are China's CPECC Oil Company, Argentina's Techint, and Britain's Weir and Allan Diesel (DJ)

February 22 United Nations (U.N.) Secretary-General Kofi Annan reaches an agreement with senior Iraqi officials over U.N. inspections of suspected Iraqi weapons sites. The deal includes opening eight Iraqi presidential compounds to weapons inspectors, one of the major points of contention between Iraq and the U.N. Annan will now present the agreement to the U.N. Security Council for approval. (WP)

February 23 Amerada Hess Corporation of the U.S. signs two production-sharing contracts with Malaysia's Petronas Carigali, marking Amerada Hess' entry into exploration activities in Malaysia. The contracts give Amerada Hess a 70 percent stake in block PM304 offshore Terengganu and an 80 percent stake in block SK306 offshore Sarawak. Amerada Hess has committed to spending $24.9 million and drilling five well on the two blocks. (DJ)

February 23 Japan's Export-Import Bank signs a loan agreement worth approximately $80 million with Gas Authority of India Limited to help finance capacity expansion work on a natural gas pipeline linking Gujarat, Madhya, and Uttar provinces with the Bombay North oil and gas field. The loan is being co-financed by the Asian Development Bank. The loan will be used to boost the capacity of the pipeline from 636 million cubic feet per day to 1.2 billion cubic feet per day. (DJ)

February 24 Turkmenistan and Shell Exploration B.V. sign a Memorandum of Understanding (MOU) providing Shell with the exclusive right to promote a project to transport Turkmen natural gas to Turkey. As part of the MOU, Shell will conduct a feasibility study on a proposed 1,200-mile gas pipeline connecting Turkmenistan and Turkey via Iranian territory. (DJ)

February 26 Longtime competitors Halliburton Company and Dresser Industries announce plans to merge for $8.1 billion. The new company will retain the Halliburton name at its Dallas, Texas headquarters and will form the world's largest oil-drilling services company. The deal is still subject to approval by shareholders and regulatory agencies. (WP)

February 26 State oil company Petroleos de Venezuela (PdVSA) announces that three major Venezuelan oil joint ventures will be delayed 6-8 months due to budget cuts. Lower-than- expected oil prices have forced PdVSA to cut its investment plan for 1998 by approximately $1 billion. The three projects are the Cerro Negro joint venture with Mobil Corporation, the Total-led Sincor project in the Zuata region, and the Arco-led Petrolera Ameriven S.A. joint venture in the Hamaca zone. All three are extra-heavy crude upgrading projects in the Orinoco Belt region in southeast Venezuela. (DJ)

March 1 The Jordanian government announces that it has signed an agreement with the Royal Dutch/Shell group allowing the company to extract crude from oil shales in Jordan. A recent study by Jordan's Natural Resources Authority indicates that there are 40 billion tons of oil shale reserves in the southwestern regions of the Kingdom. Jordan also announced that it has received offers from an international consortium to build a refinery in Aqaba, located 217 miles south of the Jordanian capital Amman. The refinery is expected to cost $2 billion, with a capacity of 250,000 barrels per day. (DJ)

March 1 Iraqi officials and independent experts report that Iraq's oil production system has fallen into such disrepair that Iraq cannot take full advantage of a recent United Nations (U.N.) Security Council resolution that more than doubled U.N.-authorized Iraqi oil sales to $5.26 billion every six months. Iraq says that, under current conditions, it can sell only $4 billion worth of oil over the next six months, unless it is allowed to purchase more equipment. Experts say that Iraq's production system needs $800 million of repairs, and that these repairs could take a year or more to complete. (NYT)

March 2 The United Nations Security Council unanimously approves a resolution endorsing Secretary Kofi Annan's agreement with Iraq on weapons inspections which includes the controversial presidential palaces. The resolution threatens any Iraqi violation of the agreement with the "severest consequences," but does not authorize an automatic military response. (NYT) (DJ)

March 3 The Independent Petroleum Association of America (IPAA) announces that it has filed a lawsuit against the U.S. Department of the Interior, challenging the validity of a natural gas transportation regulation that went into effect on February 1, 1998. The IPAA contends that under the new law, independent oil and gas producers will no longer be allowed to deduct the full cost of transporting gas to the marketplace, which effectively adds these costs to the wellhead price. This, in turn, allegedly will drive up the cost of gas and increase royalty payments required by the government for that production. IPAA claims that this situation will threaten future natural gas production on federal lands. (DJ)

March 4 The Hungarian government announces that it will sell 1 percent, or 984,000 ordinary shares, in state-owned oil and gas company MOL Rt. The stake may be increased to 2 percent if demand from domestic small investors is greater than the 1 percent offer. The offer is part of the government's plan to privatize MOL and reduce its ownership from 36.2 percent to 25 percent. (DJ)

March 6 Ford Motor Company and Mobil Corporation form an alliance to develop fuel and vehicle technologies to increase efficiency and reduce emissions. This announcement follows a similar agreement between General Motors Corporation and Amoco Corporation. Ford and Mobil will focus on developing a direct-injection diesel system that substantially improves fuel efficiency and fuel cell processors for use in passenger vehicles. Ford expects to introduce a fuel-cell vehicle in 2004. (WSJ)

March 6 French petroleum company Total SA signs an agreement with the Nigerian National Petroleum Corporation to rehabilitate the Kaduna refinery in northern Nigeria. The 110,000- barrel-per-day refinery has been shut since July 1997. Currently, the 125,000-barrel-per-day unit in Warri is the only functional refinery in the country. All other refineries have been shut for safety reasons. The rehabilitation is estimated to cost around $200 million, and some units at the refinery may resume production in six months. (DJ)

March 11 The United States Mineral Management Service decides to exclude an area offshore of the Arctic National Wildlife Refuge in Alaska from an oil-drilling lease sale scheduled for August 1998. The decision is a victory for environmental groups, such as the Alaska Wilderness League. (DJ)

March 12 Amoco Corporation reports that it will invest $230 million to develop the Amherstia field offshore Trinidad and Tobago. The field contains 2 trillion cubic feet of natural gas reserves and first production is expected in the first quarter of 2000. Amoco also expects Amherstia to yield crude oil and condensate. (DJ)

March 12 As the United States Bureau of Land Management considers proposals that would allow drilling for crude oil and natural gas on a 4.6-million-acre portion of the National Petroleum Reserve-Alaska, the American Petroleum Institute (API) announces its support for a proposal that would open it all up to drilling. However, API also wants the drilling to be conducted in an environmentally sound manner. API maintains that the oil industry has the technology to design and build facilities that minimize the industry's impact on fish, birds, and other wildlife. (DJ)

March 16 State-owned China National Petroleum Corporation signs a 25-year, $325 million contract with Monde Group LLC of Houston, Texas, for an oil recovery program in China. Under the contract, Monde will take over operation of 800 wells in five sections of the Zhongyuan oil field near Puyang, Henan Province. Monde will attempt to reduce recent production declines from the field using enhanced oil recovery systems such as improved drilling techniques and 3D seismic surveys. (DJ)

March 17 Following a long-time dispute over transit fees, Russia and Turkmenistan reach an agreement to transport 706 billion cubic feet of Turkmen natural gas to Ukraine via Russian territory. (DJ)

March 18 The U.S. Interior Department's Minerals Management Service holds its semiannual lease sale in New Orleans, Louisiana, receiving bids on 794 of 4,180 tracts offered in the sale. The tracts cover about 4.3 million acres all of which are located in the central region of the Gulf of Mexico. Oil producers submit bids totaling $810.4 million. Conoco submits the most bids, with 122 valued at $48.7 million, and Shell Oil Company is second with 119 at $46.9 million. Other major bidders include Mobil Corporation, Chevron Corporation, Elf Aquitaine SA, and Oryx Energy Company. The next lease sale is scheduled for August 1998 covering western blocks in the Gulf. (WSJ)

March 19 Sergei Volchkov, deputy manager for construction for the Caspian Pipeline Consortium (CPC), reports that further delays are expected in the construction of a 838-mile oil pipeline running from Kazakhstan's Tengiz oil field to the Russian Black Sea port of Novorosiisk. Earlier this year, CPC reported that construction on the $4.5 billion pipeline would begin in the third quarter of 1998, but that date now has been pushed to the fourth quarter of 1998, and start-up has been pushed to early 2000. Securing land permits for construction has proved slower than expected. The planned capacity for the pipeline is approximately 500 million barrels per year. (DJ)

March 19 Shell Exploration and Production Company announces that it plans to spend $1 billion developing the Angus, Europa, and Macaroni oil and gas discoveries located in the Gulf of Mexico. The Angus development is expected to yield 40,000 barrels of oil per day and 60 million cubic feet of gas per day by the end of 1999. The Europa development is expected to produce 60,000 barrels of oil per day and 45 million cubic feet of gas per day by early 2001. The Macaroni development is anticipated to yield 35,000 barrels of oil per day and 65 million cubic feet of gas per day by late 1999. The three discoveries will add 300 million barrels of oil equivalent to the Gulf of Mexico's deep water inventory. (DJ)

March 20 In the continuing battle for market share in the United States (U.S.), Mexico and Saudi Arabia each move ahead of Venezuela as the biggest exporters of crude oil to the U.S. for January 1998, according to the U.S. Energy Information Administration. Venezuela has been the biggest foreign oil source for the U.S. on an annual basis for the past two years. (DJ)

March 20 Russia's RAO Gazprom and the Bulgarian government reach a preliminary agreement providing for increased natural gas deliveries from Gazprom to Bulgaria in exchange for increased transit of Russian gas through Bulgaria to neighboring countries. Under the agreement, annual gas deliveries to Bulgaria will rise from 212 billion cubic feet in 1997 to 283 billion cubic feet in 1998. Transit of Russian gas through Bulgaria to other countries, such as Turkey, Greece, and The Former Yugoslav Republic of Macedonia, will increase to 671 billion cubic feet per year by 2010. (DJ)

March 21 Russia announces plans for the sale of state-owned Rosneft, the Russian government's last major holding in the oil industry. The government is offering a 75 percent stake in the firm at a starting price of $2.1 billion. Buyers will be required to invest $400 million in the company within three months of the sale. (WP)

March 22 In a joint statement, three major oil exporters, Saudi Arabia, Venezuela, and Mexico, pledge to reduce their own oil output in an attempt to boost sagging oil prices. Mexico and Venezuela indicate that they will cut production by 100,000 barrels per day and 200,000 barrels per day, respectively, while Saudi Arabia will cut 300,000 barrels per day. The three countries also are trying to get commitments from other Organization of Petroleum Exporting Countries (OPEC) member states and non-OPEC countries for further cuts to ultimately reduce worldwide oil production by 1.6 million to 2 million barrels per day. (NYT) (WSJ)

