Exploration
Davis Petroleum Corp.,
Denver, and Questar Exploration & Production Co., a unit of Questar Corp., Salt Lake City, made a natural gas discovery in Galveston Bay about 30 miles south of Houston. On test, the ST 251-1 well, drilled to 16,087 ft, flowed 12 MMcfd of gas and 800 b/d of condensate through an 18/64-in. choke with 7,000 psi flowing tubing pressure. The well cut 108 net ft of potential gas pay, 33 ft of which is producing. Operator Davis holds 75% of the field, and Questar holds the remaining 25%.
Trinidad Exploration & Development Ltd.
(TED), a unit of Trans-Dominion Energy Corp., Calgary, received a joint license with Trinidad and Tobago state oil firm Petrotrin from Trinidad's Ministry of Energy for an exploration block covering 34,085 acres onshore and 8,127 acres offshore along Trinidad's southwestern peninsula. TED will hold a 72.5% stake and Petrotrin 27.5%.
Burlington Resources Inc.
and Poco Petroleums Ltd. confirmed their success in being awarded bids for two of the four parcels offered in the recent call for bids in the Mackenzie Delta area of the Northwest Territories (OGJ, Aug. 2, 1999, Newsletter). Burlington and Poco, through a 50-50 partnership, plan to spend $52 million over 5 years on exploration and development on the two parcels covering 360,000 gross acres.
Companies
Vista Energy Resources Inc.,
Midland, Tex., and Prize Energy Corp., Dallas, signed a definitive agreement to merge in a deal worth a reported $289 million in stock and assumed debt. Prize will become a wholly owned unit of Vista in exchange for about 58.2 million shares of Vista common stock and about 27.7 million shares of Series A 6% convertible preferred Vista stock, to be issued. The new firm, to be called Prize Energy Corp., will be based in Dallas, with operating offices in Midland and Victoria, Tex., and Elmore City, Okla.
EEX Corp.,
Houston, will acquire San Antonio-based Tesoro Petroleum Corp.'s US exploration and production operations for $216 million in cash. The properties, mainly natural gas fields in South Texas and along the Gulf Coast, produce about 80 MMcfd of natural gas from estimated proved reserves of 204 bcf. The deal includes about 157,000 net acres of nonproducing leasehold.
TransAmerican Energy Corp.
(TEC) and affiliated firms TransTexas Gas Corp. (TTG) and TransAmerican Refining Corp. (TARC) filed for protection under Chapter 11 of the US bankruptcy code. The units' primary holdings include TTG's 100% interest in a 200 MMcfd gas processing plant at Winnie, Tex., and TARC's noncontrolling equity interest in the 200,000 b/d Norco, La., refinery. TARC maintains a 30.4% interest in TCR Holding Corp., which owns a controlling equity interest in the entity that owns the refinery, Orion Refining Corp.
Reliant Energy,
Houston, completed the first phase of its acquisition of the Dutch power generation company NV Energieproduktiebedrijf UNA (UNA). In the first phase of the acquisition, Reliant purchased an initial 40% interest in UNA for about $775 million. The purchase price includes about $352 million in cash and a note for about $423 million. Reliant will increase its ownership interest to 52% by Dec. 1. The revised agreement calls for Reliant to purchase the remaining shares on Mar. 1, 2000. The total purchase price is about $2.4 billion.
Blue Dolphin Energy Co.,
Houston, will continue development of its proposed Petroport deepwater port project in the western Gulf of Mexico with Equilon Enterprises LLC, Houston, through a joint venture (OGJ, Nov. 9 ,1998, Newsletter). "Participation in development of the port project by a major industry participant such as Equilon confirms our belief in the need and potential of a deepwater port in the western Gulf of Mexico," said Michael Jacobson, Blue Dolphin president.
Repsol-YPF SA
plans to divest certain assets in the UK and Indonesia in an effort to raise at least $2.5 billion to fund its purchase of former Argentine state firm YPF. The divestment is in accord with the firm's focus on core assets in North Africa and Latin America, while working to reduce corporate debt below 40% by 2002. Included in the UK offering are its 25% holding in Harding field and its 33.3% holding in Buckland field, both in the North Sea. Repsol also intends to sell its UK network of service stations and its Harwich refinery. In Indonesia, Repsol will part with two exploration blocks and four production blocks, including its South East Sumatra fields. If the sale of these assets fails to progress satisfactorily by January, the firm plans to divest its Argentine Eg3 and Edenor units as well as its interest in Crescendo field in the US.
