Table of Contents

• Results-based supplier relationships improve maintenance effectiveness
  About this report... This report shows ways to reduce refining maintenance costs by optimizing supplier relationships, eliminating defects, and conducting risk-based inspection. These and other topics are highlighted in this Refinery Maintenance Management report. While more gains are possible through improving internal maintenance programs, many refiners around the world are looking to suppliers of materials and services for the next wave of maintenance cost and reliability improvements.
• Engaging the entire organization key to improving reliability
  Manufacturing Game allows employees to work together to eliminate defects and learn how to translate their ideas into action. Plants can accelerate their maintenance improvements with lower risk by reducing the current workload through the elimination of the defects. Reducing the workload both increases the time available to do further improvements and minimizes the defects that come from poor practices that are inherently part of being in a reactive mode.
• Refinery embraces risk-based inspection plan
  A risk-based inspection (RBI) plan allowed the Conoco Inc. Commerce City, Colo., refinery to markedly cut its inspection costs and evaluate crudes, according to David Long, reliability leader at the refinery. From May through November of 1998, the Process North American division of Det Norske Veritas (DNV) conducted an RBI of the fixed equipment (process towers, drums, exchangers, and process piping) in the crude unit at Conoco's Commerce City, Colo., refinery.
• Fenceline-monitoring system solves big problem
  The Tosco Refining Co. Rodeo, Calif., refinery installed a fenceline-monitoring system in 1997. According to Dale Iverson, senior environmental engineer, it is the first of its kind in the world. The system identifies and measures the quantity of defined gases, such as methane and benzene, along the perimeter of the refinery. While the introduction of new technology into refineries can be a slow endeavor, unexpected events can push the process along more rapidly.
• Refiner uses software to optimize maintenance processes
  Chevron Products Co. is implementing enterprise resource planning (ERP) solutions for refining maintenance activities. Two of its refineries-at Richmond, Calif., and El Segundo, Calif.-are piloting the new maintenance-planning systems. Broadbase Information Systems Inc., Menlo Park, Calif., has been contracted by Chevron to develop a software application with which Chevron can analyze maintenance data. The application will be based on Broadbase's Enterprise Performance Management (EPM)
• Unocal goes to extremes to remediate two California petroleum spills
  History of the Guadalupe-Avila Beach spills [387,703 bytes] Guadalupe diluent spill extent [242,214 bytes] Unocal Corp.'s project manager for the Guadalupe diluent cleanup, Gonzalo Garcia, inspects a beachfront area that contains sensitive plants and wildlife. [12,932 bytes] Photo shows the installation of a high-density polyethylene wall to isolate a contaminated area. [35,363 bytes] Although most of the leaked diluent is underground, this photo shows where some of it has percolated to the
• IChemE launches process safety database
  The Institution of Chemical Engineers (IChemE), Rugby, U.K., has launched a new version of its accident database, which is intended to enable the process industries to learn from earlier mistakes. Although the first version of the database has been available since December 1997, this new version represents the full-scale launch of a growing archive of accident reports that could prove vital in meeting forthcoming safety laws.
• Appeals court overturns EPA's controversial smog/soot rule
  The U.S. Environmental Protection Agency plans to appeal to the U.S. Supreme Court a federal appeals court decison that overturned the agency's controversial smog and soot standards. Oil industry groups, which had joined in the court appeal, praised the District of Columbia Court of Appeal's decision. The American Trucking Association and the U.S. Chamber of Commerce filed the suit. In a 2-1 opinion, the justices said EPA overstepped its constitutional authority in promulgating the rule.
• U.S. gas groups confident of 30-tcf market
  Natural gas industry groups have told a U.S. Senate committee they are confident the U.S. industry could supply a 30-tcf market within the next 10-15 years. Testimony came from the American Gas Association, Interstate Natural Gas Association of America, and Natural Gas Supply Association. Paul Elbert, president and CEO for natural gas at Consumers Energy Co., Jackson, Mich., testified for AGA. Elbert told a Senate energy committee hearing on natural gas supply and infrastructure, "The
• EIA sees record U.S. natural gas demand this year
  Recent mild weather is expected to only temporarily slow growing U.S. demand for natural gas, which has grown 14% since 1990 and this year is expected to exceed the record 22.1 tcf set in 1972. That is the view from the U.S. Energy Information Administration. EIA said that, by 2020, U.S. consumption is expected to increase by 50% over 1998 levels, fueled largely by use in electric power generation. Use of natural gas by U.S. electric utilities has grown by 17% since 1990 and by 22% since 1994.
• OPEC slashes output but falls short of target
  The Organization of Petroleum Exporting Countries reduced oil production dramatically during April but failed to meet targeted cuts. Total OPEC output averaged 26.31 million b/d in April, according to Middle East Economic Survey (MEES), down from 27.77 million b/d in March, because of a cutback agreement by OPEC members in March (OGJ, Mar. 29, 1999, p. 18). However, the agreement called for the OPEC membership-excluding Iraq-to cut combined output to 22.976 million b/d, but these 10 countries
• Pre-empting outrage
  New software from consultant Dames & Moore, London, is designed to pre-empt public relations debacles such as Exxon Valdez and Brent spar. Outrage is a reputation risk-management program intended to help companies identify and quantify the potential for public resentment if their operations go wrong. The program is based on 12 principles identified by reputation and risk management guru Peter Sandman, a partner with Dames & Moore in promoting Outrage.
• INDUSTRY BRIEFS
  BHP Petroleum Pty. Ltd. unit BHP Petroleum (Trinidad) Ltd. made a natural gas discovery with the first exploration well on its Block 2c production-sharing contract area 40 km off northeastern Trinidad. Angostura-1, in 40 m of water, flowed 30 MMscfd of gas through a 56/64-in. choke during a cased-hole test. BHP plans a second exploration well, Kitchener-1, on neighboring Block 2ab, held by operator BHP 50% and Talisman (Trinidad) Holdings Ltd. Block 2c interest holders include operator BHP 45%,

