Spills
Erika, a Maltese-registered tanker,
broke in half in stormy Atlantic seas Dec. 12 about 100 km off the northwestern coast of France and spilled 10,000-18,000 tonnes of heavy fuel oil. At presstime, a fuel oil slick was being blown at 2 km/hr by a northeastern wind in a southern direction parallel to and 40 km off the coast. Attempts to recover the oil have been unsuccessful. Two specialized French vessels are on the spot; French, British, and Norwegian vessels are expected to join the effort.
Refining
Six people were killed
in an explosion and fire late Dec. 2 at Thai Oil Co.'s Sri Racha refinery about 125 km southeast of Bangkok. The fire, which burned for 35 hr, consumed 40 million l. of fuel. Damages are estimated at 500 million baht ($12.5 million). Thai Oil could not say when operation of the refinery would resume, and the cause of the explosion was not yet established at presstime.
China's refineries
must stop producing leaded gasoline as of Jan. 1. About 90% of China's estimated 36 million tonnes of 1999 gasoline production was unleaded. And by July 1, 46 major cities in China had stopped selling leaded gasoline. A ban on the sale and consumption of leaded gasoline will be enforced starting July 1, 2000. China Petrochemical Corp. said it stopped producing leaded gasoline and 70-octane gasoline on July 1. The company will stop selling leaded gasoline at its retail outlets as of Jan. 1, 6 months ahead of the government deadline.
Clark USA Inc.,
St. Louis, was unable to reach an agreement on terms and conditions to purchase Equilon Enterprises LLC's 295,000 b/d Wood River, Ill., refinery and has discontinued negotiations with Equilon, a joint venture of Shell Oil Co. and Texaco Inc. (OGJ, June 14, 1999, p. 25).
Exports-imports
India's Reliance Petroleum Ltd.
(RPL) made the first products export from its newly operational, 27 million tonne/year refinery at Jamnagar, Gujarat. The international buyer of the 30,000-tonne cargo of naphtha was not identified, but company sources said RPL's product was bought on the spot market. RPL exported surplus naphtha after meeting its in-house requirements. Reliance group companies are expected to consume 20-30% of the total production volume of decontrolled products-including naphtha, reformate, propylene, kerosine, and petroleum coke-from RPL's refinery. RPL has begun testing global markets to sell its petroleum products.
Exploration
Mitsubishi Gas Chemical Co.
made an oil and gas discovery at Niigata, Japan. It drilled two wells on the prospect. The first, drilled jointly with Japan Petroleum Exploration Co., flowed 7 MMcfd of gas and 566 b/d of oil. A second well, drilled solely by Mitsubishi, flowed about 1 MMcfd of gas and a small quantity of oil. Mitsubishi said the discoveries are not near its producing oil and gas field at Niigata. Mitsubishi Gas Chemical uses production from that field as fuel for its Niigata petrochemical plant and intends to use the new production similarly.
Gabon
will launch its ninth upstream licensing round in second quarter 2000 as part of a plan to stem falling oil production in the country. The round will involve about 20 blocks covering areas onshore and in shallow and deep waters. Paul Toungui, Gabon's energy minister, said the country's oil output would fall from 365,000 b/d in 1998 to 302,000 b/d in 1999 due to the natural decline in its producing fields. A sharp drop in production from onshore Rabi Kounga field-from 220,000 b/d in 1998 to 140,000 b/d in 1999-is said to be the largest contributor to the projected decline.
Nineteen companies
submitted 47 bids to South Australia for eight exploration licenses in the Cooper-Eromanga basin. The bids will be evaluated on a work program basis; winners will be announced early in 2000. The blocks comprise the second phase of licensing following the expiry last February of prime Cooper basin acreage held by the Santos Ltd. group since 1954. The first phase of 11 blocks, on the fringe of the original Santos acreage, received $45 million (Aus.) in investment commitments from six firms over 5 years. The second-phase blocks-expected to receive more than $100 million-are much closer to producing oil and gas fields in the basin's core area. Eight additional blocks are to be offered in a third round later in 2000.