The Lukoil Petrol AD
unit of Russia's NK Lukoil acquired a 58% interest in Neftochin AD, Bulgaria's state-owned refining and petrochemicals firm. Lukoil paid $101 million cash, took on $260 million of government debt, and committed to invest $408 million to secure the deal. The main investment will be to upgrade Neftochin's refinery to enable it to produce cleaner fuels. Last year, Neftochin pro- cessed 108,000 b/d of oil to generate a turnover of $840 million. The deal was initiated by the Bulgarian Privatization Agency, which was advised by Arthur Andersen Corporate Finance and CA IB Investmentbank AG.
Gas processing
Global Energy & Refining Ltd.
(GER), Houston, signed contracts to build compression and cryogenic facilities with 150 MMcfd capacity and supply 12,000 b/d of NGL from a gas processing plant in Nigeria's Niger Delta. Dynegy Global Liquids Inc., Houston, will purchase and transport all liquids produced by GER during the next 5 years. Shell Nigeria Ltd. will supply GER for 20 years all associated gas produced from its Cawthorne Channel fields in Nigeria; the gas will be processed at GER's plant, and the NGL produced from the Shell gas stream will be transported through a 13-mile pipeline to a storage vessel on the Bonny River. Product delivery is to begin in midyear 2000.
Hanover Co.,
Houston, formed a joint venture operating firm with GER called Hanover Global Nigeria Ltd. to build and provide compression facilities of more than 20,000 hp capacity along with a 150 MMcfd cryogenic gas plant in Nigeria's Niger Delta (see preceding item). The project is slated to cost about $42 million; construction will begin immediately.
Drilling-production
Grant Prideco,
The Woodlands, Tex.; RTI Energy Systems Inc., Spring, Tex.; and Torch Drilling Services LLC, a unit of Torch Energy Advisors Inc., Houston, claimed the first commercial use of titanium drill pipe in a well. Torch Drilling drilled the curved section of a short-radius horizontal well in Greeley County, Kan., with a hybrid steel and titanium drill string. The bottomhole assembly combined four joints of 27/8-in. titanium-alloy upset pipe with a patented rotary-steerable, horizontal-drilling system.
A joint venture led by
YPF Ecuador Inc., a unit of Repsol-YPF, drilled a development well in Ginta field on Block 16, which covers 500,000 acres in eastern Ecuador's Oriente region. On test, Ginta B-4H flowed 17,750 b/d of oil and 550 b/d of water. The well, the first horizontal well in Ginta field, was drilled to 9,896 ft measured depth with 1,720 ft of lateral displacement and was completed in the C Member of the Napo M-1 sandstone. Joint-venture interests are: operator YPF Ecuador, 35%; Taiwan's Overseas Petroleum & Investment Corp., 31%; CMS Oil & Gas Co., a unit of CMS Energy Corp., Dearborn, Mich., 14%; and Murphy Ecuador Oil Co. and CANAM Offshore Ltd., both units of Murphy Oil Corp., El Dorado, Ark., each with 10%.
Denmark's Dansk Undergrunds Consortium
(DUC) plans to develop the recently discovered Halfdan reservoir, which has estimated reserves of 70 million bbl of oil. DUC comprises operator Maersk Olie & Gas AS, 39%; Royal Dutch/Shell, 46%; and Texaco Inc., 15%. Texaco said DUC is seeking development approval from the Danish Energy Agency, with a view to start drilling and construction work this year. DUC plans to install a small platform in the field, which would export oil to nearby Gorm field by pipeline. A total of nine development wells is planned to give a combined output of about 25,000 b/d. First oil is anticipated in early 2001, and the development cost is expected to be 1.5 billion kroner ($216 million).
Refining
Petroleos Mexicanos
let contract to Parsons Corp. for management services for a major expansion project at its Madero and Tula refineries in Mexico. Consulting firm Robert A. King Inc. and Mexican engineering firm Tecman will assist with the expansion program, which is expected to cost $1.7 billion. The revamp work is expected to take 3 years to complete and is part of a larger program by Pemex to expand capacity for handling heavy Maya crude and increasing output of cleaner fuels.
