Table of Contents

• Worldwide gas processing continues to expand, shift balance
  Construction nears completion earlier this year on inlet-gas and NGL-fractionation expansions at Phoenix Park Gas Processors Ltd.'s plant at Point Lisas, Trinidad & Tobago. Among the largest in the Western Hemisphere now, the plant will fractionate liquids from the nearby Atlantic LNG plant that will start up this month. U.S. Gas-processing trends [51,062 bytes] U.S. plant construction [59,031 bytes] Gas processing outside North America in 1998 continued to gain ground on the U.S. and
• World LPG trade patterns poised for rapid change
  Changes in worldwide LPG production capacity and demand will cause the East-of-Suez region to move from being a net LPG exporter to a net importer in 2000. This shift is a departure from historical trade patterns. The deficit of LPG in the Middle East will last only until 2003 when production capacity in the region again begins to increase to overcome internal regional demand ( Fig. 1 [73,598 bytes] ).
• Capacities as of January 1, 1999, and average production
  Survey 1 [16,410 bytes] Survey 2 [206,556 bytes] Copyright 1999 Oil & Gas Journal. All Rights Reserved.
• World sulfur production
  Survey 1 [41,812 bytes] Copyright 1999 Oil & Gas Journal. All Rights Reserved.
• Russian oil major Yukos implements western-style reorganization
  Located near the Ob River, the Priobskoye oil field, with estimated reserves of 680 million metric tons, is one of the largest partially developed oil fields in Western Siberia. This field was recently included on the Russian Federation's list of oil fields that can be developed through production-sharing agreements. Photo courtesy of Yukos Oil Co. Russia's Yukos Oil Co., determined to become a world-class oil company, is engaged in an aggressive, two-part reorganization to reduce costs
• Yukos's debt to western creditors may improve its standing
  As a result of fallout from Russia's economic woes, Russian oil major Yukos has seen nearly a third of its shares fall into the hands of foreign banks. The upshot is that this may have strengthened the company's prospects. Three foreign banks-West Merchant Bank of Germany, Daiwa Bank of Japan, and Standard Bank of South Africa-have gained control of a combined 31.9% percent of the company, entitling them to 8 seats on the 24-member board of directors.
• Mission to monitor climate change
  Exxon Corp. urges further consideration of the subject before expensive regulations are imposed, Royal Dutch/Shell and BP Amoco plc advise a precautionary approach, and scientists are divided. We're talking global warming, and in the latest step of the debate, the European Space Agency (ESA) is to undertake a space mission to measure the changing thickness of the polar ice caps. The £400 million Living Planet program will comprise a series of space missions to chart the Earth's
• U.K. operators fight climate- change tax levy
  The U.K. Offshore Operators Association told the government its proposed climate-change levy would fail to reduce greenhouse gas emissions as intended while hitting the energy industry hard. Following a Department of the Environment consultation paper in February, H.M. Customs and Excise drew up a plan to impose a tax on energy users aimed at reducing overall energy use as a means of reducing emissions. Ukooa said the taxation plan proposals ignore the findings of the environment
• Shell, Exxon get high environmental ratings
  Environmental ratings of selected oil firms [88,585 bytes] Environmental strategy recommendations [94,721 bytes] Royal Dutch/Shell and Exxon Corp. have emerged as the top two environmental performers in a study of selected oil and gas companies' "eco-efficiency." The study was performed by Innovest Strategic Value Advisors Inc., Toronto. "Shell's $500 million investment in renewables and Exxon's leading role with GM, Toyota, and Renault in the development of low-emissions gasolines
• Open Spirit software ready for roll-out
  Open Spirit E & P software [120,870 bytes] The first petroleum industry software able to access a wide range of applications is expected to be commercially available this summer. Open Spirit E&P Component Framework software is being developed and marketed by Prismtech Ltd., Gateshead, U.K., which has already made pre-release versions of the software available to the Open Spirit alliance.
• Imports study
  The U.S. Commerce Department is conducting an inquiry, under Sect. 232 of the Trade Expansion Act, to determine if rising imports of crude and products threaten national security. Commerce Sec. William Daley has pledged to expedite the process and report to the White House by July 26. There's no suspense about the ultimate conclusion. Similar investigations in 1975, 1979, 1988, and 1995 found rising imports were a national security threat then, and U.S. dependence on foreign crude is even
• Phase 1 of Dabhol power project starts up
  India's watershed Dabhol power project has begun operations. The plant is near the city of Dabhol on India's western coast, about 150 km south of Mumbai (OGJ, Sept. 7, 1998, p. 44). Phase 1 of the Dabhol project has variable fuel capability but will be fired on naphtha until Phase 2 starts up. Phase 1 is owned by a joint venture comprising: Enron Corp. 50%, Maharashtra State Electricity Board (MSEB) 30%, Bechtel Enterprises Holdings Inc. 10%, and GE Capital Structured Finance Group 10%.
• Amazon gas fields to feed power generation
  An agreement in principle has paved the way for Petroleo Brazileiro SA to develop its gas reserves in the Amazon basin to support local power generation. A terms-of-commitment agreement was signed between Brazilian state firms Petrobras, Eletrobras, and Gaspetro, along with the state governments of Amazonas and Rondonia and the gas distributors for those states, Cigas and Rongas, respectively. The agreement defines the conditions for the Urucú natural gas thermoelectric generation
• INDUSTRY BRIEFS
  France's Ministry of Industry will eliminate the sale of leaded fuel in the country beginning January 2000. In its place, a superunleaded grade of gasoline will be sold for use in the estimated 3 million vehicles affected by the ban, as well as for boats, lawn mowers, and mopeds. The decision is in concert with European Union plans to reduce pollution (see story, p. 26). Total made a natural gas discovery

• The Mexican gas tariff
  Mexico's decision last month to eliminate a 4% tariff on imported natural gas is best seen as a welcome early step on a long road. The move might untether pipeline projects needed to ensure supply in the industrial states along the border with the U.S. But it doesn't herald the sort of sweeping privatization that Mexico's energy industries need.

