Refining
Ruhr Oel GmbH, a joint venture of Veba Oel AG and Petroleos de Venezuela SA, signed a letter of intent to license Neste Engineering Oy`s Nexethers etherification process for Ruhr`s Gelsen- kirchen, Germany, refinery. Ruhr aims to produce 160,000 tons/year of mixed gasoline ethers beginning in 2001 as part of a program to improve gasoline quality to meet upcoming European Union fuel specifications. Neste Engineering, a unit of Finland`s Fortum Oil & Gas Oy, says the process is cost-effective because a methanol-recovery column is not required and feed-gasoline splitter requirements are flexible.
Power
Indian Oil Corp. (IOC) and Japan`s Mitsubishi Corp. signed a memorandum of understanding regarding construction of a $480 million, 500-MW power plant at Salvi, in western India`s Gujarat state. Each firm will hold a 26% interest in the project; the remaining 48% will be offered to public-sector groups, financial institutions, and project associates, according to IOC. Construction is expected to take 33 months, once the deal is closed. The project is based on vacuum residue fuel produced at IOC`s Gujarat refinery.
Enron International, a unit of Enron Corp., Houston, signed a 20-year power purchase agreement with the Palestine Electric Authority to supply electric power from a planned 136-MW combined-cycle plant in Palestine. Initially, the plant, to be built south of Gaza City in the Gaza Strip, will burn No. 2 fuel oil. Later, it will be converted to fire on natural gas, as it becomes available. The $140 million project is expected to be operating by mid-2000.
Enron Europe Ltd. signed a 20-year agreement to supply electric power to the Croatian state utility Hrvatska Elektroprivreda. Enron plans to build a 240-MW combined-cycle, gas-fired plant at Jertovec, north of Zagreb, at a cost of $175 million. Construction is due to begin in early 2000.
Courts
The Oklahoma Supreme Court denied Chevron Corp.`s petition for a rehearing of the court`s earlier decision that awarded Occidental Petroleum Corp. unit Oxy USA Inc. $742.2 million in a breach-of-contract case (OGJ, Mar. 15, 1999, p. 30). Chevron plans to petition the court`s ruling.
Exploration
Elf Aquitaine unit Elf Exploration Angola and Angola state oil firm Sonangol made another oil discovery on Block 17 off Angola (see map, OGJ, June 7, 1999, p. 33). Elf said the find opens up a new prospective area. On test, Tulipa-1, drilled in more than 1,000 m of water about 200 km northwest of Luanda, flowed 7,000 b/d of oil. The well is the fifth oil discovery on Block 17; the others are Girassol, Dalia, Lirio, and Rosa (OGJ, Sept. 7, 1998, News- letter). Elf is drilling another well on the block, Orquidea-1.
BHP Petroleum Pty. Ltd. disclosed test results for an appraisal well drilled near the Zamzama discovery well on the Dadu license area in southern Pakistan`s Sindh province. Zamzama-2 was drilled 3.5 km south of the discovery well to a total depth of 3,933 m. The well cut a combined gas column of more than 350 m in the Khadro and Pab formations. The well flowed at a maximum rate of 94.3 MMcfd of gas through an 80/64-in. choke at 2,940 psi flowing wellhead pressure. The well was completed for extended production testing and as a future producer. BHP and partners plan a rapid development of the find.
Petroleum Development Oman (PDO) disclosed an oil find in southern Oman that it says may be its most significant discovery in 5 years. Ghafeer-1 flowed more than 6,500 b/d of oil on test and confirms the presence of a major new hydrocarbon resource in South Oman. No reserves have been booked yet, but PDO did book reserves for recent and nearby discoveries Harweel and Sarmad at a combined 70 million bbl of oil. PDO says it has identified 30 more prospective structures in the area. The reservoirs are unusually deep, at about 4,500 m, and among the oldest oil-producing rocks in the world (OGJ, Apr. 6, 1998, p. 29).
LNG
Qatar`s Ras Laffan LNG Co. (Rasgas) began exporting liquefied natural gas from Doha for delivery to the Lake Charles, La., LNG import terminal of CMS Energy Corp., Dearborn, Mich. The shipment of 125,000 cu m of LNG is the first of two such scheduled deliveries; the next shipment will take place in August.
