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Big Oil's Choice.(ISSUES & INSIGHTS)(EDITORIALS)(Editorial)
Energy: Cynics will no doubt see something sinister in ChevronTexaco's decision to buy Unocal for $18 billion. They should relax. The move is just a reflection of the cockeyed economics of today's oil industry.
With oil breaching the record $58-a-barrel level and seemingly headed higher, it's not unreasonable to wonder when the market will work its magic? When will new supply kick in to meet all this demand?
The answer, at least in the short run, may not be pretty. Just look at No. 2 oil giant ChevronTexaco's swallowing of No. 9 Unocal.
Not that there's anything particularly special about Unocal. It's just that with taxes, regulations and environmental restrictions being what they are, it's a lot easier, cheaper and less risky to buy reserves on Wall Street than to drill holes somewhere else.
Look at the chart below. In the past, when oil prices have risen, the number of domestic rigs in operation jumped sharply. This time, the rig count's up, but not by much. What gives?
Global oil demand is up. Last year it rose 3.4% -- the most since 1978, the Energy Information Administration said.
This year, demand will grow another 2.5%, thanks to booming India and China. By comparison, from 1993 to 2003 demand rose just 1.6% a year.
- Unocal's 76 Products Company Announces Alliance With Cardlock Fuels System, A...
- Press release article from: PR Newswire August 14, 1996 700+ words
...14 /PRNewswire/ -- Unocal 76 today announced it...the Southern Counties Oil Companies. Terms of the agreement...sites, supplied by Unocal, will complement the...the Southern Counties Oil Companies. "As the first company...Products Company." The Unocal 76 and Cardlock Fuels...
- Indonesia--LNG projects, the one bright hope as oil production declines, are...
- Newspaper article from: Petroleum Intelligence Weekly March 24, 2003 700+ words
...LNG projects, the one bright hope as oil production declines, are under threat as foreign oil companies including BP, Total Fina Elf, and Unocal have slapped a virtual freeze on upstream investment. Tensions with state Pertamina and regulatory...
- Unocal riles rivals over gasoline formula.
- Magazine article from: Los Angeles Business Journal Mullen, Liz February 6, 1995 700+ words
...A.-based Unocal to levy a royalty on other oil companies which wish to...officials at other oil companies questioned whether Unocal's patent is...advantage to Unocal and a tremendous...disadvantage to other oil companies," Chu said...
- Unocal Corp. Lab Clean-Fuel Hunt Spawns Battle over Formulas.
- Newspaper article from: Knight Ridder/Tribune Business News April 7, 2003 700+ words
...disputes pitting Unocal against rival oil companies, the state of California...only challenge to Unocal. Following a complaint by other oil companies, the U.S. Patent...lawyer for the other oil companies. Unocal is "confident those...
- Unocal patent shocks competitors, throws RFG 'phase 2' up for grabs....
- Magazine article from: National Petroleum News March 1, 1995 700+ words
...existed between oil companies and CARB." Roger C. Beach, Unocal's CEO, says...reached by 14 major oil companies, including Unocal and Arco, and...agreement signed by Unocal, Arco and 12 other oil companies and the Big Three...
- Unocal vows not to disrupt cleaner gas debut; war over patent for formula may...
- Magazine article from: Los Angeles Business Journal Mullen, Liz April 10, 1995 700+ words
...said Barry Lane, Unocal spokesman. All the major oil companies have been working...the gasoline. Unocal intends to charge other oil companies a fee if they wish...said. Lane said Unocal has not sued any oil companies over the patent...
- Jury awards Unocal $68 million by six majors for patent violations.
- Magazine article from: National Petroleum News Emond, Mark December 1, 1997 700+ words
...The defendant oil companies, who were originally...the validity of Unocal's patent, argue...The six major oil companies contend the patent...decide whether Unocal is entitled to...defendants. The six oil companies won't say whether...
- Unocal Charged With Fraud Over Gasoline Patent.
- Newspaper article from: The Oil Daily March 6, 2003 700+ words
...Competition said because of Unocal's behavior, other oil companies producing RFG have to pay Unocal a substantial amount as royalties...patent. The money awarded to Unocal has since been paid, but the oil companies have complained that the royalties...