March 24 After a dispute with Mobil Corporation, Elf Nigeria, a subsidiary of France's Elf Aquitaine SA, receives approval from Nigeria's Department of Petroleum Resources to develop the Amenam oil field. The field, located in Elf's OML99 area, contains estimated reserves of 400 million barrels of oil and is expected to produce 90,000 barrels per day. In a related story, France's Total SA and Brazil's Petrobras have been awarded block OPL246 in Nigeria's deep offshore zone. Some estimates put the block's reserves at one billion barrels of oil. (DJ)

March 24 France's Elf Aquitaine SA acquires a 5 percent stake for $528 million in the newly formed Russian oil company AO Yuksi. Yuksi was formed earlier this year in a merger of Russian oil producers AO Yukos and AO Sibneft. Elf will help Yuksi finance new equipment and development projects. The deal also covers joint development of the Sugmut field, located in western Siberia, which contains estimated reserves of more than 700 million barrels. Elf and Yuksi will each hold a 50 percent stake in the field, with total development costs estimated at $1.5 billion. (WSJ)

March 26 In response to the recent drop in oil prices, Russia's second largest oil company, AO Lukoil, announces that it will reduce its exports of oil products by more than 7 million barrels for 1998. However, Lukoil's president, Vagit Alekperov states that the cuts will not include crude oil exports. To compensate for the cuts, Alekperov says that Lukoil will boost sales of oil products in Russia's domestic market. (DJ)

March 30 The U.S. Environmental Protection Agency (EPA) sues Mobil Corporation alleging that Mobil violated the Clean Water Act by spilling more than one million gallons of oil and contaminated water into tributaries of the San Juan River. The lawsuit cites 73 spills occurring between December 1991 and January 1998 at oil and gas production fields Mobil operates on Navajo Nation lands near Aneth, Utah. EPA also alleges that Mobil violated EPA regulations by not having containment equipment in the event of a spill and by failing to report some spills. The maximum penalty under the Clean Water Act is more than $5 million. (DJ)

March 31 The Organization of Petroleum Exporting Countries (OPEC) releases an official communique from its 104th (extraordinary) meeting convened in Vienna, Austria, on March 30, 1998. The communique states that member countries have agreed to voluntary cuts from each country's current production levels in an attempt to boost oil prices. OPEC has agreed to cuts totaling 1.245 million barrels per day effective April 1, 1998. The cuts, in barrels per day, break down as follows: Algeria 50,000; Indonesia 70,000; Iran 140,000; Kuwait 125, 000; Libya 80,000; Nigeria 125,000; Qatar 30,000; Saudi Arabia 300,000; United Arab Emirates 125,000; and Venezuela 200,000. In addition, non-OPEC oil-producing countries Mexico, Oman, and Yemen have agreed to cut production by 100,000, 30,000, and 20,000 barrels per day, respectively. Moreover, a third non-OPEC country, Norway, the world's third largest oil exporter, has pledged to reduce its oil production by 3 percent, or approximately 100,000 barrels per day. However, Norway's cuts will not take effect until mid-April 1998. (Cuts are from February production based on secondary sources.) (DJ) (WSJ)(NYT)

April 1 India's state-owned Gas Authority of India reaches an agreement, in principle, with U.K.-based Cairn Energy, U.S.-based Brown and Root, and Australia's Command Petroleum to build a $2.5 billion natural gas pipeline from Myanmar to India's eastern coast. The proposed deep-sea pipeline would transport nearly one billion cubic feet of natural gas annually from fields offshore Myanmar to India's Orissa state. The four companies plan to form a joint venture company by mid-1999. (DJ)

April 1 Following a G-8 (G-7 plus Russia) ministers' summit, U.S. Energy Secretary Federico Peña maintains that the U.S. government will not fund the construction of a proposed oil pipeline stretching from Azerbaijan to the Turkish Mediterranean port of Ceyhan or a pipeline running from Kazakhstan's Tengiz oil field to the Russian Black Sea port of Novorossisk. However, Peña also indicates that the U.S. government does advocate multiple pipeline routes for the area. (DJ)

April 2 Saudi Arabia's Petroma Refining and Marketing Company and U.S.-based Hutchison Group are planning to build a 500,000-barrel-per-day joint venture refinery in Bahrain. The refinery will be part of a larger $5 billion petrochemical complex to be located in Bahrain's new Hidd industrial zone on Muharraq Island northeast of the mainland. A joint venture company, called Bahrain Refining Company, will be set up to run the project. Construction is expected to begin in 1999, and the refinery is scheduled to come on line in 2003. (DJ)

April 3 After agreeing to reduce its oil production by 200,000 barrels per day beginning April 1, 1998, Venezuela announces that it will first fill its storage tanks. Venezuelan Oil Minister Erwin Arrieta says that Venezuela will keep production at current levels, as long as it has spare storage capacity, and reduce the volume of crude oil going into the market to achieve the 200,000-barrel-per-day cut. Once the storage tanks are full, then it will cut production. Venezuela reportedly has total storage capacity of 40 million barrels. (DJ)

April 5 Egypt and China sign an agreement to establish a joint drilling company with an investment capital of $73.8 million. The company will be set up by the Chinese National Oil Company and two Egyptian private concerns. (DJ)

April 8 U.S. Energy Secretary Federico Peña and key members of the U.S. Congress agree to temporarily halt the sale of $207 million worth of oil from the Strategic Petroleum Reserve. The oil sale is designed to cover the Reserve's expenses so that it is self sufficient. Government officials are now looking to cover the costs from other sources. Peña has delayed the sale for one month. (WSJ)

April 8 In support of last month's decision by OPEC and some non-OPEC countries to cut oil production by approximately 1.5 million barrels per day, Russia and China announce that they will cut production by 61,000 and 150,000 barrels per day, respectively. In addition, Russia has pledged to reduce oil products exports by 30,000-40,000 barrels per day. The cuts by Russia amount to a 2.3 percent reduction in crude exports and a 3.2 percent reduction in product exports. China's cuts represent about 5 percent of its planned 2.9-million-barrels-per-day output for 1998. (WP) (DJ)

April 8 Petroleos de Venezuela SA (PDVSA) announces that due to its commitment to cut oil production by 200,000 barrels per day as part of a coordinated effort by the Organization of Petroleum Exporting Countries (OPEC) and some non-OPEC countries to boost oil prices, it will be unable to meet oil deliveries to some of its international clients and therefore, declares force majeure on affected shipments. This declaration follows recent statements from PDVSA's president and the Energy and Mines Minister that Venezuela would keep production at current levels, as long as it has spare storage capacity, and reduce the volume of crude oil going into the market to achieve the 200,000-barrel-per-day cut. PDVSA now states that the country has reduced output from 3.370 million barrels per day to 3.170 million barrels per day. No information has been released on how many cargoes or clients will be affected by the declaration. (DJ)

April 8 Exxon Corporation and British Petroleum announce that they will spend $1.2 billion developing the Hoover and Diana oil and gas fields, located south of Galveston, Texas, in the Gulf of Mexico. The fields contain estimated recoverable reserves of more than 300 million oil-equivalent barrels, and production is estimated to begin by 2000. Exxon holds a 66.7 percent operating interest in the project, with British Petroleum holding the remaining 33.3 percent interest. (NYT) (DJ)

April 9 Crude oil output from the Organization of Petroleum Exporting Countries (OPEC) totals 28.86 million barrels per day for March 1998, an increase of 163,000 barrels per day from February 1998. OPEC production is now more than 1.3 million barrels per day above the 27.5- million-barrels-per-day quota level which took effect on January 1, 1998. Rising Iraqi oil production accounts for 50 percent of the March production increase. Iraq's oil production is currently estimated to be at 1.837 million barrels per day. (DJ) Note: EIA estimates OPEC crude oil output of 28.50 million barrels per day for February 1998.

April 9 Russia announces that it will cut oil exports through Latvia in a dispute over the Russian-speaking minority in the Baltic state. Andrei Pershin, spokesman for Acting First Deputy Prime Minister Boris Nemtsov, contends that Latvian laws violate the rights of Latvia's Russian-speaking population. Pershin says that Russian oil exports through the Ventspils terminal will be cut 15 percent. The Ventspils terminal handles 11 percent to 12 percent of Russian oil exports. (NYT)

April 13 The discovery that an existing Soviet-era pipeline between Azerbaijan and Georgia must be replaced sparks new debate over the selection of pipeline routes out of the oil-rich Caspian Sea region. Azerbaijan's state oil company Socar now wants to lay a much bigger 42-inch line with throughput of up to 600,000 barrels per day at a cost of $590 million. The original plan was to refurbish the existing 20-inch line at a cost of $315 million. The 540-mile route runs from Azerbaijan's capital, Baku, to Supsa on Georgia's Black Sea coast. The Azerbaijan International Operating Company, a consortium led by British Petroleum and responsible for constructing the pipeline, must now decide whether the bigger line is needed and who will pay for it. (WSJ)

April 14 Saudi Arabia announces that it will implement crude oil output cuts by further delaying new light crude production from the Ghawar field. In March 1998, Saudi Arabia agreed to cut its crude production by 300,000 barrels per day beginning April 1, 1998. Saudi Arabia's commitment is part of an agreement between the Organization of Petroleum Exporting Countries (OPEC) and several non-OPEC producers to voluntary cuts in crude production in an attempt to boost sagging oil prices. (DJ)

April 14 Approximately 1,000 pipeline workers agree to a 17.5 percent pay increase, ending a seven-day strike against construction company Brown Root Murphy, a unit of U.S.-based Halliburton Company. The strikers are working on a $2 billion natural gas pipeline stretching between Bolivia and Brazil. The 1,863-mile pipeline will transport between 283 million cubic feet and 1.1 billion cubic feet per day of Bolivian natural gas to southern Brazil. (DJ)

April 14 In the continuing battle for the biggest share of the U.S. crude oil import market, Venezuela reclaims the top spot for February 1998, while Saudi Arabia falls to fourth behind Canada and Mexico. Data from the U.S. Energy Information Administration show that U.S. crude imports from Saudi Arabia fell 31 percent from January 1998 to February 1998 and dropped below one million barrels per day for the first time in four-and-a-half years. Meanwhile, Venezuela exported 1.32 million barrels per day of crude to the U.S., claiming 18.6 percent of U.S. crude imports in February 1998. (DJ)

April 16 A joint venture between Chevron Corporation and the Nigerian National Petroleum Corporation begins production from the Gbokoda oil field, located on the western Niger Delta. Crude oil production is expected to reach 40,000 barrels per day by the end of 1998, and by 2000, the field's output will increase the joint venture's total production by more than 85,000 barrels per day. (DJ)

