Table of Contents

• Australia's Search For Petroleum: Patterns Of Discovery
  This is the first of a two-part article on patterns of discovery in Australian exploration. The second part will appear in OGJ's Exploration section June 14. It was adapted from a presentation at the 1999 Australian Petroleum Production and Exploration Association conference in Perth on Apr. 18-21 that was also published in the 1999 Appea Journal, Vol. 39, Part 1. Authors' references will appear in the second part of this article.
• Australia Promoting Offshore As Prime E&D Focus
  Where Australia will offer offshore acreage in 1999 [930,584 bytes] (Figure 1) Offshore Australia exploration maturity [233,970 bytes] (Figure 2) Australia is promoting its offshore sector as the primary focus of exploration and development opportunities in years to come. While some onshore opportunities remain, such as in the Cooper-Eromanga basin (see related article, p. 52), there is little doubt that Australia is continuing to evolve as a mainly offshore play.
• First Competitive License Round In 45 Years Sparks Exploration Revival In South Australia
  Tirrawarra oil field, the first Cooper basin oil discovery (1970), holds 80% of the oil found to date in the gas-prone Cooper-Eromanga basin of South Australia. Photo courtesy of Australian Institute of Petroleum Ltd.'s Petroleum Gazette. [32,668 bytes] Cooper Basin acreage offering [196,173 bytes] South Australia is about undergo a renaissance of exploration activity.
• China's oil imports rise possible boon for U.S.
  China's import dependency [34,224 bytes] Rising CO 2 emissions in developing countries [81,333 bytes] China's gas production potential [32,064 bytes] China's rapidly growing need for imported oil can serve as the basis for constructive U.S. diplomacy throughout Asia, a new study asserts. With economic growth lifting oil demand and domestic production unlikely to change, China soon will become a world-class oil importer.
• China's petroleum products demand to double by 2010
  China's long-term energy demand growth forecast looks healthy, although Asia's recent economic turmoil has dampened energy demand in the short term. This is the view of Datamonitor plc, London, which said that, while coal will remain China's primary energy source because of the country's huge resources of that fuel, consumption of electric power and oil products are set to rise.
• Pdvsa to shift focus to gas, downstream
  Petroleos de Venezuela SA is expected to see a shift in corporate focus as it tries to carve out a larger niche in the refined products market and develop its ample natural gas reserves. Venezuelan Energy and Mines Minister Alí Rodríguez told a congressional hearing in Caracas late last month that the government of President Hugo Chávez is looking for investments in all areas of the downstream sector. "We want oil to account for...the lion's share of exports and
• Pdvsa worries
  Concern is rising in Venezuela that the new government of President Hugo Chávez is interfering too much in the management of Petroleos de Venezuela SA (Pdvsa). Since taking office last February, Chávez has named three persons with limited oil industry experience to the Pdvsa board and has assigned all but two board officers to line responsibilities within the oil company, one of the world's largest.
• Elf betters Norsk Hydro's bid for Saga
  Elf Aquitaine SA has joined the fight to take over Saga Petroleum AS, Oslo, after Norsk Hydro AS and Norwegian state firm Statoil AS reached an agreement clearing the way for Hydro's own bid. Elf sees itself as riding to the rescue of Saga in the guise of a "white knight," having being invited to join the fray by Saga's management to prevent Hydro and Statoil splitting the independent between them. On May 28, Elf announced a surprise cash offer for Saga at 115 kroner/share
• Nigeria on hold
  Nigeria's new president, Olusegun Obasanjo, effectively put a chunk of his country's economy on hold by canceling all contracts made since Jan. 1 by his predecessor. On May 29, Obasanjo became the first democratically elected president of Nigeria in 15 years, having vowed to clean up the country's notoriously corrupt government and industry (OGJ, Mar. 8, 1999, p. 38). The contracts freeze is intended to reassure Nigeria's creditors, particularly the International Monetary Fund,
• INDUSTRY BRIEFS
  Dominion Resources Inc. ,
• Baltic Rim gas, retail businesses overhauled
  Finnish petroleum and energy company Fortum Oy has sold 50% of the shares of Gasum Oy, its 75-25 gas supply joint venture with Russia's Gaz- prom. The sale was a condition for approval by the European Commission of Finland's plans to merge state petroleum and electric power firms Neste Oy and Imatran Voima Oy, respectively, to create Fortum (OGJ, Dec. 29, 1997, p. 23).
• BP Amoco boosts solar in gasoline stations
  BP Amoco plc plans to install its own solar power technology in 200 of its new gasoline stations around the world over the next 2 years. The company said solar panels will help to meet the electric power needs of all new BP Amoco service stations slated to be built in the U.K., Australia, Germany, Switzerland, the Netherlands, Japan, Portugal, and Spain. A typical installation would incorporate up to 400 of BP Amoco's solar panels in the canopies above the pumps. The 200-station program is
• Shell pilots safer road tanker design
  Shell U.K. Ltd. has begun using a prototype road tanker designed to make fuel deliveries to small customers quicker and safer. The tanker was developed for the commercial distributors' market by Lakeland Tankers Ltd., Redditch, U.K., along with Shell and motor industry firms Renault (U.K.) Ltd., Alfo Haar (U.K.) Ltd., Benfell's Ltd. and BH Sala.
• Long view of Caspian oil export options tilts to Kazakhstan-China
  Tengiz oil field is an example of the vast oil deposits in the Caspian Sea region that have led the international oil industry into the thorny geopolitics of exporting Caspian oil. Photo courtesy of Chevron Corp. Caspian region export pipeline politics are looking increasingly to the west. With the Caspian Pipeline Consortium (CPC) and Baku-Ceyhan options dominating the discussion, eastern alternatives are being virtually ignored (OGJ, Apr. 19, 1999, p. 29; Oct. 26, 1998, p. 29).
• Caspian crude oil export pipeline completed
  Engineering contractor Kvaerner E&C plc, London, has announced completion of a pipeline to export early oil production from Chirag field in the Caspian Sea. The 115,000 b/d capacity pipeline extends 830 km from Sangachal, south of Baku in Azerbaijan, to Supsa on Georgia's Black Sea coast, and delivered first oil on Apr. 6, although commissioning was completed on May 27. Kvaerner built the pipeline and an export terminal at Supsa under contract to the Azerbaijan International Operating Co.