PTT Exploration & Production PLC
(PTTEP), a unit of Petroleum Authority of Thailand, made a natural gas discovery on Block 15A in the Gulf of Thailand. On test, Arthit 15-1X flowed 41 MMcfd of gas and 1,657 b/d of condensate from five zones. The well is the first of a seven-well campaign planned by a PTTEP-led consortium. Drilling confirmed the discovery of gas and condensate in 35 gas-bearing zones with a total thickness of 141 m. Operator PTTEP holds an 80% interest in the Arthit field project, which spans Blocks B14A, 15A, and 16A. PTTEP's partners are Unocal Thailand Ltd. (16%) and MOECO Thailand Co. (4%).
LNG
India's Petronet LNG
signed LNG marketing agreements with Gas Authority of India Ltd. (GAIL), Indian Oil Corp. (IOC), and Bharat Petroleum Corp. Ltd. (BPCL). The three firms had been vying separately to obtain the country's LNG marketing rights but reached a joint agreement instead. GAIL will be chief marketer at Petronet LNG's terminals at Dahej and Kochi, while IOC and BPCL will be subsidiary marketers in, respectively, the northern and southern regions. Petronet LNG will sell its LNG to the firms on a take-or-pay basis and will transfer its agreements with various power and fertilizer companies to the marketers.
Cogeneration
El Paso Merchant Energy Co.,
a unit of El Paso Energy Corp., Houston, acquired interests in 11 gas-fired power generation plants in California from Dynegy Inc., Houston, for $255 million. The plants have a combined generating capacity of about 370 Mw, net to El Paso. The deal includes Dynegy's California operating company and turbine maintenance organization.
Companies
Unocal Corp.
will merge its oil and gas exploration and production assets in the Permian and San Juan basins with Titan Exploration Inc. into a new company called Pure Energy Resources Inc. Unocal will hold 65% of Pure Energy, which will have about 50 million common shares outstanding. Titan stockholders will receive 0.4302 shares of Pure Energy for every Titan share. The new E&P company will have 175 million boe in reserves, on a pro forma basis, and net production of about 40,000 boe/d, Unocal said.
Kerr-McGee Corp.
plans to acquire the upstream UK North Sea operations from a unit of Repsol-YPF SA for $555 million. The sale of the assets-which comprise all of Repsol-YPF's UK North Sea holdings-is part of the state firm's $2.5 billion divestment strategy, it said. The acquisition will add 100 million boe of proven reserves and 30 million boe of probable reserves to Kerr-McGee's North Sea holdings while increasing its North Sea production by 30% to 130,000 b/d, Kerr-McGee said.
Reliant Energy,
Houston, increased its ownership interest to 52% from 40% in Dutch firm NV Energieproduktiebedrijf UNA for $490 million, acting on a plan it announced earlier this year to increase its ownership of the power generation company (OGJ, Oct. 18, 1999, p. 46). Reliant is to purchase the remaining 48% of the shares on Mar. 1, 2000. The total purchase price is about $2.3 billion.
Apache Canada
completed a $761 million (Can.) purchase of Shell Canada Ltd. assets in Western Canada (OGJ, Oct. 11, 1999, p. 46). Most of the properties contain conventional oil wells, but Apache says it will focus on natural gas. It plans to drill about 150 wells in 2000, 75% of them gas wells. Most drilling will be in Alberta in the Whitecourt and Swan Hills regions. The acquisition increases Apache Canada's oil and gas liquids production to 15,000 b/d from 2,700 b/d and will increase its gas production by 47%, adding 45.2 MMcfd.
Keppel Oil & Gas Services Pte.
(KOGS), a unit of Singapore's Keppel Fels Ltd., acquired an additional 5.4% of Singapore Petroleum Co. Ltd. (SPC), raising its interest to 30%. KOGS also signed a conditional agreement with Japan's Itochu Petroleum Co. to acquire another 5.4% of SPC. Under Singapore's takeover code, this purchase would mandate KOGS to make a general offer for the remaining shares of the listed SPC. SPC is a one-third interest partner in the 285,000 b/d Pulau Merlimau refinery operated by Singapore Refining Co.; BP Amoco PLC and Caltex Petroleum Corp. own the remaining interests.
