Clarion-Ledger from Jackson, Mississippi on December 29, 1985 · Page 69
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Clarion-Ledger from Jackson, Mississippi · Page 69

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Jackson, Mississippi
Issue Date:
Sunday, December 29, 1985
Page:
Page 69
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Sunday, December OT, 1S85 The CUrion-ledgerlitlison Daily Newt 3G Shell hopes to revive wells with carbon dioxide Bv MIKE McCALL CUrion-Ledger Bus tana Editor A Shell Oil Co. subsidiary says it has begun pumping carbon dioxide into a Pike County oil field, the first of three declining fields it hopes to revive in southwest Mississippi. A spokesman for Shell Western E&P Inc. said the company has successfully launched the oil reclamation project in the Little Creek field near McComb. The carbon dioxide is being transported by a new pipeline running from carbon dioxide wells near Jackson in Rankin County to Pike County. Additional carbon dioxide projects are scheduled for the West Mallalieu Field in Lincoln County and Olive Field in Pike and Amite counties. Oil reserves in the three fields have either been depleted or near depleted through conventional production means. Injection of carbon dioxide into Takeover tries taking toll on town By JOHN SARE The Dallas Morning News BARTLESVILLE, Okla. - On Christmas Eve a year ago, the 38,000 people in Bartlesville thought their prayers had been answered. Oilman T. Boone Pickens was not going to take over Phillips Petroleum Co., one of the nation's largest oil companies and the town's principal employer. Merchants and the more than 7,700 Phillips employees in Bartlesville rejoiced. The oil company that had called Bartlesville home since 1917 was going to stay home. Residents said it was the best Christmas present they could have hoped for. But the decision by Pickens and his other investors not to buy the company was a Christmas present with a price. And a year later, the price of preventing the takeover has not been paid. "Our first thought a year ago was, 'Thank God, it's over,' " said Tucker Harrison, a 21-year Phillips veteran. "But at the same time, you could see there was going to be a big bill. You just didn't know how the bill would be paid." Residents remind themselves ruefully that other one-industry towns do not share Bartlesville's former feeling that it was virtually immune to economic downturns. "Growing up in Bartlesville, you used to learn two things," said a third-generation Phillips employee. "That the Indians said Circle Mountain would prevent a tornado from hitting Bartlesville, and that Phillips would prevent any other calamity. Well, the tornado hit in 1982. Pickens hit in 1984. Nothing is certain anymore." As part of the price of not being taken over, Phillips was forced to buy back $383 million in stock from Pickens and his partners. Two months later, the weakened company was embroiled in another takeover battle, this time with New York financier Carl Icahn. The company again prevented a takeover, but by last March the company had acquired a debt of $8.6 billion. This debt has been trimmed to $7 billion through asset sales and an early retirement program that has helped reduce the Phillips work force in Bartlesville to 7,000. There still are fears about the future of Phillips and about the entire oil industry. Because this town 40 miles north of Tulsa has been unable to put an economic development program in place, it has not been able to recover from economic ills related to Phillips' problems, many residents say. Also troubling to residents is the possible decline of oil prices to $20 a barrel or less, after the decision earlier this month by the Organization of Petroleum Exporting Countries (OPEC) to let member nations set their own oil prices. Pickens started his takeover effort Dec. 4, 1984, almost exactly four months after a 300,000 square-foot shopping mall the town's first brought several new chain stores and the conveniences of mall shopping to Bartlesville. Local advertising salesmen said the new chain stores have been more aggressive and thorough in their marketing techniques than some of the older, locally owned businesses. But they said the success of the new stores and the financial difficulties of some of the older stores might have been inevitable. The Pickens takeover attempt and subsequent uncertainty may have served simply as a catalyst. A glut of housing in the Bartlesville area also has been a problem. It was caused, in part, by some of the 1,000 residents who took advantage of Phillips' early retirement plan and by a company hiring slow-down begun in 1981. Bartlesville real estate brokers said sales early in 1985 were half what they were for the same period in 1984. But they add that sales started to pick up by the end of the summer and are about even with the 1984 level. Phillips executives and other business people say the town may have depended on Phillips too long. And some residents said that years of pampering by Phillips may have left the town too flabby to remake its own future at least for several more years. "Those towns that are not company towns have to have strong leadership," Miller said. "People there have been forced to change and accomplish things. People in Bartlesville haven't bfeen forced to do that until now." the old fields helps push the oil and carbon dioxide toward producing wells. Once the mixture reaches the surface, the carbon dioxide is separated and recycled into the field to produce still more oil, according to Max Mar-dick, eastern division production manager for Shell Western. Carbon dioxide has consumer uses as well, including making dry ice and car-bonation for soft drinks. In all, Shell hopes to extract another 43 million barrels of oil from the three fields, which have produced a total of 77.5 million barrels thus far. Shell is spending some $260 million on its carbon dioxide injection program, but the expenditure will be worth it if fully successful. At a selling price of $25 per barrel, Shell Oil, a subsidiary of Royal Dutch Shell, would receive more than $1 billion in revenues from oil it would otherwise not be able to