Banker: Large petroleum companies hesitant with new ventures

<a href=www.theledger.com>The Associated Press LAFAYETTE, La.

Despite being flush with cash from high oil and natural gas prices, large petroleum companies are still hesitant to spend on new ventures because of economic uncertainty, an investment banker says.

The unknown future of oil from Iraq, Nigeria and Venezuela is compounding the uncertainty, Matthew LeCorgne, president of LeCorgne Loewenbaum and Co. of New Orleans, told the Lafayette Chamber of Commerce on Tuesday.

"This market does not like unpredictable situations," he said. LeCorgne said service companies are suffering because oil company profits are being banked instead of being spent on new drilling projects.

Lewis Gale, chosen as dean of the University of Louisiana at Lafayette's College of Business Administration, said new opportunities exist for partnerships between U.S. and foreign companies.

Gale said the influence of OPEC may be diminished as the flow of Iraqi oil increases. The market is more sensitive to disruptions in supply, and consumption has increased while capacity has declined, Gale said.

Many oil companies reported quarterly profits that exceeded profits from the previous year, but they aren't willing to invest in new drilling ventures until they know petroleum prices have stabilized at a profitable level, LeCorgne said.

The nation's rig count is at 986 this week, a 30 percent increase from the same time last year, according to LeCorgne. Still, a third of available offshore rigs are not being used, he said. Information from: The Advocate

Last modified: April 30. 2003 9:08AM