COMPANIES FIND NEEW WAYS TO GET OIL, BUT US PRODUCTION DECLINE GRINDS ON

COMPANIES FIND NEEW WAYS TO GET OIL, BUT US PRODUCTION DECLINE GRINDS ON

New technologies are opening previously unreachable areas of the United States to oil exploration, but 20 years after the Arab oil embargo, analysts say the steep decline in U.S. production might be slowed, but it can't be reversed.

In the past few weeks, oil companies have announced breakthroughs in ways to find oil and pump it from record depths of water.Shell and British Petroleum said they would build a platform to produce oil in nearly 3,000 feet of water in the Gulf of Mexico off Louisiana. Phillips Petroleum Corp. and its partners used supercomputers to find oil hidden under thick layers of salt that cover much of the shallow waters of the gulf.

By themselves, the new oil fields aren't expected to have much effect on total U.S. production. But by applying new technologies, oil that was too expensive to pull out of the ground may now be worth the effort.

"Technology is helping us prevent it from getting worse . . . .slowing the rate of import dependence," said Michael Barbis, oil and gas analyst for NatWest Securities Corp. But Mr. Barbis and other analysts agree the decline of U.S. oil production is beyond reversal.

Arco estimates its recently discovered Sunfish oil field near Anchorage has about 750 million barrels of recoverable oil. And the huge Prudhoe Bay oil field could yield another 2 billion barrels of oil because of new procedures for injecting gas into the wells to force more oil out.

And while new discoveries sometimes appear to hold promise, what was a gusher can quickly turn into a dry well. Arco this spring announced a find 16 miles offshore of Alaska's North Slope that could have rivaled some of the biggest fields in the state. But last week the company said the remote Kuvlum field couldn't make money.

Despite memories of long gas lines and rationing during the Arab oil embargo, the United States has increased its dependence on foreign oil to nearly 50 percent in recent months from 36 percent in 1973.

Twenty years ago Sunday, the Arab oil-producing countries said they would begin cutting back exports to the West and Japan in retaliation for support of Israel. The producers quickly cut off all shipments in an embargo that lasted until March 1974.

Since then, the United States has come to rely on more imported crude largely because oil fields across the country aren't as productive as they used to be. Analysts say daily oil production, which has been dropping by 400,000 barrels each year, will continue to fall.

"I don't think for a minute the U.S. is suddenly going to stabilize production," Bernard Picchi, an oil analyst at Kidder, Peabody, said in reference to the new finds. But recent discoveries have nearly cut in half a production drop that would be 10 percent to 12 percent a year without new oil.

Phillips' discovery of oil under the salt in the gulf sent the company's stock about 10 percent higher two weeks ago. Many in the oil industry consider the possible oil hidden under several thousand-foot thick slabs of salt in the Gulf of Mexico one of the best opportunities in the world.

The salt, which covers nearly two-thirds of the shallow waters in the gulf, had distorted seismic exploration tests so much to render them useless. But Phillips Petroleum, Andarko Petroleum and Amoco used supercomputers to screen out the distortions and reveal the geological structures below.

Shell and BP plan to begin producing oil in late 1996 from a special platform it will set up in water deeper than the two World Trade Center towers - stacked on top of each other - are high. The well is expected to hold more than 700 million barrels of oil and gas equivalent - the largest oil and gas discovery in the gulf in 20 years.