April 16 Kazakhstan's President Nursultan Nazarbayev suspends further privatization of the country's oil and gas sector. Analysts estimate that Kazakhstan has so far privatized less than 50 percent of its oil and gas industries. In its short history as a newly independent state, this energy-rich nation has attracted billions of dollars in foreign investment. The country's biggest energy projects are the Tengiz field operated by Chevron and Mobil and the Karachaganak oil and gas field operated by British Gas, Agip, and AO Lukoil. (DJ) (WSJ)

April 19 The Gulf Cooperation Council's (GCC) Assistant Secretary-General for Economic Affairs, Abdulla al-Khulaifi, reports that the GCC's natural gas reserves have risen from 343 trillion cubic feet in 1986 to 731 trillion cubic feet today. He asserts that GCC countries currently hold 15 percent of the world's gas reserves but only account for 4.6 percent of world output. However, current trends indicate that, in the next few years, the GCC will account for around 10 percent of all internationally-traded gas and become a leading supplier of liquefied natural gas. In order to diversify and expand its gas industries, GCC countries also are evaluating plans to connect all GCC states by an inter-Gulf gas grid. GCC member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. (DJ)

April 19 The Kuwait News Agency reports that OPEC members countries have lost an estimated $8 billion in the first quarter of 1998 due to the global drop in oil prices. (DJ)

April 22 Iran's Deputy Oil Minister Ali Hashemi announces that a new natural gas field has been discovered at Taqdis Gardan in Iran's southern Fars province. The field contains 2.1 trillion cubic feet of recoverable gas and 10.5 million barrels of natural gas liquids gas valued at $3.2 billion. The field will be developed by Iranian contracting companies and is expected to be fully operational by 2000. (DJ)

April 23 Northern States Power Company (NSP) of Minneapolis, Minnesota announces that it is pulling out of a $1 billion project to build a natural gas pipeline from western Canada to the U.S. Midwest region. Other reports indicate that another partner in the project, TransCanada Pipelines, is about to withdraw as well. The 800-mile line, called Viking Voyageur, was to transport up to 1.4 billion cubic feet per day of natural gas from Alberta through Minnesota, Wisconsin and Illinois. NSP and TransCanada each hold a 40 percent interest in the pipeline, with Nicor of Naperville, Illinois holding the remaining 20 percent. (WSJ)

April 23 U.S. oil companies Mobil and Exxon sign agreements with Turkmenistan to explore for oil and natural gas in the Turkmen Caspian Sea region. Mobil and its partner Monument Oil and Gas, a British company, will explore an area in western Turkmenistan near the Caspian Sea. Mobil will hold a 52.4 percent interest in the project, and Monument will hold a 27.6 percent interest. Turkmenistan's national oil company will hold the remaining 20 percent interest. (WP)

April 23 France's Total and state-owned Petroleos de Venezuela SA (PDVSA) agree to purchase Norwegian-based Norsk Hydro's 15 percent stake in the Sincor extra-heavy crude oil upgrading joint venture project located in Venezuela's Orinoco Belt. Total's share of the project will increase from 40 percent to 47 percent, while PDVSA's share will increase from 30 percent to 38 percent. Norway's state-owned Statoil retains its 15 percent interest. Start-up of the Sincor project is expected by the end of 2001, with production levels reaching 200,000 barrels per day of extra-heavy crude. (DJ)

April 24 ARCO announces that it plans to invest at least $2 billion in Venezuela over the next 10 years. Most of the investment will be in ARCO's heavy-oil joint venture project with Venezuela's state oil company Petroleos de Venezuela (PDVSA), Phillips Petroleum Company, and Texaco, scheduled to begin production in 1999. The remainder of the investment will go toward four oil fields which ARCO and its partners are operating for PDVSA. (NYT)

April 27 Bulgaria and Russia sign an agreement under which Russia will deliver between 177 billion cubic feet and 212 billion cubic feet of natural gas annually to Bulgaria for the next 12 years. The price of the gas has not been disclosed; however, Bulgaria will pay 20 percent of the price in goods or through construction work. (DJ)

April 28 Despite direct appeals for relief from Iraq's foreign minister and oil minister, the United Nations (U.N.) Security Council decides to continue economic sanctions on Iraq, imposed in 1990 following Iraq's invasion of Kuwait. The Security Council also announces that it will once again begin reviewing the sanctions every 60 days. The Council suspended 60-day reviews in October 1997 after Iraq expelled American members of U.N. weapons inspection teams. (DJ)

May 1 Iraq maintains that to meet its $2 billion oil export target, it has contracted for the export of 186 million barrels of oil under the third phase of the United Nations sponsored oil-for-food program. The third phase ends on June 3, 1998. The amount of oil for export in the third phase is higher than the previous two phases due to lower world oil prices. Iraq exported 120 million barrels during the first phase, and exported another 127 million barrels in the second phase. (DJ)

May 3 Amoco Norway, a subsidiary of Amoco Corporation of the U.S., announces an oil and natural gas discovery off the coast of Norway. Amoco estimates that the find, located in the Donnatello block, holds between 200 million and 500 million barrels of oil and gas. Initial tests at the site flowed approximately 5,200 barrels per day of oil and 5.3 million cubic feet per day of gas. Company officials maintain that the find is one of the biggest off the Norwegian coast in recent years. Amoco holds a 30 percent interest in the Donnatello block, followed by the Norwegian government's State Direct Financial Interest with 30 percent, Britain's Enterprise Oil PLC with 25 percent, and Mobil Corporation of the U.S. with 15 percent. (WSJ)

May 4 The Atlantic Richfield Company (ARCO) announces that it will acquire Union Texas Petroleum Holdings Incorporated, an independent oil company based in Houston, Texas, for $2.47 billion. The acquisition will add 140,000 barrels per day to ARCO's oil and natural gas production and increase ARCO's total oil and gas reserves by 14 percent. The deal also helps ARCO enter the Caspian Sea region, with ARCO gaining a 12.5 percent interest in the Caspian Pipeline Consortium and a 5 percent interest in Kazakhstan's Tengiz oil filed. ARCO also will gain additional interests in projects located in the United Kingdom, Indonesia, Alaska, and Venezuela. (NYT) (WSJ)

May 6 Taiwan's Economics Ministry decides to delay the privatization of state-owned Chinese Petroleum Corporation (CPC). The decision follows a parliamentary committee's call for the delay so that legislation, detailing how the petroleum industry will operate after CPC is privatized, can be drafted. Analysts suggest that the first sale of state shares may be delayed from six months to two years. The original privatization plan called for a 15 percent stake to be sold by the end of June 1998, and another 18 percent by July 1999. Government ownership in CPC was scheduled to fall to less than 50 percent by July 2000. (WSJ)

May 8 The United Nations (U.N.) Security Council accepts a recommendation to end a limited travel ban on some Iraqi government officials. The ban was approved on November 12, 1997 following Iraq's refusal to allow U.N. weapons inspectors access to eight "presidential palaces." In a letter to the Security Council, Richard Butler, chairman of the U.N. Special Commission, reported that Iraq has been granting weapons inspectors access to all sites and recommended termination of the travel ban. (DJ)

May 11 In March 1998, the Organization of Petroleum Exporting Countries (OPEC) and several non-OPEC countries agreed to crude oil production cuts, beginning April 1, 1998, in an attempt to boost sagging world oil prices. Iraq was the only OPEC member excluded from the deal because its oil exports are conducted under the United Nations oil-for-food program. A Dow Jones poll of industry observers indicates that OPEC's April 1998 crude oil output, including Iraq, was 27.995 million barrels per day, down 865,000 barrels per day from March 1998. A second report from the Paris-based International Energy Agency (IEA) indicates that OPEC's April 1998 crude production, including Iraq, was 27.95 million barrels per day, down 800,000 barrels per day from the March 1998 rate. The Dow Jones poll shows that, since February 1998, OPEC, excluding Iraq, has cut production by 1.117 million barrels per day, while IEA reports that production, excluding Iraq, has dropped by 1.03 million barrels per day over the same period. These declines are between 83 and 90 percent of the 1.245 million barrels per day of production cuts agreed to by OPEC at the end of March 1998. (DJ)

May 11 India announces that it has conducted three underground nuclear tests, the country's first since 1974. The tests were conducted simultaneously 330 miles southwest of New Delhi, near the Pakistani border. The Indian government indicates that the three tests included a thermonuclear device, commonly known as a hydrogen bomb. Two days later, on May 13, 1998, India announces that it has conducted two more underground nuclear tests in the same desert range. (WP) (DJ)

May 13 Russia postpones the privatization of Eastern Oil Company, Tyumen Oil Company, and Slavneft until at least the fall of 1998. Alexander Braverman, First Deputy Minister for State Property, says that attempts to sell government stakes in the companies have failed thus far because of a lack of demand. Braverman also indicates that if the privatization of AO Rosneft goes well, the government may reduce the stakes to be offered in Eastern, Tyumen, and Slavneft or delay the sale even further. (DJ)

May 14 The United Nations Security Council issues a declaration deploring India's nuclear test explosions, urging maximum restraint and dialogue to ease tensions between India and Pakistan. The statement also calls on India, Pakistan, and other nations to sign, without conditions, international treaties banning test explosions and nuclear proliferation. Immediately following the tests, the United States and other countries imposed economic sanctions on India. (DJ)

May 14 The U.S. Federal Energy Regulatory Commission approves an agreement among the seven owners of the Trans-Alaska Pipeline System (TAPS) designed to increase competition and lower tariffs. TAPS runs from Prudhoe Bay on Alaska's North Slope to the port of Valdez, Alaska. (DJ)

May 18 The Caspian Pipeline Consortium (CPC) takes its first major step towards construction of a $2 billion, 940-mile pipeline route from Kazakhstan's Tengiz oil field to Russia's Black Sea port of Novorossiisk. CPC has secured approval of an investment feasibility study, and must now obtain approval for a construction feasibility study and final land allocation. The pipeline will have an initial capacity of 560,000 barrels per day of oil, eventually rising to 1.34 million barrels per day. CPC officials expect the line to be operational in 2000. (R) (DJ)

May 18 Under an agreement with the European Union and Russia, U.S. President Bill Clinton confirms that the United States will not impose sanctions on France's Total, Russia's Gazprom, and Malaysia's Petronas under the Iran-Libya Sanction Act (ILSA). Passed in 1996, ILSA imposes mandatory and discretionary sanctions on non-U.S. companies which invest more than $20 million annually (lowered in August 1997 from $40 million) in the Iranian oil and gas sectors. In 1997, the three companies signed a $2 billion deal to develop Iran's South Pars natural gas field. In exchange, the European Union and Russia agree to tighten controls on the export of weapons technology to Iran. (R) (NYT)

