U. S. BRIEFS

June 17, 1991
U.S. SUPREME COURT declined to block a lawsuit in which four western states claim seven major oil companies conspired to fix prices and create a gasoline shortage during the 1973-74 Arab oil embargo. In 1986, a federal judge dismissed the suit by Arizona, California, Oregon, and Washington, saying the states failed to prove a conspiracy. But an appeals court reinstated the suit and ordered a trial. Defendants are ARCO, Chevron Corp., Exxon Corp., Mobil Corp., Shell Oil Co., Texaco Inc., and

COURTS

U.S. SUPREME COURT declined to block a lawsuit in which four western states claim seven major oil companies conspired to fix prices and create a gasoline shortage during the 1973-74 Arab oil embargo. In 1986, a federal judge dismissed the suit by Arizona, California, Oregon, and Washington, saying the states failed to prove a conspiracy. But an appeals court reinstated the suit and ordered a trial. Defendants are ARCO, Chevron Corp., Exxon Corp., Mobil Corp., Shell Oil Co., Texaco Inc., and Unocal Corp.

POINT ARGUELLO PARTNERS last week filed suit in a Santa Barbara, Calif., superior court against California Coastal Commission over the agency's refusal to hear the partners' appeal of Santa Barbara County's denial of an interim tankering permit for the project (OGJ, May 27, p. 42).

RESEARCH

GAS RESEARCH INSTITUTE proposed a $212.9 million research and development budget for 1992. Planned are 218 projects in gas end use, operations, and supply. GRI asked the Federal Energy Regulatory Commission to allow its member interstate pipeline companies to collect 1.51/Mcf of gas they sell or transport to support the R&D program.

REFINING

PHILLIPS 66 CO. may sell its 25,000 b/d Woods Cross, Utah, refinery and related product terminals and marketing assets. The refinery accounts for 8% of the company's U.S. refining capacity, serving markets in Utah, Idaho, Wyoming, Nevada, and Oregon. Related assets include the Woods Cross truck loading rack, two 50% owned product terminals in Boise and Burley, Idaho, and 12 retail outlets in the Salt Lake City area. Phillips will consider offers through October.

MARATHON OIL CO. agreed to pay a $900,000 fine and $3 million for improved wastewater treatment at its 50,000 b/d Indianapolis refinery and plead guilty to one felony and two misdemeanor counts in settlement of U.S. government allegations it violated the Clean Water Act by discharging explosive petroleum wastes into city sewers. The settlement ended a 2 year federal investigation that began after a 1989 explosion and house fire 2 miles from the plant injured two people. Marathon denies the discharge caused the explosion.

COMMODITIES

NEW YORK MERCANTILE EXCHANGE board approved a sour crude oil futures contract to be submitted to Commodity Futures Trading Commission. Contract specifications include a unit of 1,000 bbl, sulfur content of 0.5-2.2 wt %, and at least 26 gravity. Deliverable crudes are West Texas-New Mexico sour, Alaskan North Slope sour, Oriente, Oman, Dubai, Flotta, and Iranian light.

PETROCHEMICALS

EPSILON PRODUCTS CO. let contract to Airco Gases, Murray Hill, N.J., to supply nitrogen and hydrogen for its 260 million lb/year polypropylene plant at Marcus Hook, Pa. The plant will receive nitrogen via pipeline from Airco's air separation plant at Claymont, Del. Liquid hydrogen will be supplied from Airco's Magog, Canada, plant.

PIPELINES

FEDERAL ENERGY REGULATORY COMMISSION approved the $479 million, 250 MMcfd pipeline systems expansion project proposed by Texas Gas Transmission Corp., CNG Transmission Corp., and Transcontinental Gas Pipe Line Co. to deliver additional gas mainly to the U.S. Northeast (OGJ, Dec. 31, 1990, p. 24). Construction is to begin July 1 .

NORTHWEST PIPELINE CORP. let contract to Powers Engineers Inc., Hailey, Idaho, for work related to its $446 million, seven state pipeline expansion project (OGJ, Jan. 7, p. 92). Powers will provide engineering design and construction management for a microwave voice/data communication system to monitor flow measurements and will identify permits and acquire rights-of-way for the pipeline. Expansion is to be complete by early 1993.

FERC approved the $188.3 million, 1.2 bcfd Mobile Bay gas pipeline, an expanded project proposed by Transcontinental Gas Pipe Line Corp., ANR Pipeline Co., Florida Gas Transmission Co., Southern Natural Gas Co., Texas Eastern Transmission Corp., and Tennessee Gas Pipeline Co. (OGJ, Sept. 3, 1990, p. 21).

