A study carried out by Smith Rea Energy Associates Ltd., Canterbury, UK, and AEA Technology PLC, Didcot, UK, on behalf of the European Union was said by SREA to shows the benefits of technology in extending oil and gas reserves.
Announcing the study in Brussels the partners said that among the key findings about the impact of technological innovation on reserves growth were that the application of innovative technologies was responsible for reserves gains on the Northwest European continental shelf of about 12.4 billion barrels of oil equivalent (boe) over the period 1990-97.
SREA attributed 75% of the gains to innovations in three key areas - drilling, seismic survey techniques, and floating/subsea production, in order of importance - and said that the gains resulted mainly from the "enabling" of new fields.
The analyst said that the gains were accompanied by marked improvements in health, safety and environmental (HSE) protection; also EU technology support programs proved to be of particular value to small to medium sized enterprises by helping them to innovate and export in the face of fierce international competition.
"The potential for future reserves gains," said SREA, "could be as much as an additional 19 billion boe, accompanied by further improvements in HSE protection.
"EU technology support programs have made a significant contribution to both reserves gains - estimated at more than 1.3 billion boe in the period - and HSE improvements, and should continue to do so."
New projects and contracts
BP Amoco PLC was awarded a second deep water exploration license offshore Brazil; the tract is about 300 km offshore and has water up to 2,000 m deep.
The BFZ-2 license covers 25,000 sq km of the Foz do Amazonas basin off Northern Brazil. The operator intends to begin exploration activity when contracts are approved by the Brazilian National Petroleum Agency, anticipated within 2 months.
The license was awarded under a joint venture agreement, with interest holders being: operator BP Amoco 35%; Brazilian state petroleum company Petroleo Brasiliero SA (Petrobras) 30%; Exxon Mobil Corp. 20%; and Elf Aquitaine SA 15%.
BP Amoco also let a 5-year contract worth more than 500 million kroner ($62.5 million) to Aker Maritime AS, Oslo. for maintenance and modification work on all BP Amoco's platforms offshore Norway.
The contract will cover work on the Ula, Gyda, Valhall, and Hod platforms, and will be aimed at extending the working lives of the platforms by improving operating economics.
Turkey's Petkim Petrokimya AS let a basic engineering contract to Stone & Webster Ltd., Milton Keynes, UK, for expansion of an ethylene plant at Aliaga, Turkey.
Stone & Webster said the expansion of plant capacity by 120,000 tonnes/year will include the addition of a new cracking furnace based on proprietary technology and the installation of the contractor's low pressure wet oxidation process for treatment of the plant's caustic effluent.
Project focus: London's IPE gears up for electricity trading
London's International Petroleum Exchange announced in early December that important steps had been taken in drawing up futures and physical contract specifications for the markets that will exist under the new electricity trading arrangements (NETA) due to begin in October 2000.
The IPE plans to launch futures contracts for electricity in the second quarter of next year. The new markets were discussed at an industry working group organized by the IPE. The exchange said the meeting was well attended by a cross section of the industry, with approximately 30 individuals from 20 companies taking part.
"There was much support," said the IPE, "for the concept of contracts on the day and up to a year ahead, with the possibility of longer dated contracts at a later stage.
"The strong view was that these markets should be launched as soon as possible, to give the industry the opportunity to manage the transition to NETA and gain experience of the systems and products that will be available."
Among issues raised by the working group, and which would require further consultation and research, the IPE cited the potential for introducing cash settled contracts before NETA is launched. The IPE agreed to take these issues forward and call another industry meeting early in the new year.
Nick Aldridge, head of product development and research at the IPE said, "It was good to see such a well attended meeting with so much support for electricity contracts. We feel that the industry itself is in the best position to define its own needs and our approach at the IPE is to facilitate this process rather than to impose a contract specification on market participants. It is clear that there is more work to do, but we made real progress in defining the opportunities, problems and issues at stake".
The IPE, which handles the bulk of the world's Brent crude oil futures trading and is Europe's key petroleum trading center, announced its attention to launch electricity contracts for the new trading arrangements in May 1997 and has worked closely with the industry subsequently to identify and meet its requirements.
The UK Natural Gas futures contract was launched by the IPE in January 1997. Many companies involved in the electricity sector are already using this as a risk management tool. Once the IPE launches electricity contracts, companies may be able to offset their exposure across the two different markets and reduce their transaction costs accordingly.
In September this year the IPE and management consultant PricewaterhouseCoopers held a 2-day simulation of the markets that could exist under NETA. This event was attended by 10 leading power companies, which were able to test how the over-the-counter and exchange traded markets could operate under the new trading arrangements.
The IPE is a participant in the Libra consortium which is one of the three short-listed companies bidding to provide services for NETA. Libra also includes PricewaterhouseCoopers, ABB Energy Information Systems and Energy Settlements and Information Systems.