May 19 The U.S. Virgin Islands approves a $625 million joint venture between Hess Oil Virgin Islands and Venezuela's state-owned Petroleos de Venezuela SA (PDVSA). The approval clears the way for PDVSA to acquire a 50 percent stake in Hess Oil, a division of New York-based Amerada Hess Corporation, over a 10-year period. The two companies will share construction costs of a new, $500 million facility, utilizing Venezuelan heavy crude oil, to make coke, a solid petroleum product used in heavy industry. (DJ)

May 19 The U.S. Justice Department files suit against Texaco, contending that the oil company was involved in a nationwide effort to undervalue oil it produced on federal and tribal lands in order to pay lower royalties. The suit is separate but similar to a suit the Justice Department filed against four other major oil companies in February 1998. (NYT) (WP)

May 20 U.S. oil company Chevron Corporation confirms that its has selected Australian Gas and Light Company (AGL) and Malaysia's state-owned Petronas to build, own, and operate a $938 million, 1,304-mile section of a natural gas pipeline linking Papua New Guinea with Australia. Under the deal, AGL will be primarily responsible for the Australian onshore operations of the line, with Petronas managing a 100-mile offshore section north of Cape York. Chevron says that construction of the pipeline is expected to begin in 1999, with completion scheduled for mid-to-late 2001. The pipeline will be able to deliver 185 billion cubic feet per year of natural gas to markets on the east coast of Australia. (DJ)

May 21 Following two weeks of student protests, civil unrest and riots, President Suharto resigns, ending 32 years as leader of State of Indonesia. Vice President Baharuddin Jusuf Habibie is immediately sworn in as the new president. (DJ)

May 21 Russia's Prime Minister Sergei Kiriyenko pledges to quickly resolve a growing miners' strike spreading across Russia. Russian miners began protests and strikes on May 6, 1998 demanding back pay and guarantees that mines will not be shut down. The protests and strikes have been spreading across the country for the past two weeks, and miners have blocked traffic along the Trans-Siberian railway. The miners maintain that wages are up to six months overdue, amounting to an estimated $1.45 billion. (DJ)

May 25 Russian oil companies AO Yukos and AO Sibneft call off merger proceedings to form AO Yuksi. If the merger had been completed, Yuksi would have been one of the world's largest private oil companies. In a joint press release, the companies blame the instability of the Russian stock market and sagging world oil prices for the failure of the merger. The companies also indicate that they now will independently seek western partners. Yuksi was expected to bid for a controlling interest in Russia's state-owned oil company AO Rosneft. (WSJ)(DJ)

May 25 Union Texas Petroleum Holdings Incorporated assumes operation of the Boqueron marginal field from Venezuela's state-owned Petroleos de Venezuela SA. In a press release, Union Texas reports that it will use high-pressure natural gas injection to boost crude oil production. Production from Boqueron, which is currently 8,100 barrels per day, will be increased to 50,000-60,000 barrels per day within three to five years. (DJ)

May 26 The deadline for the long-awaited auction of Russia's state-owned oil company AO Rosneft passes without any of the Western and Russian companies expected to compete for Rosneft submitting an offer. Prime Minister Sergei Kiriyenko is expected to announce a new auction and to lower the $2.1 billion starting price the Russian government has been seeking. (NYT)

May 26 China verifies that a field located in the Qaidam basin in northwest Qinghai province holds 2.7 trillion cubic feet of natural gas. This brings the total proven gas reserves in Qinghai oil field to 5.3 trillion cubic feet. Note: As of January 1, 1998, China's proven natural gas reserves were estimated by the Oil and Gas Journal to be 41 trillion cubic feet. (DJ)

May 27 Norway's Statoil AS and Norsk Hydro AS sign an agreement with Russia's Gazprom to jointly explore the Pechora Gulf area of the Barents Sea, a region considered rich in petroleum potential. (DJ)

May 27 Colombia's state-run oil company Ecopetrol signs an offshore exploration agreement with Amoco Corporation and Atlantic Richfield Company for two blocks off Colombia's Caribbean coast. The two U.S. oil companies are expected to complete seismic studies within the next two years, and to invest $190 million drilling six test wells over the next six years. The companies will concentrate on exploration for crude oil, but also expect to find natural gas deposits. (DJ)

May 28 Shell Oil Company, Texaco, and Saudi Arabia's Aramco approve final terms and conditions of a proposed U.S. refining and marketing joint venture. The alliance will be the nation's largest seller of gasoline, combining the companies' eastern and Gulf Coast refining and gas station businesses. The joint venture will be called Motiva Enterprises LLC and is expected to be operating in June 1998. (WSJ) (WP)

May 29 Pakistan announces that it has conducted five underground nuclear tests, the country's first ever nuclear detonations. The test were conducted at the Chagai Hills test site in western Pakistan, near the Afghan border. Pakistan follows up with two more tests on May 30, 1998. These additional tests are conducted in the remote desert hills of southwestern Baluchistan province. (WP) (DJ)

May 29 United Nations (U.N.) Secretary General Kofi Annan approves Iraq's new aid distribution plan under the U.N. sponsored oil-for-food program, clearing the way for Iraq to export up to $5.26 billion worth of oil during the fourth phase of the program. Early this year, the U.N. agreed to allow Iraq to increase its oil exports from $2 billion , but Iraq maintains that it only has the capability to reach $4 billion. If oil prices remain at current levels, Iraq will need to export close to 2 million barrels per day of oil to reach $4 billion, up from current export rates of around 1.5 million barrels per day. To reach 2 million barrels per day, Iraq's production facilities are estimated to need approximately $300 million worth of repairs. (DJ)

June 1 The Russian government announces that it is reducing the price for a 75 percent stake in AO Rosneft. Prime Minister Sergei Kiriyenko says that the minimum bid for the state-owned oil company will be set at $1.6 billion. The government was forced to cancel the sale last month after receiving no bids at the previous minimum price of $2.1 billion. (DJ)

June 2 S.M. Hosseini, Iran's Deputy Oil Minister for International Affairs, reports that Iran is seeking to increase its oil production capacity and capture at least 7 percent of the world crude oil market by 2020. Iran currently holds 5.7 percent of the world crude oil market. Hosseini says that Iran will accomplish its goal by using enhanced oil recovery (EOR) technologies, exploring new areas, and attracting foreign partners to previously discovered fields. Iran expects to recover an additional 20-30 billion barrels of oil using EOR technologies, and another 20 billion barrels from undeveloped areas in northwest and northeast Iran. (DJ) (Editor's Note: The U.S. Energy Information Administration estimates Iran's share of world crude oil supply to be 5.4 percent for the first quarter of 1998.)

June 2 After recent coal strikes contributed to the collapse of Russian financial markets, the Russian government begins paying back wages to the striking miners. Anatoly Chekis, a trade union official from the Kuzbass region, says that back wages have been paid for the past three months' work. However, Chekis maintains that some miners have not been paid for as long as six months. (DJ)

June 3 Russian gas company Gazprom announces that it is cutting in half its natural gas supplies to Yugoslavia due to that country's failure to pay for previous supplies. (DJ)

June 4 Jordan awards a $400 million contract to Amoco Corporation for the construction of a 168-mile natural gas pipeline, running from fields in Egypt's Nile Delta, across the Sinai Peninsula, and under the Red Sea to the southern Jordanian port of Aqaba. Beginning in 2001, the pipeline will transport 212 million cubic feet of gas per day, gradually increasing to 318 million cubic feet per day by 2006. (DJ)

June 4 In a second attempt in recent months to raise world oil prices, Saudi Arabia, Venezuela, and Mexico agree, during a meeting in Amsterdam, to reduce their oil production by 450,000 barrels per day starting July 1, 1998. Under the agreement, Saudi Arabia will cut 225,000 barrels per day, Venezuela 125,000 barrels per day, and Mexico 100,000 barrels per day. These cuts are in addition to the reductions agreed to under the so called "Riyadh Pact" of March 1998. The three major oil exporters now will attempt to secure additional cuts from other oil exporters ahead of the June 16, 1998, meeting of the Gulf Cooperation Council and the June 24, 1998, meeting of the Organization of Petroleum Exporting Countries. (WSJ) (R) (DJ)

June 6 Jordan completes a feasibility study on a 650-mile oil pipeline, to run between the Iraqi and Jordanian capitals. The proposed pipeline would cost approximately $250 million, with a capacity of 100,000 barrels per day. Jordanian officials say that they expect to approach France, Italy, Germany, and Japan to help finance the line. (DJ)

June 7 In support of the Amsterdam agreement reached by Saudi Arabia, Venezuela, and Mexico, Qatar pledges to cut its crude oil output by 20,000 barrels per day. This latest pledge is in addition to the 30,000-barrel-per-day cut Qatar announced in March 1998. (DJ)

June 8 Nigeria's leader Gen. Sani Abacha dies after suffering a heart attack. Just hours after Gen. Abacha's death, Gen. Abdulsalam Abubakar is named the country's new head of state. (NYT) (DJ)

June 9 In its Oil Market Report for May 1998, the International Energy Agency (IEA) lowers its forecast for world oil demand in the second quarter of 1998 by 0.51 million barrels per day. The revision is due to the continuing Asian economic difficulties and weak U.S. oil demand in April and May 1998. At the same time, the IEA estimates that crude oil production by all members of the Organization of Petroleum Exporting Countries (OPEC) in May 1998 averaged 28.07 million barrels per day, down 250,000 barrels per day from its revised April 1998 production estimate. By contrast, a Dow Jones survey of industry participants estimates that total OPEC crude oil output in May 1998 was 28.167 million barrels per day, an increase of 172,000 barrels per day from its April 1998 estimate. The IEA also updated and revised its estimates of OPEC compliance with the 1.245-million-barrel-per-day production reduction agreed to at the OPEC meeting on March 31, 1998. OPEC crude oil production in May 1998, excluding Iraq (whose production was not included in the agreement), was estimated to be 1.0 million barrels per day below that for February 1998, the baseline month for the reduction agreement. This 80 percent compliance in May, the IEA noted, was in contrast with their revised estimate for April, when only 660,000 barrels per day, or just over 50 percent, of the targeted reduction was achieved. (DJ)

June 10 Six days after Saudi Arabia, Venezuela, Mexico pledged additional production cuts of 450,000 barrels per day effective July 1, 1998, Iran pledges additional cuts of 100,000 barrels per day. The new cuts are in addition to the 140,000-barrel-per-day reduction Iran pledged to make in March 1998. (DJ)

June 12 U.S. President Bill Clinton extends by 10 years the ban on offshore oil drilling for much of the United States. The offshore drilling ban was first imposed by President George Bush in 1990. The extended ban prevents drilling for oil and natural gas in most parts of the Atlantic and Pacific coasts until 2012. It does not include areas off the Texas and Louisiana coasts, where extensive drilling has been going on for many years. (WP) (NYT)

