- The Washington Times - Tuesday, March 4, 2003

HOUSTON, March 4 (UPI) — The nation's oil and gas industry could increase the domestic supply of natural gas if allowed to drill on federal lands, John Seitz, president and chief executive officer of Anadarko Petroleum Corp., said Tuesday.

"Plentiful supplies of natural gas produced here in the U.S. are critical to America's energy security," Seitz said. "But that security is being challenged as demand growth continues to outpace supply."

In a speech to the Texas Independent Producers and Royalty Owners Association, Seitz said to close the widening gap between supply and demand "they must have better access to areas within the U.S. where the greatest gas resources are located."

He added that the industry is "short of low-risk drilling locations" because "potentially vast resources of natural gas found on federal lands are off limits to exploration."

Seitz argued that not only does the industry need "better access but more pragmatic regulation of areas that are supposedly open for exploration but are too expensive to develop because of tight leasing restrictions and permit delays."

Many projects in the West "just aren't economic if the encounter to many delays," he said.

Based in Houston, Anadarko expects to operate an average of about 50 drilling rigs in North America this year, compared to about 40 in 2002.

In fact, Seitz said, this week Anadarko has more drilling rigs operating in the United States than any other company. The company also has operations in Canada, Algeria and Qatar.

"The program should enable Anadarko to increase production to about 200 million barrels of oil equivalent and show a 7 percent growth in annual natural gas volume over 2002," he said.

Seitz added that the growth would come primarily from fields in the Gulf of Mexico, Western Canada, East and Central Texas, North Louisiana and Wyoming.

Anadarko shares gained 47 cents, or 1.03 percent, to close Tuesday at $46.05 on moderate volume of 1.4 million shares traded on the New York Stock Exchange.

"Part of America's long-term solution could be improved efficiency, and perhaps a wider choice of cleans fuels," he said. "But for now, the best answer is to encourage greater natural gas exploration and development here at home."

To do that, Seitz urged the industry to pursue new frontier gas resources in challenging places like the Alaskan and Canadian Artic. Also there needs to be exploring in offshore areas in federal water that are currently under moratoria, he said.

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(Reported by UPI Business Correspondent Chris H. Sieroty)

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