WILLIAMS FIELD SERVICES CO. completed construction of an extension to its Manzanares gas pipeline system from the Milagro gas processing plant at Blanco, N.M., 39 miles east to the El Cedro station at Gobernador, N.M., and north 11 miles to La Jara, N.M. The system began moving San Juan basin coal seam gas from Navajo reservoir June 1. Coal seam volumes to the Blanco hub are expected to double by mid-June.

IROQUOIS GAS TRANSMISSION SYSTEM let a $73 million contract to Pentzien Inc., Omaha, for construction of a 30 in., 3,600 ft section of gas pipeline crossing the St. Lawrence River. It is one of three major river crossings along the 370 mile pipeline from the Canadian border through New York state and Connecticut (OGJ, Mar. 11, p. 32).

TRANSCOLORADO GAS TRANSMISSION CO., Denver, received requests for 380 MMcfd of firm capacity and 3.7 bcfd of interruptible capacity on its proposed 310 mile, 300 MMcfd gas pipeline from the Piceance basin to Blanco, N.M., during an open season ended May 24 (OGJ, Apr. 8, p. 36).

DIAMOND SHAMROCK REFINING & MARKETING CO. completed main cleanup operations near Knox City, Tex., after a pipeline leak spilled crude oil into the Brazos River early this month. Severe flooding apparently caused the pipeline to fail where it crosses under the river. No oil has been seen at containment areas, and booms will be removed. Cleanup of isolated oil patches will continue. The exact spill volume won't be known until the pipeline is repaired.

DRILLING-PRODUCTION

LOUISIANA LAND & EXPLORATION CO. plans to develop its 1 State Lease 13719 oil discovery off Plaquemines Parish, La. The discovery well, on Main Pass Block 45, flowed 141 b/d of oil through a 1%4 in. choke with as much as 140 psi flowing tubing pressure from pay at 9,31 5-24 ft and 9,334-56 ft. Three shallower gas zones are present. Operator LL&E owns a 30% working interest in the well, with other interests held 20% each by Nomeco Oil & Gas Co., Crystal Oil Co., and Equitable Resources Energy Co. and an undisclosed company 10%.

NICOR EXPLORATION & PRODUCTION CO., Denver, will begin production this month from discovery and confirmation wells in Galveston Bay off Texas (OGJ, May 13, p. 36). The two wells flowed a combined 12 MMcfd of gas and 230 b/d of condensate from Tertiary Frio above 11,000 ft.

UNOCAL CORP. is developing a field found by its Triple D discovery well, which flowed 376 b/d of oil and 263 Mcfd of gas from Ordovician Ellenburger 1 mile east of Dollarhide field in Andrews County, Tex. Drillstem tests indicate two more zones uphole may be productive. Total depth is 12,851 ft. Unocal holds 100% interest in the well and 1,040 acres on the prospect.

OXY USA INC. added reserves of 33 bcf of gas and 500,000 bbl of oil in the Kansas Hugoton area in first quarter 1991 as a result of three drilling programs. The company drilled five deeper pool wildcats, resulting in three discoveries, and 43 Hugoton field Permian Chase and Council Grove gas wells. Of 16 development wells drilled to deeper reservoirs, Oxy will complete 11 in deeper zones and three in Chase sands.

GLOBAL NATURAL RESOURCES INC. will sell its nonstrategic U.S. leases to undisclosed buyers by June 30 for about $13 million, including the previous sale of its Hugoton interests. The producing properties hold proved reserves of 1.2 million bbl of oil and 3.4 bcf of gas. Bids have been accepted, and Global is in various stages of closing.

BENTON OIL & GAS CO., Ventura, Calif., bought an additional 13.3% working interest in West Cote Blanche Bay field in Louisiana from Pelham Partners Ltd. for about $9.5 million. Benton's interest in the field is now about 42%. Separately, Benton bought various interests in five gas wells in Putah Sink field in California's Sacramento basin for $1.65 million. Current Putah Sink production is 1.25 MMcfd.

ZAPATA CORP. directors approved a $10.5 million plan to work over four Wisdom field wells producing from Tequila platform on East Breaks Block 110, about 100 miles south of Galveston, Tex. Zapata, of Houston, expects the program to double Tequila gas deliverability to 55 MMcfd and increase reserves to nearly 90 bcf. Workovers are to be complete by December.

CRUSADER LTD., Brisbane, bought C.A.B. Resources Inc.'s 2.5% working interest in the Navajo exploration and development project targeting Pennsylvanian Desert Creek reefs in Utah, Arizona, and New Mexico, for $5 million. The interest increases to 3.5% in August 1994. Crusader now holds the largest nonoperator interest with 14.375%. Production exceeds 5,000 b/d of oil and 10 MMcfd of gas.

