U.S. Companies in Joint Oil Ventures Await Anxiously

Talks on proposed Soviet-Western oil ventures were thrown into turmoil by Monday’s upheaval in Moscow, while world oil prices jumped on fears that the change in Soviet leadership threatened the flow of crude from the nation that produces more oil than anyone else.

San Francisco-based Chevron Corp., which has the largest proposed deal on the table, and other oil companies were reserving opinion on what the ouster of President Mikhail S. Gorbachev will mean for their ventures.

But analysts feared that the events would accelerate the current decline of oil production and exports from the Soviet Union, a major supplier of crude oil and heating oil to Europe. With the world’s excess oil production capacity already razor thin--because Kuwait and Iraq remain out of the picture--anxiety helped drive up oil prices in New York and London.

The price of oil “reacted like a cat on a hot tin roof,” said Peter Beutel, an analyst with the Pegasus Econometric Group in Hoboken, N.J. “It just kept jumping and jumping and jumping.”

In London, prices for North Sea Brent Blend crude shot up $2.72 per barrel on the first news of Gorbachev’s ouster, before settling up $1.05 a barrel at $20.53. Later in New York, light, sweet crude oil for September delivery jumped $1.70 to $23.10 a barrel in early trading before settling at $22.47 per barrel, up $1.17.

Oil executives, meanwhile, were holding their breaths as Monday’s events developed.

In addition to Chevron--which has a tentative deal to develop an oil field in the Tengiz region in the central Asian republic of Kazakhstan--companies with proposed joint ventures include Amoco Corp., Texaco Inc., Marathon Oil Co., Conoco Inc. and French-owned Elf Aquitaine and Total.

The Soviets have been looking to Western firms for assistance during a time of crisis in their oil industry, which has been in decline for years because of antiquated technology, labor strife and poor production practices.

The Soviet news agency Tass on Monday reported that the new government was being called on to draw up emergency plans to rescue the nation’s energy industry.

The coup was especially worrisome for Chevron, which has its eye on a field estimated at more than 20 billion barrels. Chevron had been awaiting the signing of the proposed Union Treaty, scheduled for today but delayed by the coup. The treaty--a revision of the Soviet Union’s federal system designed to check the country’s disintegration--would have transferred from the central government to the individual republics more authority to develop oil and mineral resources.

“We had recently been engaged in ongoing discussions but were waiting for the all-union treaty to be signed before arranging our next meeting,” said Bonnie Chaikind, a Chevron spokeswoman. She declined to say what course of action the company will take.

But Chevron’s deal was on shaky ground even before the change in Soviet leadership.

Chevron became a symbol in the Soviet media of Western capitalist greed. In particular, the weekly Moscow News accused Chevron of trying to take advantage of the Soviets, bribing officials and trying to “plunder” the nation’s oil reserves.

For its part, Chevron vehemently denied the bribery charge and said the Moscow News story was “irresponsible and contains inaccurate, confused and distorted interpretations of our tentative joint-venture agreement.

Chicago-based Amoco Corp., meanwhile, announced in June that it had won a bidding process to develop the offshore Azeri oil field in the Caspian Sea. On Monday, a spokesman said the company was waiting to see how the leadership change will affect its talks.

The only U.S. company actually drilling for oil in the Soviet Union, Houston-based Anglo-Suisse L.P., seemed unconcerned. “We’ve spoken to our Soviet partners on the telephone. They say it’s business as usual--and please not to consider this as an excuse not to proceed,” said Senior Vice President Marc Rowland.

Anglo-Suisse, in partnership with the Phibro Energy Inc. unit of Salomon Bros., is already producing about 20,000 barrels a day from an estimated 1-billion-barrel field in Western Siberia under a joint venture named White Nights.

Ironically, Occidental Petroleum Corp.--whose late chairman Armand Hammer had close ties with every Soviet leader since Vladimir Lenin--backed out of its last joint venture in January, after Hammer’s death, citing political uncertainty in the country.

But only the expertise, investment dollars and technology of Western oil companies can help salvage the Soviet oil industry, economists at the Washington consulting firm PlanEcon Inc. said.