Sign in Subscribe
Petroleum

$500 Million Oil and Gas Loan Bill Expected to be Signed by President Clinton

Strategic Insights

— 2 min read

President Clinton is poised to sign a $500 million loan bill that will provide much-needed financial resources to the struggling U.S. oil patch, which was severely impacted by low oil prices last year. The bill, H.R.1664, was sent to Clinton's desk last week and would establish a loan program for oil and gas producers and service companies. The loan program will be managed by a board composed of senior government officials, including the secretaries of commerce, labor, and treasury, and the head of the Securities and Exchange Commission. The program is expected to benefit at least 400 oil and gas companies.

Key Takeaways:

  • The $500 million loan bill, H.R.1664, has been sent to President Clinton's desk and is expected to be signed by next Tuesday.
  • The loan program will provide financial resources to oil and gas producers and service companies that were devastated by low oil prices last year.
  • Only 85% of the loans will be guaranteed, leaving borrowers responsible for 15% if they default.
  • The loan program will be managed by a board that includes the secretaries of commerce, labor, and treasury, and the head of the Securities and Exchange Commission.
  • At least 400 oil and gas companies are expected to benefit from the program.
  • The program will have a sunset provision that ends it in five years, but loans can extend until 2011 with a maximum amount of $10 million.
  • The House passed H.R.1664 by a vote of 246-176 on August 4, and the Senate approved it in late June.
  • The loan program will appropriate $122.5 million to cover expected defaults and $2.5 million to administer the program.

Statistics:

  • $500 million: The total amount of loans to be established for oil and gas producers and service companies.
  • 85%: The percentage of loans that will be guaranteed by the government.
  • 15%: The percentage of loans that will be left to borrowers in case of default.
  • $122.5 million: The amount appropriated to cover expected defaults.
  • $2.5 million: The amount appropriated to administer the loan program.
  • 400: The minimum number of oil and gas companies expected to benefit from the program.
  • 5 years: The duration of the sunset provision.
  • 2011: The year by which loans must be repaid.

Sources:

  • "White House spokeswoman" (undated)
  • H.R.1664: The bill to establish the oil and gas loan program.
  • Today's Oil and Drive (TOD), August 6, 1999, p.5 (Note: The date of the article is explicitly provided in the original text.)

Read more