ALASKA OIL AND GAS CONSERVATION COMMISSION approved North Slope Borough's proposed development of Walakpa gas field, a Lower Cretaceous sandstone at about 2,3002,600 ft underlying the developed Barrow gas field, the only commercial gas production on Alaska's North Slope, 19 miles southwest of Barrow. Plans call for four to nine wells with an average combined deliverability of 4 MMcfd to meet Barrow's needs. The 1 Walakpa discovery and 2 Walakpa confirmation flowed 400 Mcfd and 2.2 MMcfd, respectively.

CNG

ANR PIPELINE CO. dedicated Detroit's first compressed natural gas refueling station June 5. ANR is converting company vehicles to run on CNG. It plans to partially fund vehicle conversion costs for its utility sales customers and provide auxiliary equipment for refueling.

EXPLORATION

ALASKA netted more than $7 million in apparent high bids at sales of state oil and gas leases June 4. Eleven concerns apparently acquired 36 tracts for $6.99 million out of $7.65 million exposed in Beaufort Sea Sale 65. BP Exploration apparently acquired the most tracts, eight for $662,552, and a combine of Exxon Corp. and Chevron Corp. had the highest winning bid, $977,521. Chevron, bidding alone or with Exxon, acquired six tracts for $3.298 million. In Kavik Sale 64, which drew six bids totaling $242,389, Unocal Corp. apparently acquired five tracts for $214,175.

KELLEY OIL CORP.'S 1 Richard deeper pool discovery in Grosse Isle field in Vermilion Parish, South Louisiana, flowed 1.24 MMcfd of gas and 1,027 b/d of 47.3 gravity condensate through an 8/64 in. choke with 10,875 psi flowing tubing pressure from Oligocene Camerina A at 16,713-746 ft. Kelley and affiliated entities hold a combined 62.5% interest in the well and Louisiana Land & Exploration Co. 37.5%.

ODECO OIL & GAS CO., New Orleans, cut 28 ft of pay sand in a new fault block below 11,000 ft on Ship Shoal Block 92 about 80 miles southwest of New Orleans. The 7 Ship Shoal 92 well flowed 4.1 MMcfd of gas and 90 b/d of condensate through a 14/64 in. choke with 3,674 psi flowing tubing pressure. Two wells drilled on the Ship Shoal tract in 1989 flowed oil from shallower pay. Operator Odeco owns 62.5% of the discovery and Seagull Energy Corp., Houston, 37.5%.

BARRET RESOURCES CORP., Denver, agreed to a joint venture drilling program covering 50,000 net acres in the Washakie and Red Desert basins of Southwest Wyoming. An initial eight well program is to begin immediately, mainly targeting Cretaceous Mesaverde at about 10,200 ft. Acreage includes 31,100 net acres farmed out from Amoco Production Co.

PACIFIC ENTERPRISES OIL CO., Los Angeles, 24-30 Tanner Federal, on its Meadow prospect in Campbell County, Wyo., Pumped 580 b/d of oil from Pennsylvanian Minnelusa Upper B pay at 8,884-8,932 ft. A confirmation to the Powder River basin strike is planned for early summer. PEOC holds a 100% working interest in the well.

GAS PROCESSING

MAXUS ENERGY CORP., Dallas, plans by fourth quarter 1991 to double capacity to 50 MMcfd with a second train at its gas processing plant in Roger Mills County, Okla. Current Maxus gas production and volumes available through third party contracts and other purchasing opportunities will support the new train's throughput at 80% of capacity. Maxus will buy additional gas in western Oklahoma to fill unused capacity.

ENVIRONMENT

RESOURCES CONSERVATION CO., Bellevue, Wash., received a permit from Environmental Protection Agency to operate its Basic Extractive Sludge Treatment (BEST) pilot plant. RCC will use the mobile plant to conduct onsite research and development studies for removal of polychlorinated biphenyls in contaminated solids, sediments, sludges, and other materials. Operating at low temperatures and low pressures, the low energy BEST process separates wastes into water, inert solids, and oil.

ENVIRONMENTAL PROTECTION AGENCY plans to offer U.S. industrial firms relaxed emission standards if they cut certain toxic air pollutants. Companies reducing specific gaseous toxics 90% or particulate toxics 95% by 1994 could be granted a 6 year extension of their deadline for cutting nontoxic air emissions. The proposal will appear soon in the Federal Register.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.