Table of Contents

• World oil supply-what goes up must come down, but when will it peak?
  The universe is made up of cycles. Everything that is born will die: stars, days, species, humans, and civilizations. A stone thrown into the air follows a parabolic trajectory. If its velocity is more than 11 km/sec it will leave the gravitational field of the earth but will become part of the solar system, returning on an elliptic orbit. What goes up must come down. The question is: when will it peak? King Hubbert, in his famous paper of 1956, 1
• Comparing Russian, Western major oil firms underscores problems unique to Russian oil
  Reserves, Oil Production, Exports [175,503 bytes] 1997 Financial Performance [64,394 bytes] Debt Status [61,609 bytes] Market Capitalization, Reserves [109,143 bytes] Operating Efficiency [87,388 bytes] This second of two parts provides an analysis of four Russian vertically integrated companies (VICs) and compares their performance on key operational parameters with their Western counterparts. The four companies-Lukoil, Yukos, Sidanco, and Surgut-represent some of the largest players in
• Exxon-Mobil faces Europe monopoly questions
  If Exxon Corp. and Mobil Corp. merge as planned, the combined companies will have the largest upstream portfolio in Europe and may face downstream monopoly questions from European authorities. This is the view of Wood Mackenzie Consultants Ltd., Edinburgh, which said the combined reserves base of Exxon and Mobil in Europe amounts to more than 8.7 billion boe.
• Snyder and Santa Fe agree to form $1 billion company
  Santa Fe, Snyder Combined Operations [93,834 bytes] Fort Worth's Snyder Oil Corp. and Houston's Santa Fe Energy Resources have revealed some of the details and expected benefits of their planned merger (OGJ, Jan. 18, 1999, Newsletter). The two independents signed a definitive agreement to form an independent exploration and production company with a market capitalization of more than $1 billion. The new firm, called Santa Fe Snyder Corp., will combine Snyder's strong position in the
• Waiting game
  It's still unclear what the Clinton administration will propose to help U.S. producers survive the depression. U.S. Energy Sec. Bill Richardson has been examining a laundry list of proposals for more than a month to determine what is doable, both politically and economically. Action was expected in January (OGJ, Jan. 11, 1999, p. 24). But now February is here, and Richardson presumably is focused on his trip to Saudi Arabia this week.
• EIA says U.S. gas mergers growing
  The value of U.S. gas industry mergers and acquisitions has risen nearly fourfold this decade, to $39 billion in 1997 from $10.4 billion in 1990, the U.S. Energy Information Administration reports. The increase parallels a surge in corporate combinations (mergers, acquisitions, joint ventures, and strategic alliances) across the U.S. energy sector, from $21.4 billion in 1990 to $106.4 billion in 1997, and then-with the announcement of such blockbuster mergers as British Petroleum plc with Amoco
• Italian energy sector faces possible huge carbon taxes
  Italy's energy sector is the latest in Europe to face a possible massive "carbon tax" designed to cope with postulated catastrophic global warming. Late last year, the Italian ministers of industry and the environment announced at a summit on energy a 5-year, 100 trillion lira ($57 billion) program to implement a carbon tax and revamp the energy sector. This is in accordance with the Kyoto climate change agreement, under which Italy is to cut emissions of greenhouse gases by 6.5% from 1990
• Renewables immune
  In previous periods of sustained low oil prices, the drift to power generation using alternate fuels has been slowed by the cheapness of oil. In Europe this time around, however, with oil prices at their lowest in at least 12 years and expected to remain low, oil field developments are being stalled-yet there is no apparent slowdown in the rise of renewables. Alan Weekes, environmental engineer at Arbre Ltd., Leeds, puts the reasons for this in the U.K. quite bluntly: "If you hold an NFFO
• INDUSTRY BRIEFS
  The inset maps for the Campos and Espirito Santo basins were transposed on the map of Brazil's exploration acreage offering (OGJ, Jan. 25, 1999, p. 39). BP Australia

• What's structural?
  Is the current slump in oil prices structural? Everyone in the oil and gas industry wants to know. The market crisis might indeed have structural dimensions, which is not to say that prices will stay at current levels, or any level, forever. Structural effects depend on how key market participants respond. Prices are low for good reasons. When those reasons no longer apply, prices will rise unless new reasons emerge for them to stay low. And no one should doubt that current prices are too low.