• Global warming education
  Official Europe has not glittered with scientific sophistication in its treatment of the global warming issue. For that reason, any official effort to educate Europeans about the matter is cause for alarm. The European Consultative Forum on the Environment and Sustainable Development will recommend such an effort to the European Commission, part of the European Union, this month (OGJ, May 3, 1999, p. 54). "An initiative," the forum says, "is necessary to foster changed attitudes and behavior."

• Venezuela's Anaco district to see hike in drilling outlays
  Venezuela's state oil company Petro- leos de Venezuela SA and private companies operating in the country's eastern Anaco district will invest about $320 million for development and production activity there in 1999. Most of the projected capital expenditures will be used to drill 50 new oil wells and work over a further 74 wells. Pdvsa projects that output in Anaco will increase to 200,000 b/d within the next 5 years from the current level of 80,000 b/d. Jose Pacheco, a senior official
• Teamwork, downhole technology expedites Tierra del Fuego operations
  A bit similar to this four-bladed, 12¼-in., Diamond Products International polycrystalline diamond compact, drilled a single-footage world record of 22,221 ft in Total's Cullen Sur No. 1 well, located southeast of the Cullen Norte No. 1. Average penetration rates achieved 100 ft/hr over a period of 221 hr. The previous single-footage record of 15,579 ft was set in 1994 (Fig. 2). To assess and optimize hole-cleaning efficiency, the amount of cuttings were tracked real time through the
• China's offshore crude oil flow to drop 11% in 1999
  China's offshore crude oil production is expected to drop 11% to 14.5 million metric tons in 1999 from 16.3 million tons in 1998. It will be the first time in 5 years that China National Offshore Oil Corp.'s (Cnooc) crude production has fallen. Cnooc's production has been growing at an average annual rate of 29% since 1994.

• Dynagrams help design, diagnose sucker-rod pumping systems
  A spreadsheet designed by the author facilitates the design and diagnosis of sucker-rod pumping systems by wave-train analysis. Incorporated within the spreadsheet are equations required for presenting quantitative, theoretical pump dynagrams, and pressure-vs.-stroke diagrams. The spreadsheet allows the user to study the effects of a range of fluid properties and pump geometries. Gibbs, 1
• India's oil imports jump as refineries start up
  India's crude oil imports are expected to rise substantially in the current 1999-2000 fiscal year as massive new refining capacity comes on stream. About 41 million metric tons/year of new Indian refining capacity is being commissioned in 1999. This is more than 60% of the 67.55 million tons/year of refining capacity set up in the country to date, including 6 million tons/ year at the Panipat refinery of Indian Oil Corp. (IOC) which will be fully commissioned in the next few weeks (OGJ,
• Pemex reopens refinery revamp bidding
  Mexico's Petroleos Mexicanos has reopened bidding for revamps of two of its refineries, at Tula, Hidalgo, and Salamanca, Guanajuato. On Mar. 10, Pemex voided the original bidding round for the upgrade projects, citing a lack of competitive offers (OGJ, Mar. 15, 1999, Newsletter). According to Pemex officials, no significant changes were made in the terms of the work contract for this new round, but more time was seen as necessary to allow more companies to participate in the bidding.