produce. "Development of enhanced oil recovery techniques using (carbon dioxide) provides a major boost for our efforts to get more oil out of those old oil fields," said Mardick. "It allows us to produce oil that cannot be recovered economically with any other known technology." Shell has been a pioneer in carbon dioxide injection programs. It conducted the industry's initial carbon dioxide testing in the Little Creek Field from 1974 through 1978, a test which showed the field's output could be extended by 24 million barrels, or more than 40 percent. Initial carbon dioxide-enhanced oil production from the field is expected in the spring of 1986. Shell believes it can extend the life of the West Mallalieu field by 16.5 million barrels, up from 26 million barrels, and the Olive Field from 4.5 million barrels to another 2.5 million barrels. Shell built a 91-mile, 20-inch pipeline from Rankin County to Pike County to transport carbon dioxide to the oil fields. The buried pipe line was initially filled with carbon dioxide in October for testing. While Shell's use of carbon dioxide in southwest Mississippi is moving along satisfactorily, the company doesn't know if it will attempt to use the process in its offshore oil production wells in the Gulf of Mexico. "It would be premature to start thinking about that," a Shell spokesman said. Use of carbon dioxide flooding is growing in the industry. Amoco Corp. announced recently that it plans a major carbon dioxide injection program in Wyoming where it hopes to produce about 40 million barrels of oil from wells which have declining production. Mobil Corp.'s pipeline near The Associated Press BAYOU LA BATRE, Ala. - Mobil Corp.'s 15-mile pipeline beneath Mobile Bay should be completed early next year, linking the company's offshore wells to a natural gas processing plant in south Mobile County. "The dredging is 50 percent complete and fabrication of the pipeline will begin later this month," Mike Kimmitt, a Mobil spokesman in New Orleans, said in an interview. The pipeline network connecting five wells will cost about $38 million. The $70-million processing plant will "sweeten" the sour gas from the wells, removing impurities Mobile Bay completion such as hydrogen sulfide and carbon dioxide. The gas has been purchased by American Natural Resources, which is building a large pipeline to the Mobil plant to connect with an interstate gas line network. Kimmitt said the Mobile Bay gas pipeline will be unique for the Gulf of Mexico. Several single pipes lead from offshore gas production platforms in the Gulf to other coastal states, but the new Mobil pipeline will be a cluster of several pipes. The pipeline at the bottom of the bay will cross under the 40-foot-deep shipping channel to the Mobile port. 3 out of 4 working Americans already have an IRA under their hat or plan to open one soon? What do they know that you don't know? first, they know that an Individual Retirement Account is the ideal way to shelter income from taxes and save for retirement. They know that the size of their tax break and retirement fund depends on the amount of their yearly contributions, for example: A single wage earner with an adjusted gross income of $20,000 will save $130 in taxes with a $500 contribution to an IRA. A working couple, filing a joint return on an adjusted gross income of $36,000 will save $311 in taxes with a $1,000 contribution to an IRA. By making the maximum contribution allowed, a working couple, with an adjusted gross income of $45,000 and filing a joint return, can reduce their federal income taxes by $1,320. ($4,000 for a working couple). Three out of four working Americans also know that an IRA's tax-deferred interest will compound their annual contributions into a comfortable nest egg for retirement. Depending upon the age at which they open their IRA, their annual contributions and interest rates, their income for retirement could be sizable, for example, here's what a person who opens an IRA at age 30 can expect to have as a retirement fund at age 65: Contribution Each Year $ 500 1,000 1,500 2,000 At 6 Total Retirement Fund at Age 65 At 8 At 10 $ 63,134 $101,035 $164,519 126,268 202,070 329,039 189,402 303,105 493,558 252,536 404,140 658,078 Based on deposits being made on the first day of the year. You don't need $2,000 to open a Trustmark IRA . . .just $100.00. Trustmark offers a variety of ways you can take advantage of these IRA benefits. Whether you have $100 to deposit or a $100,000 rollover, we have an IRA account that will suit your needs and goals. Choose from these options: IRA Open Account If you've thought you couldn't afford an IRA, the IRA Open Account is just for you. All it takes to get started is a $100 deposit. If you wish, you can arrange to have deposits of any amount transferred regularly and automatically from your Trustmark checking or savings to your IRA Open Account. Or, ask your employer about the payroll deduction plan we offer. It's the easiest way to begin your IRA. IRA Certificate of Deposit If you have as much as $1,000 to deposit, you can benefit from the higher, fixed interest paid on CDs. And unlike some CDs, your IRA CD's interest is tax-deferred. So, grab your hat and come to Trustmark. Don't be left out of the benefits 3 out of 4 working Americans are destined to enjoy. Open a Trustmark IRA right away and you can get a tax break on this year's return. Plus, you'll be taking an important first step toward a financially secure retirement. It's a step Trustmark is ready to help you take, for details or answers to your questions, call 354-5825 in Jackson or toll-free 1-800-222-7102 outside of Jackson. You can hardly afford to be left out 3 ' v, - TM National Bank We earn your trust every day." Federal law and regulations require substantial interest penalty. 10 Internal Revenue Service penalty, and loss of tax-deferred status for early withdrawal. Withdrawals may begin at age 59'A and must begin by age 7Qyh. At that time, federal income tax must be paid, but only on the amount withdrawn. 'According to a 1984 survey prepared by heritag; Foundation Sindlinger and Co. - J Member FDIC

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