MDU Resources Group Inc. unit
Prairielands Energy Marketing Inc., Bismarck, ND, and Preston Reynolds & Co. Inc., Denver, formed a natural gas marketing firm called Sage Gas Alliance LLC. Sage Gas will market gas supplies from the Rocky Mountain region-mainly Wyoming's Powder River basin, where Preston Reynolds has coalbed methane production and development interests. The new firm will bring a "unique marketing aspect to the coalbed methane development" due to its lack of ties to any specific pipeline or market, says Prairielands.
Pipelines
Petroleos de Venezuela SA
selected Pace Global Energy Services LLC to conduct a natural gas market study for the feasibility of a pipeline serving Margarita Island and the city of Cuman
Chevron Pipe Line Co. unit
West Texas Gulf Pipe Line Co. plans to begin northbound operation of its Wortham-to-Nederland, Tex., line section on Mar. 1, 2000. Work to reverse the Trinity booster station piping and to upgrade a number of mainline sections has been completed. The mounting need for imported oil by Midwestern refineries is the reason behind reversal of the line.
Guardian Pipeline project partners
filed an application with the US Federal Energy Regulatory Commission to construct, own, and operate their proposed 149-mile interstate natural gas line (OGJ, Mar. 29, 1999, p. 27). Guardian will transport gas from interconnections with Alliance Pipeline, Northern Border Pipeline, Midwestern Gas Transmission, and Natural Gas Pipeline of America near Joliet, Ill., to markets in northern Illinois and southern Wisconsin.
Florida Gas Transmission Co.
(FGT), a subsidiary of Citrus Corp., Houston, filed an application with FERC to expand its 4,800-mile natural gas transmission system by laying 231 miles of pipeline and adding about 90,000 hp of compression and associated facilities. Through the $438 million proposed Phase V expansion, FGT will provide about 400 MMcfd of incremental firm transportation service. Construction of Phase V will begin in March 2001. The project is slated for completion and will be placed into service by spring 2002.
Drilling-production
Western Canada gas producers
are expected to increase natural gas production in response to concerns that there will not be enough gas to fill new export pipeline capacity to the US, according to a study by Canadian Energy Research Institute. About 1.1 bcfd of pipeline capacity has been added in the past 2 years by additions to the Trans Canada PipeLines Ltd. and Northern Border Pipeline systems. The Alliance pipeline, slated to come on stream Oct. 1, 2000, will add another 1.3 bcfd. The study said investment by producers will increase production 3.1 bcfd, or 21%, by 2001 to about 17.8 bcfd, which is 400 MMcfd above CERI's estimates of total demand for Western Canadian gas in 2 years.
Gulf Canada Resources Ltd.
plans to develop Suban natural gas field in South Sumatra, Indonesia, and invited bids for mechanical, civil, and electrical work for installing facilities in the field, which is expected to produce 300 MMcfd of gas (OGJ, Mar. 29, 1999, p. 31). The field is on the Corridor Block production-sharing contract area and is part of a major gas development being undertaken by several international firms. The Suban development will include a gas plant, flow lines, gas and condensate transfer pipelines, and related infrastructure. Gulf Canada wants to appoint a single turnkey contractor to undertake the entire project.
Elf Exploration Inc.
began production from Virgo field in 345 m of water in the Gulf of Mexico (OGJ, Nov. 22, 1999, p. 68). The Virgo field covers four blocks located in the Viosca Knoll area off Louisiana. Production is expected to reach 23,000 boe/d at the beginning of 2001. Virgo interests are operator Elf, 64%; Coastal Oil & Gas Corp., 16.2%; Pogo Producing Co., 10.8%; and Nippon Oil & Gas Exploration USA, 9%.
The Libyan unit of Agip Gas BV
let a $100 million contract to Technip SA, Paris, for basic design and project management services on the Western Libya Gas Project (WLGP). WLGP involves development of the Wafa onshore gas field on Block NC169 and an offshore gas field on Block NC41 in 100 m of water and 190 km from Tripo* (OGJ, Aug. 2, 1999, p. 30). Contract components are: a fixed drilling and production platform and subsea clusters; a 10 billion cu m/year gas processing plant at Melitah; 34 and 10-in. subsea pipelines to Melitah; and 30 and 16-in. gas and liquids pipelines connecting onshore production to the Melitah plant. Including a 600-km export line to Sicily, the project is expected to cost $5.5 billion. First production is expected by late 2003.