• A court rebuke to EPA
  The oil and gas industry should welcome a judicial rebuke that the U.S. Environmental Protection Agency received this month over aggressive regulation against air pollution.

• Steerable PDC bits require balanced design
  The formation of ledges, as shown here, are a common occurrence of short-gauge, aggressive PDC bits. Such ledges can hang up bottom-hole assemblies, resulting in increased friction and mechanical slip-stick movements (Fig. 6). This PDC bit uses long-gauge pads to promote steerability. Although short gauge bits can kick off much quicker, long-gauge bits help eliminate ledges across the course of a directional well (Fig. 10). [12,026 bytes]
• U.S. crude oil production down 7% for 1999
  U.S. crude oil production has dropped 7% since the beginning of the year, the American Petroleum Institute reports. It said U.S. output was down 6.9% in April at 5.89 million b/d from the same month in 1998, and Alaskan output was off 9.9% at 1.089 million b/d. Natural gas liquids production fell 10.7% to 1.660 million b/d.
• MMS assesses FPSO use in gulf
  The U.S. Minerals Management Service has awarded a $1 million contract to Ecology & Environment Inc. (E&E), Buffalo, for assessment of the environmental effects of using floating production, storage, and offloading vessels (FPSOs) in the U.S. Gulf of Mexico. While FPSOs are used for deepwater developments in many areas of the world, MMS is required by the National Environmental Policy Act to determine the potential environmental effects of their use in U.S. gulf waters before they can be
• Money and moratoriums
  U.S. congressional committees are expected to mark up bills this summer to earmark federal revenues from Outer Continental Shelf oil and gas production. The legislation would designate 50% or more of OCS revenues, about $2.5 billion/year, for grants to coastal states and to fund nationwide conservation and wildlife programs. The bills wouldn't cost the oil industry a cent. All 34 states bordering oceans or the Great Lakes would share the boon, although there is production off only six. The
• NRC study finds little benefit from oxygenates
  A National Research Council panel has concluded that the two principal types of oxygen additives used in reformulated gasolines (RFG) in the U.S. contribute little to reducing ozone pollution. The NRC study examined the differences between the additives ethanol and methyl tertiary butyl ether (MTBE) and concluded that RFG made with ethanol is less effective but that the overall effect of either oxygen additive on reducing ozone (a major component of smog) is very small.
• French refiners warn of investment shortfall
  Despite the 6.1 billion franc record profits last year of the seven companies that comprise France's refining industry, their profitability remains insufficient to cover the big investments they will have to make in order to meet European Union specifications for fuels in 2005.
• Iran details petrochemical expansion plans
  NPC's strategic development program [147,820 bytes] Growth of NPC's Production Capacity [73,857 bytes] Iran is looking to drastically expand its petrochemical industry and is seeking outside investors to help it do so. To kick-start its petrochemical development program, Iran's National Petrochemical Co. (NPC) held the first Iran Petrochemical Forum in Tehran last month. There, it revealed the details of its expansion plans to international petrochemical and investment firms (OGJ,

• Pilot line verifies calculations for interface length, mixing
  Equations for calculating contamination [187,343 bytes] Tests of a pilot pipeline, built to mirror conditions of an operating Egyptian pipeline, have confirmed the validity of commonly available equations for calculating length and quantity of interfacial mixing. The research investigated the possibility of using the Shokeir-to-Assiout pipeline ( Fig. 1 [108,959 bytes] ) for batching crude oil and LPG with no physical barrier despite the density difference between pumped products.
• Seychelles thermal history, hydrocarbon generation traced
  Although little exploration has been carried out on the Seychelles microcontinent, there are a number of reasons to believe the area has considerable potential to produce hydrocarbons. The source rocks responsible for the huge accumulations of tar in Madagascar may well be present in Seychelles. 1 2 In addition, it is possible that major Mesozoic facies that sourced vast amounts of oil in the Middle East extend into Seychelles, as recent analyses and review have identified oil prone Type II
• Area Drilling
  Halliburton Energy Development Co. acquired part of Citra Paternindo NP's shares in enhanced oil recovery contracts in three fields in South Sumatra. Halliburton operates Abab, Raja, and Dewa fields, near Pendopo, with 50% interest (OGJ, Dec. 28, 1998, p. 54). Isramco Inc., Houston, let a contract to Atwood Oceanics Inc. to drill the Yam West 2 and an optional additional well starting in August 1999. Yam West 2 is to be drilled to 11,483 ft in 2,461 ft of water on the Med Yavne license in

OGJ Newsletter

• OGJ Newsletter
  U.S. INDUSTRY SCOREBOARD 5/24 [44,071 bytes] Several moves are afoot to attract additional investment into the petroleum industries of key Latin American countries.