Table of Contents

• Water depth production record set off Brazil
  ABOUT THIS REPORT... This production report describes advances in technology that permit oil and gas production from deeper water and tighter and more complex reservoirs. Offshore Brazil, a well recently set a record for producing oil from the deepest water. In South Texas, an operator applied advanced technology to increase production from a low-permeability, depletion-drive reservoir. New wire line tools and interpretation techniques provide continuous well permeability profiles ideally
• Technology tackles low-permeability sand in South Texas
  Through aggressive applications of advanced technology, Swift Energy Co. increased its natural gas and oil production from the AWP Olmos field in South Texas by more than fivefold in less than 21/2 years. At the same time, it substantially reduced per unit development and production costs. Gross daily production was more than 67 MMcf equivalent by mid-1997, compared to about 12 MMcf equivalent in early 1994.
• New exploration concepts spark Swiss gas, oil prospects
  A recently completed data synthesis and evaluation 1 based on the interpretation of public well data and seismic lines and the application of modern basin-modeling tools upgrades gas and oil prospects in Switzerland. The study gives insight into key elements of the petroleum systems of Switzerland and comments on new promising gas and oil play concepts. Switzerland, a highly industrialized country in the heart of Europe, is 100% dependent on imported fossil and nuclear fuels. Since 1912, only
• Permeability profiles provide new reservoir management tools
  New tools and interpretation techniques provide continuous well permeability profiles without coring or extensive well testing. These profiles obtained from wire line logs are ideally suited for reservoir description and management. With these permeability profiles, reservoir engineers can quantify heterogeneity and tailor completions to maximize recovery rates and efficiencies.
• China's deregulation, expansion not enough to restore market balance
  Southern China's Maoming refinery in Guangdong province is unable to keep up with local products demand despite a massive modernization program. Soaring refining products demand in China's booming southern provinces helps keep a prop under ever-rising products imports. Oil Production and Net Exports Diesel Production, Consumption, and Net Exports
• Shell to acquire Tejas Gas Corp.
  Shell Oil Co. has agreed to acquire Houston's Tejas Gas Corp. in a deal valued at $1.45 billion. The move is the latest in a string of such deals involving natural gas businesses (OGJ, Apr. 21, 1997, p. 19). Under terms of the agreement, Shell will acquire all of Tejas's outstanding common stock for $61.50/share in cash and assume balance sheet debt and preferred stock of about $900 million. The Tejas board of directors has recommended the deal to its stockholders.
• Industry Briefs
  Offshore Europe exhibition and conference, which took place in Aberdeen this month, was referred to incorrectly as Offshore Northern Europe (OGJ, Sept. 15, 1997, pp. 26-27). Texaco Development Corp.,
• Japanese firms eye Alaskan LNG project stake
  Mitsui & Co. and Mitsubishi Corp. are seeking a 10% stake in a proposed project to export Alaska North Slope (ANS) liquefied natural gas to Asia. The Japanese trading houses hope to negotiate a deal with Exxon Corp. and partners to import 7 million metric tons/year-an amount equivalent to about 15% of Japan's current LNG demand-beginning in 2007. Mitsui and Mitsubishi want to invest more than 100 billion yen ($821.4 million) in the massive project, according to Japanese press reports.
• Price/demand strength buoys 1st half profits
  Higher oil prices and increased petroleum product consumption have boosted first half profits for a sampling of North American oil and gas companies. Most of the increase was due to extremely favorable financial results in the first quarter. Oil prices weakened in the second quarter, and profits and revenues for this sample of companies were off slightly from the same quarter a year earlier. Higher demand for petroleum worldwide also helped to boost earnings, although demand for natural gas in