• Optimal HDS for lower-sulfur gasoline depends on several factors
  Hydrotreating equations [67,802 bytes] Optimal selection of a gasoline desulfurization technology for a particular refinery depends on the characteristics of sulfur compounds in gasoline, kinetic parameters of hydrodesulfurization (HDS) reactions, catalysts, and processing options. The overall refining scheme and marketing objectives are also important factors.
• World's largest FCC power recovery train commissioned in February
  The world's most powerful fluid-catalytic cracking (FCC) power recovery train, according to its designer and builder, has been installed at Valero Refining Co.'s Corpus Christi, Tex., refinery. The expander and compressor were installed during an FCC unit turnaround in February 1999. The new FCC hot gas expander is Conmec's model FEX-142 single-stage expander. It produces a record 50,000 hp (37.3 MW) at 3,600 rpm. This expander has about 40% more power than Valero's existing
• NELSON-FARRAR COST INDEXES
  Nelson-Farrar Cost Indexes [207,652 bytes] Copyright 1999 Oil & Gas Journal. All Rights Reserved.

• Faroese independent eyes licensing round
  Faroes licensing round [171,499 bytes] The Faroes Oil & Gas Co. (FK) and London-based Dana Petroleum plc have declared their intention to bid together in the forthcoming Faroe Islands offshore licensing round. The Faroese parliament is expected to debate proposals for the islands' first licensing round in October, following the recent signing of a maritime boundary agreement with the U.K. (OGJ, May 17, 1999, p. 33).
• Angola awards deepwater PSAs
  Angola license awards [67,892 bytes] As interest mounts in Angola's hot deepwater play, state firm Sonangol has awarded production-sharing agreements to BP Amoco plc, Elf Exploration Angola, and Exxon Corp. BP Amoco was awarded Block 31, which covers 5,400 sq km of the prolific Lower Congo basin in water 1,500-2,500 m deep. BP is now operator of Blocks 18 and 31 and interest holder in a further six licenses here. Block 31 license interests are: operator BP Amoco 26.67%, Exxon unit Esso
• Conoco pioneers seismic cabling method
  Conoco Inc. has developed a technique that it says halves seismic cabling requirements, thereby protecting threatened and endangered plant and animal species. Using state-of-the-art 3D seismic equipment, Conoco workers walked radio seismic recording devices into a 355 sq mile area of northwestern New Mexico's San Juan basin last year while exploring the basin's deeper formations for indications of oil and gas.
• Thai wells set length, drilling speed records
  PTT Exploration & Production plc successfully completed the longest well drilled in Thailand at its Bongkot gas field, with a long hole drilled length of more than 5 km. Unocal Thailand bored the Funan J-13 gas well at a rate of 5,145 ft/day, believed to be a world record. This performance eclipsed the previous single-well Gulf of Thailand record of 4,720 ft/day set in 1997 on the Satun A-17 well, also by Unocal Thailand. Funan J-13 was drilled to 9,862 ft (7,900 ft true vertical depth) in 46
• McAllen Ranch properties yield 1.1 tcf in 40 years
  Shell Texas Gulf Coast Resources Co. recently drilled its 100th producing natural gas well on the main McAllen Ranch lease, marking nearly 40 years of development at the historic lower Rio Grande Valley field. Shell Texas Gulf Coast Resources is one of the Shell Continental Cos. This newest well, drilled to offset the McAllen 2 and 3 wells, is part of a program designed to rejuvenate one of the oldest parts of the field. The well was drilled to a depth of 12,700 ft and tested at 10 MMcfd of
• Area Drilling
  Seven Seas Petroleum Inc., Houston, said the Tres Pasos-1W horizontal well in Guaduas field produced at a maximum rate of about 7,000 b/d of oil after acid treatment and is shut-in for pressure build-up. The well on the Rio Seco block has produced 90,000 bbl of oil from Upper Cretaceous Cimarrona at about 6,000 ft. The company is encouraged by the test results and optimistic that horizontal drilling may enhance production from the structurally lower area of the field on the Emerald Mountain

OGJ Newsletter

• OGJ Newsletter
  Due to a holiday in the U.S., data for this week's Industry Scoreboard are not available. Industry consolidation has taken a step forward and one backward. Shareholders of Exxon and Mobil have okayed the companies' planned $82 billion merger, leaving regulatory approval in the U.S. and Europe as the final hurdles. Individual owners cast their ballots overwhelmingly in favor of the marriage, with 99% of Exxon's voting shareholders and 98% of Mobil's endorsing the deal. Industry