Exploration
Esso Exploration Angola Ltd.,
a unit of Exxon Corp., made another oil discovery on Block 15 in the Hungo area off Angola. The well, Chocalho, flowed at a test rate of 4,554 b/d and was drilled in 3,763 ft of water to a total depth of 8,245 ft. The well is the fifth oil discovery on Block 15; the others are Hungo, Kissanje, Marimba, and Dikanza. All five wells are located about 230 miles west of Luanda. Block 15 interest holders are: Esso, 40%; BP Exploration Angola Ltd., 26.67%; Agip Angola Ltd., 20%; and Statoil, 13.33%.
Anadarko Petroleum Corp.
signed an exploration agreement with Texaco Inc. that effectively doubles the Houston independent`s acreage in the Gulf of Mexico`s subsalt trend. Under the accord, Anadarko will acquire rights to future exploration on 82 blocks, covering about 400,000 gross acres off Louisiana, in which Texaco has an average working interest of 50%. Anadarko`s working interests in new prospects it generates will vary, depending upon Texaco`s partners in those blocks.
Kerr-McGee Corp.
unit Oryx NW Shelf Australia Energy Pty. Ltd. won the W98-13 exploration permit on the North West Shelf off Western Australia, as operator in 50-50 partnership with British Borneo Exploration Inc. The permit covers about 3.5 million acres in 500-9,000 ft of water.
Pipelines
Transportadora de Gas del Mercosur SA
(TGM) started construction on a $150 million, 437-km pipeline that will transport natural gas from Parana in Entre Rios state, Argentina, to Uruguaiana, Rio Grande do Sul, Brazil. The line, slated to start commercial operations in June 2000, will move 100 MMcfd from Argentina`s Neuquen basin via a tie-in to the Transportadora de Gas del Norte pipeline in Argentina. TGM capacity is expandable to 425 MMcfd. TGM owners are: CMS Energy Corp., Dearborn, Mich.; Trans- Canada PipeLines Ltd., Calgary; Cia. General de Combustibles SA and Techint SA, both of Buenos Aires; and Malaysian state oil firm Petronas. Techint is also the pipeline contractor.
Coastal Corp.
unit Wyoming Interstate Co. (WIC) accepted approval from the U.S. Federal Energy Regulatory Commission for its proposed Medicine Bow lateral, a 150-mile, 24-in. gas pipeline planned to deliver Powder River basin coalbed methane from the Fort Union gas gathering system near Glenrock, Wyo., to WIC`s main line west of Cheyenne (OGJ, Dec. 28, 1998, p. 30). Initial capacity will be 260 MMcfd, with plans to expand to 380 MMcfd by fourth quarter 2000.
Gas gathering
CMS Continental Natural Gas Inc.,
Tulsa, let contract to Okemah Construction Inc., Okemah, Okla., for construction of about 100 miles of the Northern Header gas gathering system to serve the Powder River basin of Wyoming and Montana. Construction started July 19, and the system has an in-service date of Nov. 1. It is designed to gather 256 MMcfd of coalbed methane and is expandable to 500 MMcfd with increased compression. The coalbed methane will be gathered near Gillette and Sheridan, Wyo., and in southern Montana for redelivery to the Fort Union gas gathering system and beyond. CMS Continental affiliate CMS Oil & Gas-both are units of CMS Energy-and partner Pennaco Energy Inc. hold about 580,000 acres of leases dedicated to the new system. CMS Continental also is seeking third-party Powder River gas supplies to sign up for the new system.
U.S. Federal Energy
Regulatory Commission
was asked to reconsider a June 30 ruling declaring that parts of Sea Robin Pipeline Co.`s gathering facilities in the Gulf of Mexico fall under its jurisdiction. Interstate Natural Gas Association of America requested the rehearing, saying FERC`s policy has been that offshore facilities are nonjurisdictional if they are located upstream of processing plants.
Companies
Cross Timbers Oil Co.
agreed to purchase Ocean Energy Inc.`s Arkoma basin working interests in Arkansas and Oklahoma for about $235.3 million. Ocean Energy plans to cancel its recently announced royalty trust offering because some of the properties dedicated to the trust are included in the sale to Cross Timbers (OGJ, July 26, 1999, p. 46). A Cross Timbers official says the firm has identified 65 drilling locations, 30 well completion opportunities, and "a handful" of recompletion targets on the properties.