June 13 Cairn Energy announces that it has started production at the Sangu-1 natural gas field, Bangladesh's first operational offshore gas field. The initial flow rate from the field, located 30 miles southwest of Chittagong in the Bay of Bengal, has reached 20 million cubic feet per day, and is expected to increase to 160 million cubic feet per day over the next six to nine months. The field contains proven reserves of 850 billion cubic feet. Cairn holds a 55.25 percent stake in the field, with Halliburton holding 25 percent and Royal Dutch/Shell holding the remaining 19.75 percent. (DJ)

June 15 Russia's gas monopoly Gazprom notifies Belarus that it will reduce natural gas exports to Belarus by 30 to 40 percent because of unpaid bills. Belarus owes Gazprom an estimated $200 million for past natural gas supplies. (DJ)

June 16 Shell Nigeria shuts in 129,000 barrels per day of Bonny crude oil output due to a combination of community unrest in the Nembe and Odeama regions of Nigeria and a pipeline leak near the Nun River flowstation. Shell has declared force majeure effective June 19, 1998, through the end of the month, affecting a total of six Bonny crude cargoes. The cargoes are expected to be delayed for one to two days. (DJ)

June 16 At a meeting of oil ministers from the six-nation Gulf Cooperation Council (GCC), the United Arab Emirates (UAE) and Kuwait each pledge to cut their oil production by 75,000 barrels per day, while Oman pledges to cut its output by 20,000 barrels per day. These GCC cuts follow a second round of production cuts announced by Saudi Arabia, Venezuela, and Mexico on June 4, 1998. The latest production cuts from UAE, Kuwait, and Oman will take effect on July 1, 1998. (DJ) (WSJ)

June 17 Boris Nemtsov, Russia's deputy prime minister, announces that Russia will cut oil exports by 63,000 barrels per day beginning July 1, 1998, to support efforts by other oil producers to boost world oil prices. Nemtsov says that the cut is equivalent to 1 percent of Russia's daily oil production. (DJ)

June 18 Shell Nigeria reopens four of five Bonny crude oil flowstations in the Nembe and Odeama Creek regions. The flowstations were shut on June 8, 1998, due to local community unrest. A spokesman for the company says that resumption of operations at the flowstations means that the force majeure announced on June 16, 1998, for the rest of June, will only cause a delay of one day to cargo loadings. Six cargoes will be affected by the delay. (DJ)

June 18 U.S. President Bill Clinton nominates Bill Richardson to be the next Secretary of Energy, replacing Federico Peña, and nominates Richard Holbrooke to replace Richardson as the U.S. ambassador to the United Nations. (DJ)

June 18 Belgian oil company PetroFina SA announces its seventh oil and natural gas discovery offshore Vietnam. It is the company's second gas-only discovery, yielding 36 million cubic feet per day of natural gas. (DJ)

June 19 The United Nations (U.N.) Security Council unanimously approves a resolution allowing Iraq to spend $300 million on spare parts for its oil industry. The funding is intended to help Iraq increase oil exports under the fourth phase of the U.N.'s oil-for-food program. The spare parts are expected to expand Iraq's oil export capacity from 1.6 million barrels per day to 1.8 million or 1.9 million barrels per day. (NYT) (DJ)

June 20 Egypt joins efforts by the Organization of Petroleum Exporting Countries (OPEC) and several non-OPEC nations to support sagging world oil prices by cutting 20,000 barrels per day from its own crude oil production. Egypt says the cut will take effect on July 1, 1998. However, Egypt also announces that its oil production will decline by 20,000 barrels per day by 1999 as a result of declining output from aging fields. (DJ)

June 23 Occidental Petroleum declares force majeure on the Cano Limon oil field in Colombia after five guerrilla attacks in four days on the Cano Limon pipeline, which carries crude oil out of the area. The field produces 152,000 barrels per day. Occidental last declared force majeure on the field in August 1997. (DJ)

June 24 The Organization of Petroleum Exporting Countries (OPEC) agrees, at its 105th ministerial conference, to another round of oil production cuts. In recent weeks oil prices have fallen to their lowest levels in more than a decade. OPEC members have agreed to cut production by 1.355 million barrels per day, effective July 1, 1998, bringing the group's total reductions since March 1998 to 2.6 million barrels per day. Together with promises from non-OPEC nations such as Russia, Oman, and Mexico, world oil producers have pledged to cut world-wide production by approximately 3.1 million barrels per day. (WP) (WSJ) (NYT)

June 24 Russia confirms that it will cut its oil production by 100,000 barrels per day effective July 1, 1998. (DJ)

June 29 Saudi Arabia calls for a new alliance of seven to nine major oil-producing countries, establishing an ad-hoc group that would work together to raise oil prices and reduce the glut of oil in the current market. Saudi Arabia, Venezuela, and Mexico currently are in high-level negotiations to create the new alliance, which may also include Iran, Iraq, Kuwait, United Arab Emirates, and possibly Libya and Norway. (WSJ)

June 29 Amoco announces plans for its TransCaspian Gas Pipeline System project which will transport natural gas from Turkmenistan to markets in Turkey and Europe. The $2.4 billion, 750-mile pipeline will start near Turkmenbashi in western Turkmenistan, extending across the Caspian Sea basin, to a landing point near Baku, Azerbaijan. The line will continue across Azerbaijan and Georgia to Erzurum, Turkey, and link into the Turkish gas transportation grid. Construction is expected to take three years, and the pipeline will have an initial capacity of 350 billion cubic feet per year, eventually increasing to 1.225 trillion cubic feet per year. (DJ)

June 29 Mexico's state-owned oil company Petroleos Mexicanos (Pemex) receives a $1 billion credit from the Export-Import Bank of Japan. Pemex says the money will be used to increase production at the Cantarell oil fields located in the Gulf of Mexico. (DJ)

June 30 Brazil's Petroleo Brasileiro SA (Petrobras) and five other companies sign an agreement to build a 373-mile natural gas pipeline between the Brazilian cities of Uruguayana and Porto Alegre. The pipeline is expected to be operational in December 2000 with a capacity of 424 million cubic feet per day. Petrobras' partners in the project are Total Global Gas Ventures, Nova, YPF SA, Techint SA, and Compania General de Combustibles SA. (DJ)

July 1 Johnston Southern Development, a joint venture between U.S. companies Southern Energy and Johnston Development, signs an agreement with Shanxi Enhua Energy to develop a $500 million power project in China. Johnston Southern Development will build two-300-megawatt, coal-fired power plants in Shanxi province near the city of Gujiao. The project is one of the first large-scale power plants to be sponsored by China's coal industry. Site preparation is expected to begin in 1999. Shanxi Enhua will hold a 51 percent stake in the project, with Johnston Southern holding the remaining 49 percent stake. (DJ)

July 2 Iran's National Iranian Oil Company (NIOC) announces that it is seeking foreign investors for a number of onshore and offshore development projects. The onshore projects include the Ceshmeh Khosh gas injection project and the Darquain, Masjed-e-Suleyman, Agha Jari, and the Central Zagrog oil fields, all of which would be offered on a buyback basis. Offshore development projects include the Nowrooz, Foroozan, Salaman, Sirri C and D blocks, Hendajan, Soroosh, South Pars oil fields, and a pilot development at Esfandiar. NIOC says that foreign investments may help Iran increase its offshore oil production capacity by 276,000 barrels per day by 2000 from a current rate of approximately 500,000 barrels per day. (DJ)

July 2 Amoco Kazakhstan and Turkish Petroleum Overseas form an equally-held joint venture, Tepco LLC, to explore for and produce oil and natural gas onshore in western Kazakhstan. Under the terms of the production sharing agreement, Tepco will commence immediate exploration of Central Territory Block B. Turkish Petroleum is a unit of Turk Petrolleri Anonim Ortakligi, Turkey's state oil company. (DJ)

July 3 The Royal Dutch/Shell Group (Royal Dutch) announces that it has withdrawn from a joint bid for Rosneft, Russia's only remaining state-owned oil company. Royal Dutch says that low oil prices, which would limit returns from the project, and financial turmoil in Russia contributed to its decision to pull out of the bid. Royal Dutch's Russian partners in the bid are Lukoil and Gazprom. (NYT)

July 5 Iraq and Jordan sign an agreement for the construction of an oil pipeline between the two countries. The pipeline is expected to replace a fleet of more than 3,000 tankers that currently transport Iraqi crude oil to Jordan. Jordan depends entirely on Iraq for oil and currently incurs $50 million per year in transportation fees. (DJ)

July 6 Russia and Kazakhstan sign an agreement that divides the northern part of the Caspian Sea seabed into separate Russian and Kazakh sectors, recognizing Kazakhstan's claim to the oil near its coastline. The agreement also provides both nations with equal access to the Caspian's fishing grounds. The five nations that surround the Caspian Sea - Russia, Kazakhstan, Azerbaijan, Turkmenistan, and Iran - have argued for years over who owns the oil in the Caspian seabed. Previously, Kazakhstan, Azerbaijan, and Turkmenistan, the three nations with oil near their coastlines, had called for dividing the Caspian into national sectors, while Russia and Iran, which have little or no oil near their coasts, had advocated sharing the Caspian's resources. Although Azerbaijan, Turkmenistan, and Iran are not part of the settlement, it may set a precedent for future agreements among the Caspian nations. (NYT) (WP) (DJ)

July 7 Following the Royal Dutch/Shell Group's action on July 3, 1998, British Petroleum (BP) becomes the second major oil company to withdraw from a possible bid for Rosneft, Russia's last state-owned oil company. BP intended to bid with its Russian partner Omeximbank, which controls Russian oil company Sidanco. The Russian government is now once again considering postponing the privatization of Rosneft until the end of 1998. The sale of Rosneft originally was scheduled for May 1998. (WSJ)

July 7 Hungary's new government announces that it will discontinue the privatization of the country's energy sector, leaving Hungarian Electricity Works MVM's nuclear power plant, Paks Atomeromu, under state control. This action halts a planned sale of up to 49 percent of MVM to private investors. The previous government privatized Hungary's regional electricity and natural gas distributors and its power generators. (DJ)

July 8 Following a small fire, Chevron shuts a 170,000-barrel-per-day crude unit at its El Segundo, California refinery. A date for restarting the unit is currently unknown. The El Segundo refinery has a total crude oil capacity rating of 258,000 barrels per day. (DJ)

July 9 For the second time in two months, the Russian government postpones the sale of state oil company, Rosneft. The announcement comes just days after British Petroleum and the Royal Dutch/Shell Group withdrew from their respective bidding partnerships. Russian officials now say that the sale will take place in September or October 1998. (NYT)