Drilling-production
A relief well is planned to aid in the control of the Thibodaux 2 natural gas well, about 2 miles southeast of Amelia, La., which blew out and caught fire when lightning struck it June 25. Operator Meridian Resource Corp., Houston, reported the well`s blowout preventer failed. The relief well, to be drilled 2,500 ft from the well to a depth of 18,000 ft, will take 45 days to drill. Meridian is dredging around the perimeters of both Thibodaux 2 and the relief well. It said no injuries or pollution occurred. Meridian owns about a 71% interest in the well; Burlington Resources Inc. and private investors own the remainder.
U.S. Minerals Management Service delayed until Aug. 16 a decision on whether to extend the suspension on seven oil companies` 40 leases off the central California coast (OGJ, June 22, 1998, p. 32). MMS suspended the leases in 1993, pending completion of a study due to be released later this summer.
Venoco Inc.`s Holly platform in the Santa Barbara Channel is back in production after fulfilling regulators` conditions to reduce incidents of gas venting and leaking. The 30-year-old platform, in state waters 20 miles north of Santa Barbara, Calif., was shut down Apr. 29 due to small but recurring natural gas leaks containing hydrogen sulfide (OGJ, May 10, 1999, p. 36). Venoco has since installed a gas-burning flare and performed minor repairs, including upgrading safety strategies. On June 14, the State Lands Commission ruled the company could resume production of about 5,000 b/d of oil and 5 MMcfd of gas.
The Hibernia consortium says it expects to increase production by 20% this fall at its Hibernia field platform off Newfoundland. The project has a production capacity of 150,000 b/d of oil, but that is expected to increase to 180,000 b/d when enhancements are made during a planned maintenance shutdown. Debottlenecking will be performed this fall and more difficult work in 2000, said the group. Production at Hibernia is expected to reach up to 250,000 b/d eventually, subject to regulatory approvals.
Global Offshore International Ltd., Houston, completed construction of the Banzala A platform and associated pipelines off the Cabinda enclave of Angola for Chevron Corp.`s Cabinda Gulf Oil Co. unit. Banzala field is expected to start production of about 30,000 b/d of oil in 2000. Global`s Comanche pipelay-derrick vessel installed the platform in 128 ft of water. Six pipelines of 8-12 in. diameter were also installed in about 200 ft of water. The pipelines have a total length of 23.5 miles and connect nine platforms in Banzala field.
Exports-imports
Canada`s National Energy Board approved the joint application by Imperial Oil Resources Ltd. and Boston Gas Co. to export natural gas from Sable Island off Nova Scotia to Massachusetts from Nov. 1, 1999, to Mar. 31, 2007 (OGJ, Feb. 8, 1999, p. 34). The contract is for the shipment of 42.5 MMcfd of gas, or about 115.1 bcf over the contract`s term, from St. Stephen, N.B., to Massachusetts markets.
Petrochemicals
An explosion and fire that occurred June 23 at Phillips Petroleum`s plastics plant at Pasadena, Tex., killed two contract workers, the company said. The explosion took place during maintenance at the Houston chemical complex`s K-resin facility. At presstime, the U.S. Occupational Safety and Health Administration was investigating the cause of the fire and assessing damage to the plant, which has been shut down.
The Borouge joint venture of Abu Dhabi National Oil Co. and Borealis AS, Copenhagen, let contract to Tecnimont SpA, Milan, for the construction of two polyethylene plants at Borouge`s Ruwais petrochemicals complex in Abu Dhabi. Each plant will have a production capacity of 225,000 metric tons/year; one will produce high-density polyethylene and the other linear low-density polyethylene. Start-up for both plants is expected in late 2001. Production will be used to meet the growing demand for polyethylene across the Asia-Pacific region.
Optimal Chemicals (Malaysia) Sdn. Bhd. let contract to the Malayisan unit of Bechtel for the design, procurement, and construction of units to produce butanol and its derivatives at Kerteh, Terengganu, Malaysia. Optimal Chemical is a joint venture of Malaysian national firm Petronas and Union Carbide Corp. The firm is building a world-scale petrochemicals complex on more than 200 acres. Construction of the butanol and derivatives units will begin in August, with operations scheduled to begin in mid-2001.