• Drilling contract terminations mushroom
  Contract drillers have experienced a spate of early contract terminations in recent weeks, accelerating the financial deterioration of the oil field service/ supply sector. The cancellations were driven by extended low oil prices in many cases and by mechanical difficulties in others. Among those thought to be related to low oil prices were: Apache Corp. unit Apache Darag Corp. terminated a drilling contract with Santa Fe International Corp., Dallas, for drilling in the Gulf of Suez. Occidental
• Unocal details offshore Indonesia drilling results
  Unocal Corp. has revealed the results of its continuing development drilling program in the deepwater Seno structure off East Kalimantan, Indonesia. Undaunted by low oil prices, the company has decided to pursue fast-track development of West Seno oil and gas field. Unocal Indonesia Co. and partner Mobil Makassar Inc. expect to submit a detailed development plan to state firm Pertamina early in the second quarter. West Seno is the first deepwater field the partners will develop off East
• Alternative methods clean up filter cake
  Cracks produced by hypochlorite on a polymer carbonate filter cake resulted in the development of high permeability for this sample (Fig. 1). New investigations into breaker-based and physical flow-back methods provide further insights into the principles of breaching filter cakes, allowing for less restricted pathways needed to increase well productivity. This is the second in a two-part series that began Jan. 25, p. 91.

• NMR-derived permeability aids frac design
  Nuclear magnetic resonance logging (NMR) provides an accurate and continuous permeability measurement that is timely enough for use in hydraulic fracturing design prior to completing a well. An accurate estimate of in situ formation permeability can lead to cost savings and production increases in wells requiring hydraulic-fracturing stimulation. The cost savings and increased profitability can far exceed the cost of acquiring this reservoir description information. The measured permeability is
• Italy boasts Europe's 'cleanest' gasoline following huge outlays
  Italy boasts the "cleanest" gasoline in Europe, following a 13.3 trillion lira ($8 billion) investment program by refiners in 1990-97. And refiners will have to spend another 9.4 trillion lira in 1998-2005 to comply with tightening domestic regulations, the Kyoto climate change treaty, and the European Auto-Oil program. In 2005, Italy, along with the rest of the European Union, will have to reduce sulfur in gasoline to 30 ppm and benzene levels in gasoline to 1 vol %. Carbon dioxide emissions

• Temperature and gamma scans identify problems in crude tower
  Using temperature profiles and gamma scans with traditional data-collection methods (that is, operating data and physical inspections) helps to reliably detect and identify the cause of maldistribution in fractionation towers. In 1994, the use of temperature profiles and gamma scans shortened the downtime for the vacuum-distillation tower of Pdvsa's El Palito, Venezuela, refinery by more than 50%. In 1991, similar damage took 12 days to repair while the unit was offline; however, in 1994,
• NELSON-FARRAR COST INDEXES
  Copyright 1999 Oil & Gas Journal. All Rights Reserved.

• U.K. nitrogen-removal plant starts up
  The gas-treatment plant at Connah's Quay, North Wales, U.K., is dominated by a view of the cold boxes, ground flare, and compressor house. Connah's Quay Gas Treatment Plant The £40 million natural-gas-treatment plant at Connah's Quay, North Wales, U.K., and owned and operated by the U.K. utility PowerGen, started up in November 1997. It processes up to 200 MMscfd of natural gas, reducing sulfur compounds and rejecting sufficient nitrogen to make the sales gas suitable for
• Nearby finds brighten outlook for Equatorial Guinea and Namibia
  Equatorial Guinea and Namibia are situated on the northern and southern ends of the West African deepwater play fairway. Between them lie the prolific petroleum provinces of offshore Gabon, Cabinda, Congo, and northern Angola ( Fig. 1 [169,872 bytes] ). The Atlantic margins of Equatorial Guinea and Namibia share a common geological setting and tectono-stratigraphic evolution with these provinces, leading to an expectation that they may also hold the ingredients required for deepwater

OGJ Newsletter

• OGJ Newsletter
  U.S. INDUSTRY SCOREBOARD 2/1 [44,068 bytes] Cold weather in North America and strong refiner crude purchases in the Far East have strengthened oil prices, but the rally cannot last, because market fundamentals are too weak. So says London's Centre for Global Energy Studies (CGES), which believes further oil production cuts of 1 million b/d are needed from OPEC. The analyst said such further cutbacks would lead to a recovery of dated Brent crude prices to an average $15/bbl in the fourth