July 9 Mobil of Venezuela announces that Venezuelan engineering company Vepica and Jantesa and Japan's JGC have won a $500 million contract to develop a crude oil upgrading unit for the Cerro Negro heavy crude project located in the Orinoco Belt. Mobil is the operator of the project. The upgrading unit will transform extra-heavy 8.5° API crude into lighter 16° API crude. The unit is expected to be completed in 2001, at which time the crude output of the Cerro Negro project will double to 120,000 barrels per day from an initial level of 60,000 barrels per day in 1999. (DJ)

July 9 In its June 1998 monthly oil market report, the International Energy Agency (IEA) projects that world oil demand in 1998 will be 1.1 million barrels per day higher than in 1997. This is about half the incremental demand in 1997, which was 2.1 million barrels per day. In addition, IEA reports that June 1998 Organization of Petroleum Exporting Countries (OPEC) crude production fell 330,000 barrels per day to 27.95 million barrels per day from 28.28 million barrels per day in May 1998. When compared to February 1998, OPEC production from non-Iraqi sources has been cut by 970,000 barrels per day, which is approximately 80 percent of the 1.245 million-barrel-per-day target agreed to by OPEC in March. A Dow Jones survey of industry observers reports similar findings. The survey finds that OPEC production totaled 27.853 million barrels per day in June 1998, a decrease of 314,000 barrels per day from May 1998 output. (DJ)

July 10 Monument Oil and Gas signs a production-sharing agreement with Turkmenneft, Turkmenistan's state oil company, and Mobil Exploration & Production Turkmenistan for the Garashsyzlyk concession area, located in western Turkmenistan. The agreement covers development and production of oil and natural gas over a 1,700 square mile area. Mobil holds a 52.4 percent share in the deal, while Monument holds a 27.6 percent share and Turkmenneft 20 percent. (DJ)

July 13 South Korea's Samsung agrees to build a $240 million oil refinery for Ghana's state-owned Tema Oil Refinery. Construction of a residual fluid catalytic cracking unit will begin later this year and is expected to be complete in 2001. The unit will refine about 93,000 barrels per day of residual fuel oil, producing various types of oil products such as gasoline and liquefied petroleum gas. (DJ)

July 13 Access Industries of the U.S. suspends the extraction and shipment of coal from the Bogatyr mine located in Kazakhstan. Bogatyr is the world's largest coal mine. Sergey Karpukhovich, the company's vice-president, cites a $20 million debt for delivered coal accumulated by Kazakh consumers and the tightening of tax laws as reasons for the suspension. (DJ)

July 14 Sonangol, Angola's state oil company, and Essor Exploration Angola, a subsidiary of Exxon, discover a new offshore oil field located about 224 miles northwest of Luanda, Angola. The field is called Hungo One and has an estimated production capacity of 16,000 barrels per day. It is the third discovery in Block 15 in recent months. Essor holds a 40 percent stake in Block 15, with BP Exploration Angola holding 26.67 percent, Italy's Agip Angola 20 percent, and Norway's Den Norske Stats Oljeselskap 13.33 percent. (DJ)

July 15 Iraq and Syria sign an agreement to build a second oil pipeline between the two countries. No information is available on the new line's capacity or the route it will take; however, U.S. State Department spokesman James P. Rubin states that implementation of the agreement would be a violation of United Nations sanctions against Iraq. Two days earlier, Syria agreed to reopen an existing oil pipeline, linking Iraq's Kirkuk oil fields to the Mediterranean terminals of Banias in Syria and Tripoli in Lebanon. Syria closed the line in 1982 in support of Iran during the Iran/Iraq war. The pipeline has an estimated capacity of 650,000 barrels per day and is expected to be operational within a few months. However, use of the pipeline will require United Nations approval. (DJ)

July 15 Australia's Boral Ltd. confirms that its Bass Strait drilling program yielded estimated reserves of between 450 billion and 600 billion cubic feet of natural gas in the Yolla Field. Partners in the Yolla Field include Boral with a 30.5 percent interest, Premier Petroleum with 30.5 percent, Cue Energy Resources with 14 percent, CalEnergy Gas with 20 percent, and Santos with 5 percent. (DJ)

July 16 The U.S. blocks the proposed August price formula for Iraqi crude oil over concerns that the Kirkuk grade is priced too low for the European market. It is the first time Iraq's crude oil price formula has been questioned since the United Nations' oil-for-food program began in 1996. (DJ)

July 17 Mobil Oil and the Royal Dutch/Shell Group announce that they are pulling out of the $3 billion Camisea natural gas project in Peru. The companies indicate that demands from the Peruvian government for local gas supplies at reduced rates made the project unprofitable. Camisea holds an estimated 11 trillion cubic feet of natural gas, and the development project was considered to be a key to Peru's economic development. (WSJ) (WP)

July 20 Abida tribesmen blow up part of Yemen's Marib-Ras Issa oil pipeline in protest of government price hikes on gasoline, kerosene, and cooking gas. This marks the eighth attack on Yemeni oil and gas pipelines since June 19, 1998. The 272-mile pipeline carries 220,000 barrels per day of oil and runs from Marib to the Red Sea province of al-Hudaydah, 140 miles west of Yemen's capital Sanaa. (DJ)

July 21 British Petroleum, Amoco, and Ramco Energy sign contracts to develop Azerbaijan's Caspian Sea oil resources. In three separate contracts, the companies have pledged to invest as much as $13 billion over the next 15 years. The Caspian Sea region is said to contain approximately 30 billion barrels of oil reserves, comparable to the North Sea region. (NYT)

July 21 Oil analysts calculate that oil export revenues of the Organization of Petroleum Exporting Countries (OPEC) have fallen by a third in 1998 due to the decline in oil prices. According to Petrostrategies of Paris, OPEC's collective export revenues have fallen from $89.6 billion in the first six months of 1997 to $60.7 billion in the first six months of 1998. Analysts predict that for all of 1998, OPEC oil export revenues will fall 30 percent from a 1997 total of $121.5 billion. Export revenues have declined for almost all OPEC members, with the exception of Iraq, whose revenue has increased 20 percent in the first six months of 1998 under the United Nations= oil-for-food program. (NYT)

July 22 Unocal agrees to pay fines of $43.8 million to California for contaminating the state's Central Coast with millions of gallons of petroleum over four decades. Unocal allowed a refined oil product, called diluent, to gradually leak from an underground pipeline at its Guadalupe Oil Field in San Luis Obispo County. As part of the settlement, $9 million will be used to restore natural resources, $15 million will fund water quality improvement projects, and $11.1 million will create emergency response programs for future oil spills and other pollution incidents on the Central Coast. (LAT)

July 22 In response to poor market conditions, Singapore Refining Company (SRC) cuts crude oil throughput by 45,600 barrels per day, or 16 percent, at its 285,000-barrel-per-day refinery. SRC will continue to run the refinery at this lower throughput level until mid-August 1998, when the company will decide on an optimal operating level. SRC is a joint venture made up of Singapore Petroleum, British Petroleum, and Caltex Petroleum. (DJ)

July 22 Rep. Thomas Bliley (R-VA), Chairman of the U.S. House Commerce Committee, abandons efforts to pass electric industry restructuring legislation in 1998. The legislation is designed to end utilities protected monopoly service territories and institute retail electric competition nationally. (DJ)

July 23 In response to U.S. opposition to the August pricing plan for Iraqi crude oil, Iraq offers the United Nations a revised pricing mechanism for Iraq's August oil exports. The revised pricing formula adjusts the price of Kirkuk and Basrah Light for the European, U.S. and Asian markets. The U.S. had been concerned that, under the original pricing plan, prices for crude oil headed for European markets were too low. (DJ)

July 27 Russia announces plans to sell a five percent stake in RAO Gazprom, the country's largest company and the world's largest natural gas company, with the Russian government retaining a 35 percent stake in the company. The five percent stake is valued at $500 million, although the government may get more if the shares are sold to foreign investors. The Royal Dutch/Shell Group and Italy's ENI SpA are considered to be probable contenders for the shares. Gazprom holds nearly 40 percent of the world's proven natural gas reserves. (WSJ)

July 27 Nigeria's leader General Abdulsalam Abubakar cancels oil concessions granted to Nigerian companies at the time of previous leader General Sani Abacha's death on June 8, 1998. General Abubakar also reportedly is no longer awarding new oil concessions or prospecting leases. Companies that are affected by the decision include Malabor Petroleum, DICS Petroleum, Feuimarc Petroleum, and Continental Petroleum. (DJ)

July 29 British Petroleum (BP) begins oil production at its Schiehallion field at an initial rate of 30,000 barrels per day. The field is located offshore northern Scotland. The development is expected to produce 340 million barrels from the main field and an additional 85 million barrels from the nearby Loyal reservoir. Peak production is expected to reach 154,000 barrels per day. BP is the operator of the field and holds a 33.35 percent stake. BP's partners include Royal Dutch/Shell Group (33.35 percent), Amerada Hess (15.66 percent) and Murphy Oil (5.88 percent) of the U.S., Norway's Statoil (5.88 percent), and Australia=s OMV (5.88 percent). (DJ)

July 29 Anadarko Petroleum announces that it has discovered oil and natural gas at the Eugene Island South Addition Block 346 in the Gulf of Mexico, located approximately 75 miles offshore Louisiana. Anadarko estimates that the Tanzanite field contains reserves of at least 140 million barrels of oil equivalent. (DJ)

July 29 The Indonesian government postpones exploration of the giant Natuna natural gas field due to the economic crisis in Thailand and the oversupply of liquefied natural gas in the world market. Thailand was expected to be the main buyer of Natuna gas. Production from the field was expected to begin between 2003 and 2007, but Indonesia government now says exploration may not restart until 2007. The Natuna field is located in the Natuna Sea about 700 miles north of Jakarta. (DJ)

July 29 The Russian nuclear safety federation approves the construction of two 640-megawatt nuclear power reactors on the Kola peninsula, located in northwest Russia near Finland. The reactors will be VVE640 type units, considered to be the most advanced reactors in the world. However, Heikki Aulamo, a spokesman at the Finnish Radiation and Nuclear Safety Authority, says that the reactors may never be built due to Russia's current financial situation,. (DJ)

July 30 Dutch energy and water company Nuon NV opens Asia's largest and first commercial wind farm, located on the island of Nan'ao near the southern Chinese city of Shantou. Nuon developed the farm with three Chinese partners, Shantou Electric Power Board, China Fulin Wind Power Development and Zhen Neng Wind Power. The wind farm has a capacity of 24 megawatts, and the electricity generated by the farm will be fed directly into the Chinese grid. It is expected to service approximately 60,000 households. (DJ)

July 31 The U.S. Senate confirms the nomination of Bill Richardson as Secretary of Energy. Richardson replaces Federico Peña, who resigned in June 1998. (DJ)

