Table of Contents

• Ethylene-capacity growth slowed in 1998
  Dow Chemical Co. expanded its ethylene-production capacity at Fort Saskatchewan, Alta., from 1.2 to 2.4 billion lb/year in 1998. The ethylene produced from the expansion is being used in existing ethylene-based plants at the site, such as polyethylene and vinyl chloride monomer plants. Worldwide ethylene-capacity growth decreased sharply this year. Ethylene capacity increased by about 2.1 million metric tons/year (mty), or 2.5%, to 90.9 million mty.
• New Thailand ethylene plant commissioned
  Thailand's third world-scale olefins complex came onstream in February, making the country a dominant player in the Southeast Asian petrochemical industry while aggravating the oversupply situation, especially in Thailand. The new olefins plant, owned by Rayong Olefins Co. Ltd. (ROC), can produce 600,000 metric tons/year (mty) of ethylene and 300,000 mty of propylene. ROC plans to step up its capacity utilization from 70-80% in February to 100% in March. Siam Cement Group owns 65.5% of the
• INTERNATIONAL SURVEY OF ETHYLENE FROM STEAM CRACKERS-1999
  INTERNATIONAL SURVEY OF ETHYLENE FROM STEAM CRACKERS-1999 [166,643 bytes] Copyright 1999 Oil & Gas Journal. All Rights Reserved.
• Grappling with downturn tops '99 energy agenda of U.S. Congress
  Left to right, Sen. Thad Cochran (R-Miss.), Sen. Mary Landrieu (D-La.), Rep. Don Young (R-Alas.), and Rep. Billy Tauzin (R-La.) explain their Outer Continental Shelf revenue-sharing bill at a press conference. The U.S. oil industry's depression has added a rare sense of urgency to energy legislation in the U.S. Congress this year. Although oil prices fell most of last year, legislators from oil states accomplished almost nothing in response.
• Domenici files broad bill to help U.S. oil producers
  Sen. Pete Domenici (R-N.M.) has filed a comprehensive bill to help U.S. oil producers survive the current oil price depression, which he said is atypical of the industry's historic "boom-and-bust" cycles. Some of the provisions would take effect as of the beginning of this year, while others are triggered by the price of oil. Some would kick in when foreign oil imports exceed 50% of U.S. consumption, and more drastic measures are triggered when they exceed 60%.
• Prospect of U.S. retail electric reform still questionable
  Key U.S. congressional representatives are deeply split on the issue of retail electric market reform, dimming the prospects for legislation this session. The representatives told a forum hosted by Atlantic Monthly magazine and the Edison Electric Institute last week that the issue basically is on hold until the Clinton administration submits its proposed legislation to Congress. Energy Sec. Bill Richardson said the bill would be sent to Capitol Hill early in April.
• Senate bill offers oil relief measures
  The U.S. Senate has approved two oil industry relief measures as part of a $2 billion fiscal 1999 supplemental appropriations bill. Both of the bills, approved last week, were sponsored by Sens. Pete Domenici (R-N.M.) and Jeff Bingaman (D-N.M.). One amendment would create a $500 million Emergency Oil and Gas Guaranteed Loan Program. A board would oversee the initiative with a $2.5 million budget.
• Production cuts affirmed at OPEC meeting
  The Organization of Petroleum Exporting Countries has agreed to cut total oil production by 1.7 million b/d beginning Apr. 1 and continuing for 1 year. Non-OPEC producers followed the OPEC agreement with a pledge by the governments of Mexico, Norway, Oman, and Russia to contribute combined cuts of 400,000 b/d.
• Venezuela's path
  The government of Hugo Chávez continues to grapple with a very difficult problem: restructuring Petroleos de Venezuela SA at a time when world oil prices are under pressure. Venezuelan Energy and Mines Minister Alí Rodríguez raised eyebrows recently when he said Pdvsa would have to sell $1 billion of bonds immediately to cover $900 million needed to pay its suppliers. The bonds would be guaranteed with revenue from oil sales. Rodríguez explained that Pdvsa has suffered
• Technology key to enduring depressed crude oil prices
  Barring unforeseen events, the petroleum industry should expect no early relief from depressed crude oil prices and tough petroleum industry economics. As a result, many development projects will remain in jeopardy of being postponed or canceled. But advances in technology can help companies cope with the current price climate by shaving exploration and production costs. This general outlook was shared by several speakers at last month's Canadian Energy Research Institute (CERI) conference.
• Economic problems threaten Sakhalin E&D
  The Economic & Social Research Council (ESRC), Swindon, U.K., says economic problems in Russia's far east threaten major oil and gas projects off Sakhalin Island. ESRC-sponsored research by Mi- chael Bradshaw of the U.K.'s University of Birmingham reportedly makes it "abundantly clear" that the region is unable to develop its huge resource potential to build an export-led economy.
• Conference debates potential of Ivory Coast
  While the oil industry is in bad shape worldwide because of low oil prices, West Africa is still a bright star on the industry's horizon. This is the view Steve Thornton, director of international operations planning, Ocean Energy Inc., Houston, offered delegates to the Offshore West Africa conference in Abidjan, Ivory Coast, on Mar. 23. "West Africa is one of the fastest-growing exploration and production theaters in the world," said Thornton. "It has vast resources that have hardly been
• INDUSTRY BRIEFS
  Qatar General Petroleum Corp. (QGPC) plans to supply natural gas to the U.A.E. and Oman under a deal forged by the United Arab Emirates Offset Group (UOG). UOG is a government unit established in Abu Dhabi to promote industrial ventures. Under the contract, up to 3 bcfd of gas would be supplied to U.A.E. and Oman for use in petrochemical plants, power generation plants, and other gas-consuming industries. UOG anticipates spending $8-10 billion over the next 6-7 years on a number of projects
• Web business booms
  U.K. entrepreneur Charles Cohen has launched a currency, called Beenz, that he hopes to make valid for trading on the worldwide web. Cohen's intention is to unify shopping online and, of course, to make a few bucks in the process. His Beenz is just the latest-if perhaps eccentric-attempt to find a way of doing business on the web. PA Consulting Services Ltd., London, reckons the potential for 'e-commerce' is huge: "It is a potential marketplace of 1 billion customers who can be
• EIA: U.S. gasoline prices rebounding
  The average retail price for regular gasoline in the U.S. has topped $1/gal for the first time in more than 4 months, said U.S. Energy Information Administration. As of Mar. 22, the cash self-serve price of regular gasoline was 101.7¢/ gal, up 4¢ from the previous week. The price has risen 11¢ since reaching a low of 90.7¢ cents on Feb. 22. The average price was the highest since last Oct. 19, when prices were in the midst of an 8-month decline.