• Drilling technology increasing Western Canada gas supply
  While the demand for Western Canadian Sedimentary Basin (WCSB) gas is set to grow in the coming years, the petroleum industry, aided by improvements in drilling, production, and exploration technology, is expected to meet this challenge. To ignore the impact technology has had, and will have, on natural gas supply, will inevitably lead to a dramatic under-evaluation of the resource base. Analysts have fallen into this trap before, most notably in the 1970s, which resulted in unfounded concerns.
• High court affirms coalbed methane leases
  In a major decision for gas companies, the U.S. Supreme Court has ruled that coalbed methane and coal reserves can be separately owned. The high court ruled 7-1 that private landowners, not the Southern Ute Tribe, own the coalbed methane reserves in the vicinity of the reservationin southern Colorado (OGJ, Jan. 25, 1999, p. 34). The tribe had estimated it might be owed $1 billion in royalties and interest.

• Ukrainian oil field NORM contamination examined
  A water-supply well was found to be a significant contributor to some of the high radiation levels of mineral scales found in oil well tubulars in northeastern Ukraine. In other cases the radiation was linked to lithological and geochemical properties of the aquifers in this area. The aquifer rocks are the source for the chemicals that form mineral deposits. In particular, the presence of uranium-bituminous aggregates determines the radiation levels and isotopic composition of mineral scale
• Shell-Texaco JV to sell two refineries
  Equilon Enterprises LLC has signed letters of intent to divest two of its Midwest U.S. refineries. The move is interesting in that it will focus Equilon's operations more on marketing than on refining, while doing the opposite for one of the buyers, Clark USA Inc. of St. Louis. Clark plans to buy Equilon's 295,000 b/d Wood River, Ill., plant, while Houston-based Frontier Oil Corp. wants its 110,000 b/d El Dorado, Kan., refinery. Together, the plants constitute about half of
• New EU fuel specs threaten 28 refineries
  New European Union (EU) fuel specifications due in place in 2005 threaten the future of 28 European refineries, of which 17 are candidates for closure. This is the view of The Petroleum Finance Co. (Petro Finance), Paris, which said the large majority of European refineries will have difficulties meeting the 2005 specifications with existing equipment.

• U.S. MTBE production at a record high in 1998
  Methyl tertiary butyl ether (MTBE) production by U.S. merchant and captive producers was at its highest level in 1998. Imports of MTBE into the U.S. were also at their highest levels in the past year. Offsetting high levels of production and imports were low MTBE prices throughout all of 1998. MTBE prices follow gasoline prices, and crude oil and gasoline prices were at a record low level during 1998. As crude oil and gasoline prices appear to be on the rise during the early months of 1999,
• Sasol, Chevron form global GTL partnership
  SouthAfrican coal and synthetic fuels conglomerate Sasol Ltd. has signed an agreement with U.S. major Chevron Corp. to create a global gas-to-liquids (GTL) technology joint venture. The alliance "will build on the technical strengths of each company in international upstream gas development and the production and marketing of GTL products," said the companies.

• Polystyrene industry in the midst of a down cycle
  The economic slowdown in Asia and Europe is having a devastating effect on the styrene-derivative market. During 1993-97, polystyrene demand grew nearly twice the rate of the world's gross domestic product (GDP). Expandable polystyrene (EPS) demand grew at three times the GDP. For the 1997-2003 period, however, the polystyrene demand growth is expected to fall to about 1.5 times the GDP, and the demand growth for EPS is expected to fall to about two times the GDP. Today, the polystyrene and
• Patterns of discovery in Australia: Part 2
  This is the second and concluding part of an article on patterns of discovery in Australian oil and gas exploration. Part 1, includings Figs. 1-10, appeared last week (OGJ, June 7, 1999, p. 37). In late 1972, the conservative coalition government of 23 years was replaced by the Whitlam Labor government (1972-75), which burst on the scene with a reform agenda. In 1973, the global price of oil soared (Fig. 8) when war in the Middle East led to the Arab oil embargo, but, in Australia, political
• Area Drilling
  Agip U.K. Ltd. let a contract for an undisclosed sum to Aker Geo, a unit of Oslo-based Aker Maritime AS, to carry out a seismic survey over recently awarded North Sea blocks. Aker chartered the just-launched CGG Alize survey ship to carry out the work, expected to take 1 month starting June 20. The assignment involves acquisitions and processing of 3D seismic data over 500 sq km on Agip's Block 8/19, 8/20, and 8/25 license areas. Much of the processing will be done aboard the vessel.

OGJ Newsletter

• OGJ Newsletter
  U.S. INDUSTRY SCOREBOARD 6/14 [48,802 bytes] Ethnic violence around the Nigerian oil town of Warri is threatening to make a sizable dent in the country's production. Shell and Chevron have been forced to halt maintenance work in nearby fields, and shut-ins loom. The clash comes only days after Olusegun Obasanjo, Nigeria's first democratically elected leader in 15 years, was sworn in and the government initiated a review of previous suspect contract awards (OGJ, June 7, 1999, p. 33).