August 2 Oman LNG signs an initial 20-year agreement with MetGas of India, an affiliate of Enron Corporation, to supply MetGas with 1.2 million metric tons (58.44 billion cubic feet) per year of liquefied natural gas (LNG). Deliveries are scheduled to begin in late 2001, and the LNG will be used to generate electricity at a 2,450-megawatt power plant currently under construction on the Indian coast, 150 miles south of Bombay. (DJ)

August 3 The Caspian Pipeline Consortium (CPC) submits the final draft of a construction feasibility study for a Caspian Sea oil pipeline to Russia's regional authorities for approval. The $2 billion, 981-mile pipeline will transport 1.3 million barrels per day of oil from Kazakhstan's Tengiz oil field to the Russian port city of Novorossiisk. Construction is scheduled to begin in late 1998 or early 1999, and the line is expected to be operational in 2001. (DJ)

August 3 The Mexican and Venezuelan governments renew the San Jose Accord, under which these two countries provide crude oil and refined products at favorable terms to other countries in Central America and the Caribbean. Under the annually-renewed accord, participating countries pay for oil at the market price when the international price is below $15 per barrel. When the price of oil is above $15 per barrel, a portion of the oil price is converted into credits that are used to finance development projects in participating countries and trade between participating nations and the two supplier countries. Countries participating in the accord, in addition to Mexico and Venezuela, include: Barbados, Belize, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, and Panama. (DJ)

August 4 Japan's Nuclear Safety Commission approves plans for the construction of a commercial nuclear power plant, the country's first nuclear plant in 10 years. The light-water reactor will be located in the village of Higashidori, 392 miles northeast of Tokyo, and will have a generation capacity of 1.1 million kilowatts. Construction is set to begin in December 1998, with operations expected to begin in July 2005. The plant will be operated by Tohoku Electric Power. (DJ)

August 5 In protest against economic sanctions imposed on Iraq following the Persian Gulf War, President Saddam Hussein freezes cooperation with United Nations (UN) weapons inspectors. UN weapons inspectors have been searching suspected weapons sites in Iraq since 1991 in an attempt to eliminate Iraq's weapons of mass destruction. (DJ)

August 5 Lone Star Gas International, a unit of Texas Utilities, wins a 30-year concession to distribute natural gas throughout Mexico City, Mexico. Over the first five years of the concession, Lone Star and its two local partners, Grupo Diavas and Controladora Comercial & Industrial, will invest $125 million expanding Mexico City's natural gas distribution network. (WSJ)

August 5 Chevron U.S.A. and Arco Alaska agree to equal ownership of leases on the Alaskan North Slope. Each company will hold a 50 percent stake in 35 tracts consisting of 200,000 acres southwest of the Kuparuk and Alpine oil fields. In addition, the companies will each hold a 50 percent stake in 16 tracts in the McCovey/Salmon area, including 196,000 offshore acres of the Prudhoe Bay oil field in the Beaufort Sea. (DJ)

August 6 The U.S. Interior Department announces that it will open a new area of the Alaska North Slope wilderness to oil and gas leasing. Interior Secretary Bruce Babbitt says exploration will be allowed on a four million acre parcel in the northeastern quarter of the National Petroleum Reserve, west of the Prudhoe Bay oil field. However, an area north and east of Teshekpuk Lake near the Beaufort Sea, will remain off limits. The National Petroleum Reserve is estimated to contain 2.2 billion barrels of oil. (NYT) (WSJ) (WP)

August 6 Abdulillah al-Tikriti, director-general of the economy department at Iraq's Foreign Ministry, reports that Iraq has discovered a new oil field and a new natural gas field. The oil field is located in the northern part of Iraq, with estimated reserves of 500 million barrels. The natural gas field, located in the desert west of Baghdad, contains estimated reserves of 21.2 trillion cubic feet. (DJ)

August 7 In its July 1998 report, the International Energy Agency (IEA) estimates that the Organization of Petroleum Exporting Countries (OPEC) produced 27.81 million barrels per day of oil in July 1998, down 355,000 barrels per day from 28.17 million barrels per day in June 1998. Excluding Iraqi production, OPEC produced 25.53 million barrels per day in July. The figures show OPEC to be 56 percent compliant with production cuts agreed to earlier this year. In addition, the IEA reduces its projection of world oil demand in 1998 by 200,000 barrels per day to 74.7 million barrels per day, a rate just 900,000 barrels per day higher than demand in 1997. (DJ) (WSJ)

August 7 A Dow Jones survey of oil market observers shows Organization of Petroleum Exporting Countries (OPEC) production for July at 27.67 million barrels per day, down from 27.853 million barrels per day in June. Excluding Iraq, OPEC produced 25.41 million barrels per day, representing 61 percent compliance with agreed production cuts. (DJ)

August 10 The Middle East Economic Survey (MEES) reports that U.S. imports of Iraqi crude oil have jumped to 100,474 barrels per day in the first four months of 1998, compared to an average of 85,989 barrels per day for 1997. MEES also notes that the number of U.S. companies importing Iraqi crude oil has fallen from 10 in 1997 to 3 thus far in 1998-- Chevron, Clark, and Exxon. (DJ) (Editor's Note: EIA estimates U.S. imports of Iraqi crude oil averaged 89,123 barrels per day in 1997 and 100,475 barrels per day in the first four months of 1998.)

August 11 British Petroleum announces that it will acquire Amoco for $48.2 billion in stock. If the merger is approved by regulators and shareholders of both companies, it will be the largest oil industry merger and the largest foreign take-over of a U.S. company to date. The company will be known as BP Amoco, and it will be the world's third-largest multinational oil company in terms of net income behind Exxon and Royal Dutch/Shell Group. (NYT) (WSJ) (WP)

August 11 Bolivia announces the discovery of a new gas field in the southern part of the country near its border with Argentina. The San Alberto X field contains natural gas reserves of 1 trillion cubic feet and is expected to produce 35.5 million cubic feet per day. Production from the field will feed into a 1,900-mile pipeline currently under construction between Santa Cruz, Bolivia and the Brazilian state of Rio Grande do Sul. Interests in the field are held by Petrobras Bolivia, Petrolera Andina, and Total Exploration Bolivie. (DJ)

August 13 As part of Russia's continuing privatization program, the government announces that it will sell a five percent stake in Gazprom as a single lot, at a starting price of $1.65 billion. The sale will leave the government with a 35 percent stake in the natural gas monopoly. In other privatization news, Gazprom President Rem Vyakhirev announced on August 6, 1998, that Gazprom will not bid for a controlling stake in Rosneft, Russia's only remaining state oil company. (DJ)

August 13 Saudi Arabia's state oil company Aramco notifies U.S., European, and Japanese crude oil lifters that it will cut September 1998 exports by 18 percent. The cut is much higher than traders anticipated, causing a jump in September crude oil prices. (DJ)

August 13 Data from the U.S. Energy Information Administration show that Saudi Arabia was the leading exporter of crude oil to the highly competitive U.S. market in June 1998. U.S. imports of Saudi crude oil averaged 1.585 million barrels per day in June, followed by Venezuela at 1.424 million barrels per day, and Mexico at 1.379 million barrels per day. (DJ)

August 13 Petroecuador, Ecuador's state-run oil company, reports that it has increased its crude oil transport capacity through the country's two main oil pipelines by nearly 30,000 barrels per day, to more than 400,000 barrels per day. The company says the capacity expansion work cost $787,000 and was completed by the Ecuadorean unit of Argentine oil company YPF SA (DJ)

August 16 The National Iranian Drilling Company signs a contract worth $25 million with Turkmenistan to drill four wells in the Turkmen-Bashi region. The drilling work will be carried out over the next 18 months. (DJ)

August 17 Shell Philippines Exploration, a unit of Royal Dutch/Shell Group, awards a $500 million contract to Allseas Marine Contractors for the construction of a 314-mile natural gas pipeline in the Philippines. The new line will link the Malampaya gas fields, located near Palawan Island, with a landing terminal in Tabangao, Batangas. (DJ)

August 18 Phillips Petroleum begins oil and gas production from Ekofisk II, the company's $2.5 billion North Sea redevelopment project. As part of the project, Phillips phased out or modified 14 existing platforms and installed 31 miles of new pipeline. Production capacity is expected to be 306,000 barrels per day of oil and 789 million cubic feet per day of natural gas, approximately 20 percent above initial expectations. (DJ)

August 18 BG PLC and Atlantic Richfield (Arco) report that proven natural gas reserves contained within their production sharing contract blocks in Irian Jaya, Indonesia have more than doubled to 14.4 trillion cubic feet. The reserves are located in the BG-operated Muturi block and the Arco-operated Wiriagar and Berau blocks in Berau Bay. Natural gas from these blocks will supply the Tangguh liquefied natural gas project of Pertamina, the state-run oil company of Indonesia. The project is expected to come online between 2003 and 2004. (DJ)

August 20 Iraq and Syria sign an agreement to reopen an oil pipeline linking Iraq's Kirkuk oil fields to Mediterranean terminals in Banias, Syria and Tripoli, Lebanon. Syria closed the pipeline in 1982 in support of Iran during the eight-year Iran-Iraq War. The pipeline has an estimated capacity of 650,000 barrels per day. Since Iraqi oil exports currently operate under the United Nations (UN) oil-for-food program, Iraq will need UN approval before the pipeline can be reopened. (DJ)

August 20 Following its regular 60-day review of trade sanctions against Iraq, the United Nations (UN) Security Council decides to extend the sanctions and expresses concern over Iraq's continuing refusal to cooperate with arms inspectors. On August 5, 1998, Iraq suspended cooperation with UN weapons inspectors, stating that it has destroyed its banned weapons of mass destruction and calling on the UN to lift the trade sanctions. (DJ)

August 21 Due to Afghanistan's continuing civil war and recent U.S. attacks on suspected terrorist training camps inside Afghanistan, Unocal suspends plans for the construction of a $2 billion natural gas pipeline that would run from Turkmenistan to Pakistan via Afghanistan. Unocal has stressed that the gas pipeline project will not proceed until an internationally- recognized government is in place. To date, only three countries -- Saudi Arabia, Pakistan and the United Arab Emirates -- have recognized Afghanistan's Taliban government. (DJ) (WSJ)

August 22 A senior official from Aramco, Saudi Arabia's state oil company, announces that production has started at the company's new light crude Shaybah oil field. Production capacity is expected to be 500,000 barrels per day. Shaybah is located in an area of the empty quarter in southeast Saudi Arabia, near the border with the United Arab Emirates. The field contains an estimated seven billion barrels of 40EB 42E API gravity extra light crude oil. (DJ)

August 25 French oil company Elf Aquitaine abandons its plan to invest more than $500 million and acquire a 12 percent stake in Russian oil company Sibneft. This latest actions follows Elf's announcement on August 21, 1998 to delay its plan to invest in the Russian oil firm. (WSJ) (DJ)