Newfield Exploration Co.,
Houston, agreed to buy Ocean Energy`s working interest in three Gulf of Mexico shelf fields for $66 million.
St. Mary Land & Exploration Co.,
Denver, agreed to acquire King Ranch Energy Inc. (KRE) in a merger in which St. Mary will issue 2,666,252 common shares to shareholders of King Ranch Inc. KRE`s properties are located primarily in the Gulf of Mexico and onshore Gulf Coast. KRE has no debt to be assumed and will become a wholly owned subsidiary of St. Mary. KRE`s production for 1998 was 48.8 MMcfd, and its reserves are 82% natural gas.
Power
Duke Energy International LLC,
a unit of Duke Energy Corp., Charlotte, agreed to buy Dominion Resources Inc.`s Latin American power generation business portfolio for $405 million. The package totals about 1,200 MW of gross generation capacity fired by natural gas, diesel, and hydro in Argentina, Belize, Bolivia, and Peru. Richmond-based Dominion, facing a merger with Consolidated Natural Gas Co., Pittsburgh, wants to focus on future growth in the U.S. Midwest and Northeast energy markets.
Duke Energy International,
with a $680 million bid, acquired controlling interest in the newly privatized Brazilian electric power generating firm Cia. de Geracao de Energia Electrica Paranapanema. Located in Sao Paulo state with a total installed capacity of 2,307 MW, Paranapanema is the second Brazilian main electricity producer that the country has privatized.
Duke Energy North America
will begin simultaneous construction this month of two 640-MW natural gas-fired merchant peaking power plants, one each in Butler County, Ohio, and Vermillion County, Ind. Both are scheduled for start-up in summer 2000. The projects are intended to help alleviate persistent shortfalls of electricity in the U.S. Midwest during the summer.
Colombian power firms
let two contracts to GE Power Systems and Parsons Group International Ltd. totaling almost $200 million to supply equipment and services for the expansion of two gas-fired power plants in Colombia. Las Empresas Publicas de Medellin ESP, Medellin, let a $125 million contract for expansion of the Cental Termoelectrica La Sierra power plant in the Central Magdalena Valley. GE will supply a 180-MW steam turbine-generator package to convert the plant to combined-cycle operations, with commercial start-up slated for November 2000. Isagen SA ESP, also of Medellin, let a $73 million contract to convert the Termocentro gas-fired plant to combined-cycle operation with the installation of a 100-MW steam turbine-generator set. It is slated for commercial start-up in October 2000.
Oneok Inc.,
Tulsa, plans to build a $90 million, 300-MW natural gas-fired merchant power plant in Logan County, Okla., 10 miles northwest of Oklahoma City. It is the gas utility`s first electric power venture. Construction is to begin next summer, with start-up targeted for June 2001.
Cogeneration
Primary Energy Inc.,
Whiting, Ind., a subsidiary of NiSource Inc., and BP Amoco plc signed a definitive agreement to develop, engineer, and construct a natural gas-fired cogeneration plant at BP Amoco`s Whiting refinery. It will produce steam and generate 525 MW of power. The project cost is about $250 million, and construction is scheduled to begin this year. Start-up of the plant is expected in second quarter 2001. Primary Energy will be responsible for operation and maintenance of the plant and related equipment.
Financing
Pemex Finance,
a unit of Mexican state oil company Petroleos Mexicanos, issued $1.45 billion in bonds secured by future heavy sour crude oil export revenues. Pemex Finance has issued more than $4 billion worth of such bonds since late 1998 under its current program. The issue was bolstered by a recent upsurge in Maya crude oil prices and by additional long-term supply contracts, the most recent of which is a 5-year deal Pemex signed with Marathon-Ashland Petroleum LLC for the purchase of 90,000 b/d of Maya crude beginning in mid-2001.
Drilling-production
Cabinda Gulf Oil Co.,
a unit of Chevron Corp., began crude oil production from Banzala oil field on Block O about 12 miles off the Cabinda enclave of Angola. Banzala came on stream on time and under budget, said Cabinda Gulf. Production reached 7,500 b/d of oil from the first three wells and is expected to increase to 25,000 b/d after five more wells are brought on line. Crude from Banzala is shipped to Cabinda`s Malongo terminal via pipeline (OGJ, July 5, 1999, p. 38). Block O interest holders are: operator Chevron, 39.2%; Angola state oil firm Sonangol, 41%; Elf Petroleum Angola, 10%; and Agip Angola Ltd., 9.8%.