Emarati Investor Co. (EIC), Abu Dhabi, plans to build a plant to produce formaldehyde and its derivatives in Abu Dhabi`s Mussafah industrial area. The plant will have a capacity of 42,000 tons/year of formaldehyde and 57,000 tons/year of urea formaldehyde and other derivatives. About $11 million will be invested in the first phase of the project. Construction on the plant is slated to begin by yearend and take 20 months. Two more phases are planned, but no details have been released.
Companies
An Alberta court awarded sale of Blue Range Resources Corp., Calgary, to Canadian Natural Resources Ltd. (CNR), Calgary, for $235 million (Canadian). CNR was one of four bidders for Blue Range, which has been operating under court protection since it was taken over last December by Big Bear Exploration Ltd., Calgary (OGJ, June 28, 1999, p. 36).
Tuboscope Inc., Houston, and Newpark Resources Inc., Metairie, La., signed a definitive merger agreement valued at about $1.3 billion. According to the deal-which has been approved by both companies` boards-Newpark shareholders will receive 0.65 common share of Tuboscope for each of their shares, giving both shareholder groups 50% ownership of the new company. Tuboscope, the surviving company, will likely change its name in the near future, said the firm. The combined company will integrate Tuboscope`s solids control products with Newpark`s drilling fluid and waste disposal capabilities.
XCL-China Ltd., a unit of XCL Ltd., Lafayette, La., is trying to remove Apache Corp. unit Apache China LDC from its operator position on the Zhao Dong Block project in Bohai Bay (see map, OGJ, Nov. 30, 1998, p. 22). As chief reasons for the move, XCL alleged delays in developing C/D field, mismanagement of project costs, and delays in exploration drilling. Subsequently, Apache China filed a petition with U.S. Bankruptcy Court in Opelousas, La., requesting that XCL-China be placed in involuntary bankruptcy for failure to pay over $10 million in project costs. XCL and Apache each hold 24.5% interests in Zhao Dong; China National Oil & Gas Exploration & Development holds 51%.
Suez Lyonnaise des Eaux plans to acquire water treatment service firm Nalco Chemical Co., Naperville, Ill., for about $4.1 billion in cash. Through a tender offer, Suez Lyonnaise will purchase all of Nalco`s outstanding common shares. The transaction comes on the heels of Suez Lyonnaise`s announcement that it intends to purchase Pittsburgh-based Calgon Corp. Suez Lyonnaise will retain Naperville as the headquarters for the Nalco operations.
Range Resources Corp. and FirstEnergy Corp. signed a 50-50 joint venture agreement to combine their assets in the Appalachian basin. The joint venture will have collective proven reserves of about 450 bcfe, 90% of which will be natural gas and 67% of which are attributable to Range Resources. The partners also will own a combined 4,700 miles of gas gathering and transmission lines and 980,000 gross acres of leaseholds.
Kelley Oil & Gas Corp., Houston, changed its name to Contour Energy Co.
Gaz de France (GdF) acquired Ranger Oil Ltd.`s 17.5% share in Block 44/17-A in the U.K. North Sea for 250 million francs. The assets include two undeveloped fields-Errol and Mc- Adam-and ultimately adds to GdF`s recent purchases of the adjacent Murdoch, Calster, and Boulton gas fields.
Pipelines
A Nigerian pipeline blast on June 20 killed 15 people who were allegedly attempting to pilfer fuel from state-owned Pipelines & Products Marketing Co.`s Akute-Odo oil pipeline, according to local reports. The victims reportedly vandalized the line by puncturing a valve, which released more than 630 bbl of an unspecified liquid fuel.
Government
U.S. Federal Energy Regulatory Commission created a bureau, the Office of Energy Projects, which will issue certificates for gas pipeline and hydroelectric projects. It will include functions formerly exercised by FERC`s hydropower licensing and pipeline regulation offices. The Office of Markets, Tariffs, and Rates will be responsible for pipeline tariff and rate certifications.
Terminals
Giant Industries Inc., Scottsdale, Ariz., opened a 78,000 bbl product terminal east of Flagstaff, Ariz. The new terminal can load 10,000 b/d of product for distribution. Giant says it has entered into sales contracts with several companies and will shortly close on others. Along with opening of the terminal, and in a move to further improve its balance sheet, Giant will put up for sale about 25 "non-strategic" service stations and convenience stores in eastern Arizona, southern Colorado, and northern New Mexico.