August 25 Unocal reports that its West Seno #2 discovery well offshore Indonesia tested at a rate of 10,069 barrels per day of 39E API gravity oil and 9.5 million cubic feet per day of natural gas. The West Seno #2 well is located on the Makassar Strait production-sharing contract area. Unocal is the operator of Makassar Strait and holds a 50 percent interest, with Mobil holding the remaining 50 percent. (DJ)

August 27 Belgian petroleum firm Petrofina announces that production from the Badami oil field in Alaska commenced on August 24, 1998. This field's reserves are estimated at 120 million barrels and production capacity is expected to be 20,000 barrels per day. Petrofina holds a 30 percent stake in the field, with British Petroleum holding the remaining 70 percent. Badami is located 35 miles east of Prudhoe Bay. (DJ)

August 28 At the Daqing oil field, China has closed 543 wells, 1,104 wells are inundated, and daily production is down approximately 1 percent due to flooding from the Nenjiang River in northeast China's Heilongjiang Province. Daqing is China's largest oil field and accounted for about 50 percent of the country's total onshore production in 1997. Flooding along the Nenjiang and Songhua Rivers has reduced crude oil output at the Jilin, Liaohe, and Daqing oil fields by around 5 percent. (DJ)

August 29 Mobil Corporation agrees to pay $56.5 million to settle lawsuits with the U.S. Federal Government and the State of Texas over royalties for oil extracted from public and Indian lands. Both suits claimed that Mobil undervalued the oil taken from these lands. Mobil will pay $45 million to settle with the Federal Government and the Navajo and Jicarilla Apache tribes and $11.5 million to settle with Texas. (WP) (NYT)

August 31 Japan's Mitsubishi Oil reports that production has started at its Rang Dong oil field, located in Block 15-2 offshore southern Vietnam. Peak production is expected to reach 45,000 barrels per day. Mitsubishi holds a 82.5 percent interest in Block 15-2, with PetroVietnam, Vietnam's state-run oil and gas company, holding the remaining 17.5 percent. (DJ)

August 31 Indonesia's President B.J. Habibie approves Atlantic Richfield's plan to build a $4 billion liquefied natural gas (LNG) complex in Irian Jaya, Indonesia. LNG from the complex will be used to meet future demand for natural gas from power utilities in Japan, South Korea, and Taiwan. (DJ)

September 2 China discovers its first large coalbed methane gas field, located in northern China's Shanxi province. The field's proven reserves are estimated to be 1.9 trillion cubic feet, with annual production expected to reach 35 billion cubic feet by the end of 1998. (DJ)

September 3 France's Elf Aquitaine discovers its fourth oil field in Block 17 offshore Angola. The discovery is located at the Lirio 1 well which tested at an initial rate of 11,000 barrels per day. Elf holds a 35 percent stake in Block 17 and is the block's operator for a consortium consisting of Esso Exploration, a unit of Exxon (20 percent); British Petroleum (16.67 percent); Den Norske Stats Ojeseskap (13.33 percent); Norsk Hydro (10 percent); and Petrofina (5 percent). (DJ)

September 3 The U.S. Senate approves a spending bill providing the U.S. Department of Energy with $420 million at current prices to buy oil for the Strategic Petroleum Reserve (SPR). If a joint House-Senate conference committee preserves the measure, it could add 29 million barrels of crude oil to the SPR, which currently contains 563 million barrels. (DJ)

September 4 Royal Dutch/Shell and Texaco announce that they will combine their European refining and marketing activities. Shell and Texaco expect to save approximately $200 million by joining operations. Shell will hold 88 percent of the venture, with Texaco holding 12 percent. Together, the two companies will control 19 refineries and process 2.1 million barrels per day of oil, or about 15 percent of European capacity. The companies say that the deal could be finalized by mid-1999. (NYT) (WSJ)

September 7 Norway's Saga Petroleum signs a joint study agreement with the National Iranian Oil Company to develop an onshore/offshore area in the northern part of the Persian Gulf. The area to be studied includes the Dara Block and an undeveloped section of the Hendijan field. The agreement provides for a 12-month exploration study. (DJ)

September 9 The United Nations (U.N.) Security Council unanimously agrees to a resolution suspending periodic reviews of economic sanctions imposed on Iraq. The resolution is in response to Iraq's August 5, 1998, decision to break off cooperation with U.N. arms inspectors. The Security Council has been conducting regular 60-day reviews and more comprehensive six-month reviews of the sanctions. (DJ) (WSJ)

September 10 The U.S. Energy Information Administration (EIA) reports that in 1997, for the first time in 10 years, U.S. proved reserves of crude oil increased. Crude oil reserves reached 22.546 billion barrels, up 2.4 percent from 22.017 in 1996. In addition, EIA reports that natural gas reserves increased for the fourth year in a row. (DJ)

September 11 The Paris-based International Energy Agency estimates that in August 1998, the Organization of Petroleum Exporting Countries (OPEC) implemented 83 percent of their pledged oil production cutbacks. OPEC production, excluding Iraq, fell to 24.83 million barrels per day. Total OPEC production for August 1998 declined to 27.26 million barrels per day from 27.65 million barrels per day in July 1998. Meanwhile a Dow Jones survey of oil market observers indicates that OPEC was 86 percent compliant with its oil production cutbacks. According to Dow Jones, OPEC's August production, excluding Iraq, fell to 24.757 million barrels per day. Total August output declined to 27.058 million barrels per day from 27.67 million barrels per day in July 1998. (DJ) (WSJ)

September 14 Phillips Petroleum and Japanese-owned Indonesian Petroleum Company sign an exploration agreement with Kazakhstan to acquire stakes in 10 blocks totaling 2,000 square miles in the Kazakhstan sector of the Caspian Sea. The exploration area is said to contain an estimated 6 billion barrels of recoverable oil reserves. Other stakeholders include Royal Dutch/Shell, Mobil, British Petroleum, Statoil, Agip, Total, and British Gas. Over the next six years, the consortium will drill six wells and conduct seismic surveys. (NYT) (DJ)

September 14 Anadarko Petroleum reports that its Tanzanite No. 1 well tested 21,917 barrels per day of oil and 29.7 million cubic feet per day of natural gas. The well is located in the Gulf of Mexico approximately 75 miles offshore Louisiana. (DJ)

September 17 Lasmo announces that peak oil production from its Dacion development in eastern Venezuela will hit 120,000 barrels per day by the end of 2002. This is a 650 percent increase compared to the 16,000 barrels per day forecast for the end of 1998. The Dacion development contains estimated reserves of 550 million barrels of oil. Lasmo holds a 90 percent stake in the project, with Venezuelan state oil company Petroleos de Venezuela holding the remaining 10 percent. (DJ)

September 18 Mobil's Canadian unit receives six oil and gas exploration licenses totaling more than one million acres on the Grand Banks, offshore Newfoundland. Two of the licenses are within the eastern edge of the Flemish Pas Basin, while the remaining four are within the Jeanne d'Arc basin. Mobil plans to invest $100 million exploring these areas over the next five years. (DJ)

September 18 Arco China (a unit of Atlantic Richfield), Texaco China, and Chinese National Offshore Oil agree to develop the Qinhuangdao 32-6 offshore oil field, located in China's Bohai Bay. Oil production is expected to begin in mid-2001 and to reach 60,000 barrels per day by 2002. Chinese National Offshore Oil will be the operator of the field with a 51 percent interest and Arco and Texaco will each hold a 24.5 percent interest. (DJ)

September 23 Texaco acquires a 65 percent stake in the North Buzachi oil field in west Kazakhstan from Nimir Petroleum, a privately-owned Saudi Arabian oil company. Nimir will continue to hold the remaining 35 percent stake. North Buzachi is an undeveloped onshore oil field, located 120 miles north of the Caspian Sea port of Aktau. The field contains estimated reserves of 1 billion to 1.5 billion barrels of oil. Texaco reports that production could begin within two to four years. (DJ)

September 25 Egypt and Jordan announce the testing of the linkage of their power systems as the first step toward a proposed electricity grid extending east to the Persian Gulf and west to Morocco and even Europe. The Egypt-Jordan link should begin commercial operation in October. The power is carried by cables that are lifted over the Suez Canal by 740 foot towers and then run along the floor of the Gulf of Aqaba between the two nations. (DJ)

September 27 Chile switches to summer time three weeks earlier than in previous years, a move ordered by the government to save energy in the wake of a long drought. (DJ)

September 27 Turkey restores full diplomatic ties with Iraq after nearly six years of all-but-frozen relations. Iraq's ambassador to Ankara left last year. It is not known whether Iraq's ambassador will now return. (DJ)

September 28 Japan's Ministry of International Trade and Industry decides to liquidate 27 oil exploration companies affiliated with the debt-ridden, state-run Japan National Oil Corporation (JNOC) as part of the Ministry's restructuring scheme. The Ministry estimates JNOC's losses for fiscal year 1998-1999 will amount to approximately $3 billion, some of which can be covered by proceeds from the sale of some of the subsidiaries. (DJ)

September 28 India's Foreign Investment Promotion Board approves 23 project proposals, including a liquefied natural gas (LNG) terminal in Kakinada on the eastern coast. The board also gave the go-ahead for a disinvestment proposal by state-owned Bharat Petroleum in relation to its liquefied petroleum gas storing and marketing joint venture with Caltex Petroleum. (DJ)

September 29 Finance Minister Mikhail Zadornov says that Russian oil companies' tax payments were 10 percent less than expected in September. Zardonov also indicates that natural gas monopoly Gazprom has not paid any taxes so far during September. (DJ)

September 30 Saudi Arabia asks several U.S. oil companies for proposals to develop its oil reserves. The topic is raised in a meeting between Saudi Crown Prince Abdullah and top executives from Atlantic Richfield, Chevron, Conoco, Exxon, Mobil, Phillips, and Texaco. (DJ, WP)

October 1 South Korea's oil refining sector fully deregulates, allowing for 100 percent foreign investment. Originally, South Korea had expected to fully deregulate its refining industry by January 1999, but it decided to move up the date in order to help reform its economy. (DJ)

October 2 An underwater pipeline leaks an estimated 155,000 gallons of oil into the Gulf of Mexico, forming a slick about 100 miles south of the mouth of the Mississippi River. (DJ)

October 4 Mexican Energy Minister Luis Tellez announces that his country will maintain oil export cuts for an additional six months, or until June 1999. As part of agreements earlier this year with producers from the Organization of Petroleum Exporting Countries, Mexico had already agreed to trim its exports by 200,000 barrels a day through the end of 1998. (DJ)

October 5 China begins exploration at one of its largest gas fields in Chengdu, capital of Sichuan province. The field is estimated to co