Petrochemicals
Stone & Webster Inc.,
Boston, began a major expansion of Copesul Ltda.'s ethylene complex at Triunfo, Brazil. The project will entail installation of a grassroots plant designed to produce 1 billion lb/year of ethylene. The original contract was awarded to Stone & Webster Engineering Corp. in December 1996. The plant produced specification ethylene on July 9, and the performance test is scheduled for October. Stone & Webster's involvement included the new ethylene plant, pyrolysis gasoline hydrotreater, butene-1 recovery system, waste water treatment unit, and 33-Mw gas-turbine power generation plant, as well as a new propylene recovery unit at the original plant. The project increases Copesul's production capacity for ethylene to 1.13 million tonnes/year from 685,000 tonnes/year.
United Engineers International,
a unit of Raytheon Engineers & Constructors, let contract to Foster Wheeler Corp. Fired Heater division (FWFH) for the supply of a large steam-methane reformer furnace. The contract is valued at more than $20 million. The furnace will be installed at Atlantic Methanol Production Cos.' new grassroots methanol plant on Bioko Island, Equatorial Guinea. The single-train plant will produce 2,500 tonnes/day of methanol from the synthesis gas produced in the reformer furnace. FWFH will provide the design, materials, fabrication, and delivery of the reformer unit. The unit will include the company's modularized Terrace-Wall reformer furnace and heat-recovery systems for the furnace flue gas, process gas waste heat recovery, steam drum, and related equipment. Delivery of the unit is slated for January 2000.
Nova Chemicals Corp.,
Calgary, acquired three polystyrene operations in England, France, and the Netherlands from Royal Dutch/Shell for $185 million plus $30 million in working capital. Nova also will acquire research facilities and a sales and marketing group. The purchase will make Nova Europe's second-largest polystyrene resins producer and give it an additional 760 million lb of polystyrene production capacity in Europe, it said. The firm expanded its market share in the field with the acquisition in 1998 of Salt Lake City-based Huntsman Corp.'s styrenics operations (OGJ, Aug. 3, 1998, p. 28).
Pipelines
China National Petroleum Corp.
completed construction of a natural gas pipeline in northwest China in late September. The 39 MMcfd, 146-km pipeline in Shaanxi province links Jingbian to Baoji via Xi'an and Xianyang. Construction began in March. The pipeline now moves gas produced from CNPC's Changqing gas field for local industrial and residential consumption. Changqing gas field, in the Ordos basin, has proven gas reserves of 310 billion cu m as of yearend 1998. CNPC plans to increase the field's proven gas reserves by another 120 billion cu m by 2003 and expects to expand the field's productive capacity by 1 billion cu m/year to a total of 2.2 billion cu m/year by yearend.
Units of Coastal Corp.
subsidiary ANR Pipeline Co., Detroit, agreed to collectively become 50% owners in Deepwater Holdings LLC. Deepwater owns High Island Offshore System LLC (HIOS), U-T Offshore System (UTOS), East Breaks Gathering Co. (EBG), Stingray Pipeline Co. LLC, and West Cameron Dehydration Co. LLC. Leviathan Gas Pipeline Partners LP owns the remaining interest. ANR subsidiaries originally owned 40% interest in both HIOS and EBG and a one-third interest in UTOS. The additional interests were acquired in a series of transactions with Leviathan and KN Energy's Natural Gas Pipeline Co. of America. Financial terms were not disclosed.
Amoco Canada Petroleum Co.,
Calgary, dropped plans to build part of an ethane pipeline through an area of aspen parkland near Rumsey, Alta. Environmentalists had opposed the project and praised Amoco for dropping its route application. The company said the line through the parkland was one of three routes under consideration. The 186-mile line will run from Empress, Alta., to a petrochemical plant at Joffre, in central Alberta.
Power
A group led by AES Corp.
began work on a $448 million, 826-Mw electric power generation project at San Nicolas, Argentina, about 250 km northwest of Buenos Aires. The AES Parana joint venture includes the combined-cycle, natural gas-fired plant, a transmission line, and a 16-km gas pipeline to feed the plant. Work is expected to be finished by late 2001. AES holds a 66% stake in the venture, while a unit of US Public Service Enterprise Group Inc. holds 33%. The power transmission line, to Brazil, would cost $0.5-1 billion and would have the capacity to transmit 700-1,500 Mw. AES is also mulling participating in the privatization of energy distributors in Santa Fe and Cordoba provinces.