• Oil prices and layoffs
  What now for the oil and gas industry's professional dimension? It is, of course, too soon to declare $10/bbl oil yesterday's news. The possibility nevertheless looms that the recent layoff spree by oil companies will appear in retrospect to have been hasty. Yet what are companies to do when their central commodity loses half its value in 2 years' time? Durable profitability is essential. Workers cost a lot of money. When oil prices slump, something must give, including payroll.

• Downturn hobbling upstream technology R&D
  New technology and the business cycle [87,903 bytes] Cost comparison of top 24 U.S. Oil and gas producers [135,403 bytes] Non-Opec 1999 Production Decline Scenario [67,766 bytes] Serious concerns of declining capital availability, the lack of technology sponsorship, and the growing threat of depletion are among the top concerns over the state of drilling and production technology worldwide. Those issues were at the forefront of the Society of Petroleum Engineers/ International Association of
• Hydropulses increase drilling penetration rates
  Tempress Technologies Inc. developed this prototype pulsation device to test flow rates and drilling properties (Fig. 3). This 20% back-rake cutter bit drilled two samples of Mancos Shale (Fig. 9). [19,264 bytes] Intense suction-pressure pulses (hydropulses), utilizing a small-scale cycling valve, resulted in increased drilling-penetration rates for test samples of Mancos Shale and Colton Sandstone.