Amerada Hess AS
began oil production from South Arne field on Blocks 5604/29 and 5604/30 off Denmark. The first well flowed at 7,000 b/d, and the operator expects to bring a total of seven wells on stream, five of which were predrilled. The field was developed with a production platform with capacity to process 50,000 b/d of oil and 70 MMcfdof gas. The field has estimated reserves of 60 million bbl of oil and 80 bcf of gas (OGJ, Sept. 2, 1996, p. 32). License partners are: operator Amerada Hess, 57.5%; Dansk Olie & Naturgas AS, 34.3%; Denerco Oil AS, 6.6%; and Danoil Exploration AS, 1.6%.
BG plc
is studying development options for its Blake oil discovery in the Outer Moray Forth area of the U.K. North Sea, with a view to submitting a field development plan by yearend. One option is a subsea development tied back to Block 13/28a Ross field, which is operated by Talisman Energy (U.K.) Ltd. The operator said initial development plans will concentrate on the drainage of a reservoir with estimated reserves of 50-75 million bbl of light oil: "There is also the potential to develop significant additional volumes outside the main reservoir." The 13/24b-3 discovery well was drilled in March 1997 and flowed 2,600 b/d of sweet 32° gravity crude oil through a 40/64-in. choke. Three appraisal wells were drilled on Block 13/24 in 1998, one of which flowed 4,000 b/d on test.
UTE Santa Cruz II
oil and natural gas venture-comprising operator Perez Companc SA, 37.8%; Astra Capsa, 32.2%; and Repsol-YPF SA, 30%-secured a 25-year concesson from Argentina`s Energy and Ports Secretariat to explore for and produce oil and gas on An Aike Block in Argentina`s southern Austral basin. The partners will submit a development and investment proposal in the next few months but are already planning to drill nearly 30 wells in the next few years in the Santa Cruz II area, which covers the Maria Ines, Barda Las Vegas, and An Aike blocks. The drilling program is part of a $110 million project to increase gas output and field infrastructure.
Bayu-Undan Joint Venture
participants signed unitization and unit operating agreements and plan to submit a final development plan for the Bayu-Undan liquids project by yearend to the Joint Authority for the Timor Sea Zone of Cooperation jointly administered by Australia and Indonesia, reported JV participant Kerr-McGee Corp. The project, which covers ZOCA 91-12 and 91-13 licenses, calls for development of 400 million bbl of condensate and natural gas liquids while the fields` associated gas is reinjected pending market need. It recently encountered a series of delays (OGJ, May 3, 1999, p. 50).
U.S. Minerals Management Service
issued a final rule allowing it to require oil and gas companies bidding on Outer Continental Shelf leases to submit their initial bonus bid payments via electronic funds transfer. MMS requires firms to pay the rest of the bonus payment and the first year rental payment electronically.
LNG
India`s
Dabhol Power Co. venture, in which Enron Corp. is the lead partner, let a $240 million turnkey contract to Kvaerner AS, Oslo, to design and build a liquefied natural gas receiving terminal. The terminal will be built at Dabhol, 150 km south of Mumbai, and will supply regasified LNG to a power station recently brought into operation there. Work will involve: fitting out a new offloading jetty with mechanized LNG unloading arms; installing insulated supply pipelines extending 2 km from the jetty head to a storage and processing area closer to the power station; and building an LNG storage and processing area, consisting of three concrete and steel-insulated storage tanks, each with capacity of 160,000 cu m, plus vaporization and process facilities.
Petrochemicals
OPP Petroquimica SA
announced the start-up of a Brazilian polyethylene plant based on Montell Polyolefins BV`s Spherilene process. The new plant was built at Triunfo and is operated under a license from Montell. The plant has capacity to produce 260,000 metric tons/ year of high-density and linear low-density polyethylene. Montell said the unit is the world`s largest Spheriline process plant.
Refining
Sunoco Inc.
restarted a 28,000 b/d Unifiner unit shut down as a result of a June 21 fire (OGJ, July 12, 1999, p. 35). The outage had forced Sunoco to buy diesel to meet customer demand.
Alternate fuels
Southern States Power Co.,
Shreveport, La., reached a production agreement with Nopec Corp. that will make available immediately up to 4 million gal of biodiesel fuel for distribution in California through a custom processing arrangement, with an option to expand that supply capability to 8 million gal. SSPC has established a fuel distribution facility with biodiesel storage tanks in San Bernardino, Calif.