Page 18: of Maritime Reporter Magazine (November 1999)

Offshore Report Africa is second to the Gulf of Mexico with 46 floating production projects planned or under study. The North Sea is third with 41 projects, followed by Southeast Asia, Brazil and Australia. (See Chart 3) Investment In 2000 and Beyond The price per barrel of oil has steadily marched upward since earlier this year, driven primarily by the recovering economies in Asia and the output quotes enacted and strictly adhered to by OPEC nations. As the price of oil stabilizes, investment budgets for exploration and development should proceed upward as well. According to International Mar-itime Associates, recent developments are beginning to positively impact E&D. For example, it notes that: ? Conoco will increase capital spend-ing in 2000 to about $2.4 billion from $1.8 billion in 1999, contingent upon a $17 to $18 price per barrel. Drilling activity has increased at Conoco in recent months, and several rigs are e of the best reasons hoose an ACR product won't be apparent for years. Every five years, your EPIRB needs a check-up and a battery replace-ment to maintain maxi-mum operating capacity. Your SART needs a new battery every three years. Which is why a few years from now, you'll be especially glad you chose ACR. Not just because they are the most compact, technologically-advanced products in the world. But also because ACR makes it ACR Electronics, Inc. Battery Replacement Centers Alaska ? Anchorage ? Homer ? Kodiak California ? Mister ? Marina Del Rey ? Petaluma ? San Diego ? San Francisco ? San Pedro ? Santa Barbara ? Santa Cruz Florida ? Jacksonville ? Panama City ? Tampa ? Ft Myers ? Miami ? Ft. Lauderdale Hawaii ? Honolulu Louisiana ? Harvey-New Orleans ? Houma ? Metairie-New Orleans ? New Orleans Massachusetts ? Essex ? New Bedford Maine ? Portland ? Searsport Maryland ? Annapolis ? Baltimore Michigan ? Holland ? St. Clair Shores North Carolina ? Oriental New Jersey ? Secaucus Oregon ? Astoria ? Charleston Rhode Island ? Portsmouth South Carolina ? Charleston Texas ? Houston ? Pearland-Houston ? Webster-Houston convenient for you to quickly take care of this important maintenance requirement. ACR has an Authorized Battery Replacement Center or key distributor in just about every major port around the world. Call +1(954) 981-3333 or, in the USA, 1(800) 432-0227 to find the one nearest you. Virginia ? Norfolk Washington ? Tacoma ? Seattle ACR Electronics, Inc. International Distributor Locations Argentina ? Buenos Aires Australia ? ? Victoria Behrain ? Manama Melbourne Belgium ? Antwerpen Brazil ? Macae-RJ Chile ? Santiago ? Valparaiso China ? Xiamen Denmark ? Taastrup Finland ? Espoo France ? Nanterre Germany ? Banzin Gibraltar ? Waterport Greece ? Piraeus Iceland ? Reykjavik India ? Mumbai Israel ? Tel-Aviv Italy ? Milano Korea ? Seoul Mexico ? Juarez Netherlands ? Yerseke Netherlands Antilles ? Curacao New Zealand ? Auckland Norway ? Drammen Panama ? Balboa Peru ? Callao Poland ? Gdynia Portugal ? Lisbon Russia ? Espoo, Finland ? Moscow Saudi Arabia ? Dammam ? Jeddah Singapore ? Singapore South Africa ? Cape Town Spain ? Barcelona Switzerland ? Geneva Sweden ? Goteborg Trinidad ? Port of Spain United Arab Emirates ? Sharjah ? Dubai United Kingdom ? Tyne & Wear ? Dorset Uruguay ? Montevideo Venezuela ? Maracaibo ACR Electronics, Inc. Your Ultimate Way Out. - A Chelton Group Company 5757 Ravenswood Road, Fort Lauderdale, FL 33312 USA ? http://www.acrelectronics.com *Emergency Position Indicating Radio Beacon ACR Electronics, Inc. is registered by UL to ISO 9001. Circle 391 on Reader Service Card undergoing or planned for re-activation. ? Salomon Smith Barney, in its mid-year report, said a record number of survey respondents plan to increase E&P expenditures in 2000. According to the survey, 73 percent of the partici-pants said they plan to increase capital spending next year, and 65 percent said they expect E&P in 2000 to increase more than 10 percent. ? According to Offshore Data Service, the number of rigs working on turnkey wells in the Gulf of Mexico has risen to levels not seen for more than a year. ? Global Marine reports that day rates for offshore rigs increased 1.5 percent in July over the preceding month, fol-lowing a steady decline during the pre-ceding 14 months. Semisubmersible rates increased 2.6 percent; jack-ups .3 percent. In addition, the market value of oil service company stocks are clearly back in favor as well. Major drilling compa-nies have seen their stock price increase 75 to 175 percent since March, and ana-lysts have been upgrading many of the companies. Another indicator of the more positive mood in the sector in the increase in inquiries to construction companies to resurrect and update pro-posals on offshore projects that have lain dormant for 12 to 18 months. While the prediction of the course of oil pricing is part art, part science, there are currently no indicators, which would suggest a downturn by the end of the year, beginning of 2000. The principal threat in the short term is an unraveling of the producer's cutback agreement, which is considered unlikely given all of the pain endured worldwide during the previous 18-months' downturn. Interna-tional Maritime Associates sees the cut-backs staying in place ? if not relaxed a bit ? but not abandoned before March of 2000. Other potential threats include an unraveling of the world economy from some economic shock, such as a major devaluation of the Chinese Yuan; military confrontation between China and Taiwan; or a total collapse in Russia that draws in its neighbors. Longer term, there remains a threat that production capacity in low cost fields could be significantly increased, particularly if upstream activity in the Middle East is opened to the oil majors. Increased land-based production ? par-ticularly given its much lower produc-tion costs ? continue to be a threat to the future of offshore production, but evolving technologies which continue to lower the cost of offshore production 56D Maritime Reporter/Engineering News