• Floating dry dock and wheel-on-rail system expedites jack up repairs
  A unique wheel-on-rail system and floating dry dock expedited leg removal and repair work on a Gulf of Mexico jack up. Sundowner Offshore Services Inc. contracted Ingalls Shipbuilding of Pascagoula, Miss., to replace the jacking gears and racks for the Dolphin 110 (Fig. 1 [24,250 bytes]) .
• Campbell Wells
  U.S. petroleum industry groups are preparing for an onslaught of criticism when television network CBS airs a special news report on oil field wastes, probably in October. The show will focus on U.S. Liquids Corp.'s Campbell Wells nonhazardous waste disposal facility near Houma, La. In 1994, residents of the nearby Grand Bois community sued U.S. Liquids and Exxon Corp., alleging illnesses after the site received solid wastes from an Exxon field in Alabama. The class-action lawsuit is to be
• MMS lists options for royalty rule changes
  The U.S. Minerals Management Service has released alternatives for proceeding with its controversial oil valuation rule (OGJ, Sept. 15, 1997, p. 25). The rule would require the value of most production to be set on the average of New York Mercantile Exchange futures prices, adjusted for crude quality and location. It was amended in July to allow independent producers to use the value of crude sold in arm's-length transactions.
• Spreading demand for gas treatment
  Since the fall of the communist regime, gas-producing countries among former Soviet Union (FSU) satellites have been increasingly competing for customers inside and outside the FSU. Some of their target customers in western Europe have tighter specifications for sales gas than the Soviet regime, so the new republics are keen to import gas treatment technology. Uzbekistan is the only former Soviet state to increase gas output since the Soviet system collapsed. Total production averaged 480 MMcfd
• Canadian plant ups C 3 recovery without more dehydration
  The debutanizer, stripper, and absorber sit adjacent the process skid building at Poco Petroleums Ltd.'s Wolf South plant. Poco Petroleums Ltd., Calgary, has enhanced propane recovery at its Wolf South plant, near Edmonton, without additional dehydration or external solvent make-up. This was accomplished with a 45-MMscfd addition that uses the Mehra Process unit. The unit uses the heavier components of the natural-gas feed as the preferred solvent while limiting incremental gas-side
• Petrochemical deals mark European shakeout
  Europe's petrochemical's industry shakeout continues with disclosure of partnership changes in two recently formed giant joint ventures, Montell and Borealis. Royal Dutch/Shell has bought for $2 billion from Montell JV partner Montedison SpA its 50% stake in the company and launched a radical shake-up of its global chemical business. At the same time, Borealis has disclosed plans to buy Austrian producer PCD Polymere GmbH, Schwechat-Mannsworth, to bolster its position as Europe's

• To diversify its petrochemicals portfolio, GCC needs liquid feeds
  The utilization of condensates and refinery-derived feedstocks will fill the gap in the GCC's current petrochemical slate. But numerous opportunities exist for further development of the region's petrochemical industry during the next 20 years, especially in products derived from benzene, paraxylene, and propylene.

• Turkmenistan details Caspian license round
  Contract Areas Off Turkmenistan [61,397 bytes] Caspian Sea Strat Column [22,361 bytes] Turkmenistan has offered 11 eastern Caspian Sea contract areas in a licensing round due to close Nov. 28. The round was announced at the American Association of Petroleum Geologists International Conference and Exhibition Sept. 10 in Vienna (OGJ, Sept. 15, 1997, p. 34). Tender presentations will be held in Vienna, London, Houston, and Ashgabat, Turkmenistan. The Houston presentation is scheduled to take place
• Forest Service blocks leasing in Montana national forest
  The U.S. Forest Service has decided against oil and gas exploration in most of the Lewis and Clark National Forest in Montana. Forest Supervisor Gloria Flora decided not to allow drilling along the Rocky Mountain front range from the southern tip of Glacier National Park nearly to Helena. A draft environmental impact statement issued last year had offered Flora the option to allow leasing in three small areas of the front range, with tight drilling restrictions.
• Coastal lists Smackover, Sunniland objectives in gulf off Florida
  Coastal's Prospects Off Florida Coastal Petroleum Co., Apalachicola, Fla., has made public more details about its drilling prospects in the Gulf of Mexico off Florida. The company is in a many-year legal fight with the state to drill on an 880,000-acre band of leases between 7 and 10 miles off the coast from Apalachicola to south of Naples. Coastal said the leasehold is "basically out of sight of Florida's pristine beaches."

• Fast track and trade
  The oil and gas industry should support renewal of fast-track negotiating authority for the U.S. President in matters of trade. As trade goes, so goes a large measure of economic growth. And as economic growth goes, so goes demand for oil and natural gas and for the services and supplies essential to production, transportation, and processing.

OGJ Newsletter

• OGJ Newsletter
  Some key petroleum privatization efforts in Asia have marked milestones. Iran may break a state monopoly and allow private investment in grassroots refinery construction. An Iranian newspaper reports that privately funded refineries will be built in areas where the population has difficulty obtaining oil products. In areas closer to oil reserves and transportation infrastructure, private investment will be allowed in export refineries only. State-owned NIOC will furnish crude at international