• Procedure optimizes lift gas allocation
  Lift-Gas Allocation [60,556 bytes PDF format] A calculation procedure optimized lift-gas allocation to 41 oil wells in the Barúa-Motatán oil field in Venezuela. The objective was to attain the most crude production with the limited gas available. The procedure uses Lagrange multipliers to obtain an analytic expression of the optimum gas injection for each well. Unlike some numerical nonlinear programming methods, this procedure does not require an initial estimate of the
• NPRA: Refiners eye new ways to manage costs
  U.S. refiners continue to face hard times. Many are seeking new ways to manage costs in a period of depressed margins. At the same time, most are considering investments to prepare for low-sulfur fuel requirements in the future. These and other issues were the key focus of the National Petrochemical & Refiners Association (NPRA) annual meeting last week in San Antonio.
• Aussie LNG projects squabble over marketing
  Mobil Oil Australia Ltd. has dashed hopes of a united marketing effort for Australian liquefied natural gas by deriding a recent proposal put forward by Woodside Petroleum Pty. Ltd. and Shell Australia Ltd. and endorsed by Chevron Asiatic Ltd. Mobil is a partner in the proposed Gorgon LNG project off Western Australia. The company maintains that the Australian LNG concept would preclude producers from competing at the customers' doorstep and ultimately could have adverse implications for
• Fluid dynamics visualization solves LNG plant recirculation problem
  Plot of velocity vectors superimposed on temperature contours shows recirculation effects. These results indicate the importance of equipment position (Fig. 2). Flow streak lines for airflow entering and exiting the equipment along with the wind demonstrate the mechanisms of recirculation and beneficial updraft of the gas-turbine exhaust plumes (Fig. 3). [25,388 bytes] Recirculation occurred only at off-normal wind directions when exhaust from turbine generators and recirculation from the

• Solar-heating system studied for heavy-oil pipelines
  Modeling of a solar-powered, heat-tracing system for pipelines suggests it can be successful as a nonintrusive pour point depressant or drag-reducer, according to Solar Systems Pty. Ltd., Hawthorn, Vict., Australia. The company developed the Helitherm system, which is patented in the U.S., Europe, and Australia.
• Enbridge, LOOP plan Gulf of Mexico crude oil pipeline
  Enbridge Inc., Calgary, and LOOP LLC, New Orleans, have proposed a new crude oil pipeline that will carry 600,000 b/d of crude oil from the eastern Gulf Coast to refineries on the western Gulf Coast ( see map [126,458 bytes] ). The companies intend to build the line to meet growing demand for heavy, sour oil by western Gulf Coast refiners, said the partners. Project operator Enbridge and partner LOOP have completed feasibility and engineering studies on the proposed Alligator pipeline, which
• Upper Midwest gas pipeline project slated
  Three Midwestern energy companies-Wicor, CMS Energy Corp., and Northern States Power Co. unit Viking Gas Transmission Co.-have signed an agreement to build an interstate natural gas pipeline to serve markets in northern Illinois and southern Wisconsin. Each company will hold an equal ownership percentage in the proposed project, to be named Guardian pipeline. Guardian's initial capacity will be 750 MMcfd of gas, which will be shipped from numerous interconnections with major interstate

• Nigerian independent details his country's E&P prospects
  In the future, Nigeria's marginal field exploration and production licenses are expected to be awarded only to indigenous oil companies or to joint ventures of foreign oil companies with indigenous firms. Yinka Adeyemi, general manager of Nigeria's Spectrum West Africa, said many of these indigenous companies are primarily concerned with other industries and are seeking foreign partners to provide not only funding for E&P work but also expertise.
• Vastar, Elf report deepwater gulf finds
  Operators have made two significant hydrocarbon finds in the deepwater Gulf of Mexico. Vastar Resources Inc., Houston, and Elf Aquitaine's U.S. unit Elf Exploration Inc. last week disclosed the separate strikes, both in the gulf's Mississippi Canyon area. Partners involved in both discoveries call their respective finds "significant." Vastar made an oil discovery on the deepwater Mirage prospect on Mississippi Canyon Block 941. The well was drilled to a measured depth of 16,600 ft in
• Anomaly shifts indicate rapid surface seep rates
  Surface geochemistry in petroleum exploration relies on the process of vertical migration. One of the key elements in the theory of vertical migration of hydrocarbons is the rate at which petroleum migrates from the reservoir to surface. The rate of hydrocarbon migration has been subject to debate for a number of years.

OGJ Newsletter

• OGJ Newsletter
  Last week's agreement between OPEC and non-OPEC oil producing nations to cut crude oil output (see story, p. 18), in conjunction with fundamental corrections already under way, has set the stage for a turnaround in world oil markets. That's the view Purvin & Gertz's Ken Miller presented to the firm's seminar at The Woodlands, Tex., last week.
• Area Drilling
  A group led by Mohave Oil & Gas Corp., Houston, spudded the Caporal 1 wildcat on the 233,000 acre Tapir Association Contract in the eastern Llanos basin on Mar. 13, reports Solana Petroleum Corp., Calgary, a participant. The wildcat, projected to 7,800 ft, targets a large stratigraphic trap at 7,700 ft in Cretaceous Ubaque sandstone. It is 15 miles southeast of the Mateguafa 1 discovery on the block. Mateguafa produced at rates of at least 777 b/d of 32° gravity oil from Oligocene