Table of Contents

• New tools extend deepwater well test, intervention capabilities
  Recent advances in control system and tool design address the challenges faced in testing and cleaning up deepwater wells. These advances reduce capital equipment costs, simplify operational management, and extend operating envelopes. Carrying out well testing or clean-up operations in deep water presents a number of challenges, particularly in regard to: Managing the hydrostatic head experienced at the seabed Requiring swift emergency disconnection when working from a dynamically positioned
• Condition monitoring compares, contrasts offshore equipment performance
  The application of model-based condition monitoring results in more effective maintenance scheduling by providing improved data for process operator and engineer analysis. These systems monitor key process equipment, such as gas turbines, pumps, and compressors. One such system is installed on A/S Norske Shell's operated Draugen production platform in the Norwegian sector of the North Sea and will be discussed in this article.
• Energy industry marks progress on Y2K bug solutions as more issues are raised
  Now less than 1 year away, the changeover to the Year 2000 continues to pose challenges for the petroleum industry. A recent analysis of the readiness of key oil-producing nations has revealed that their "customer" nations may find their oil supplies threatened if producers fail to fix their Year 2000 (Y2K) problems in time. To protect U.S. interests, says one information technology specialist, the U.S. should establish formal procedures for imparting information to other countries that may be
• Fourth quarter earnings dismal; diversity helped some firms
  Low oil prices and poor industry fundamentals led to dreary fourth quarter financial results for most energy companies. An asset portfolio that included a strong emphasis on natural gas and power helped cushion the blow, with firms that operate in everything from exploration through electricity generation faring better, in general, than vertically positioned companies. Losses for the quarter were common in many industry divisions, especially among independent firms in both the upstream and
• Petroleum industry pushes for compatible upstream software
  An alliance of petroleum companies, exploration contractors, and software vendors has stepped up efforts to develop a software specification that makes a wide range of upstream applications compatible. The Open Spirit framework software is anticipated to become the first implementation of the Petrotechnical Open System Corp. (POSC) standard, currently being developed across all sectors of the international oil and gas exploration and production industry.
• Earnings plummet for 1998's first 9 months
  A Look at 9 Months, Third Quarter Financial Results [415,933 bytes] A Look at 9 Months, Third Quarter Financial Results pg. 2 [394,685 bytes] Significantly lower oil prices for the first 9 months of 1998 resulted in a sharp decline in profits for a sampling of U.S. and Canadian oil and gas companies Oil & Gas Journal has surveyed. A drop in natural gas prices for the period, compared with the same period in 1997, also contributed to the decline in earnings.
• No pain, no gain for EU gas firms
  European Union gas companies can succeed in the forthcoming deregulated market, but not without changing both their structures and their cultures. This is the view of management consultant Pricewaterhouse Coopers, London, which polled 35 major gas supply, transportation, and distribution companies about their expectations for the EU gas business. The EU agreed to open roughly one third of the EU gas supply market to competition, much to the disappointment of the U.K., which liberalized its own
• INDUSTRY BRIEFS
  The cancellation of a drilling contract by a unit of Apache Corp. was incorrectly reported as being related to low oil prices (OGJ, Feb. 1, 1999, p. 30). Apache canceled the contract for drilling in the Gulf of Suez in late 1997 due to government restrictions on drilling in a shipping lane. An Apache official said the government reimbursed the firm for its expenditures. Venezuela's President-elect Hugo Ch vez's unsuccessful coup d'etat in 1992 was against President Carlos Andres

• The rest of the term
  Interior Sec. Bruce Babbitt shows the U.S. oil industry what life will be like in the last years of Bill Clinton's presidency. Unwilling as his boss is to acknowledge mistakes and make them right, Babbitt resorts to name-calling and counterattack. In defiance of Congress, his department's Minerals Management Service continues to push an oil royalty program that won't work. And Babbitt acts bitter toward the affected industry for the impasse, even accusing it of fraud.

• Shell eyes $8.5 billion Nigeria program
  Royal Dutch/Shell has begun talks with the government of Nigeria over a proposed $8.5 billion, 5-year oil and gas development program in that country. A Shell official told OGJ the company put forward development plans for a number of oil discoveries that are currently being appraised, with plans to utilize associated gas from these and other fields. Combined oil production from the new projects is expected to be 600,000 b/d.
• Low oil prices crimp deepwater drilling
  Extended low oil prices are beginning to affect the one sector of the oil industry that had, until now, remained fairly robust: deepwater drilling. This is the conclusion of Duff & Phelps Credit Rating Co. (DCR), Chicago, which says that cuts in exploration and development budgets are beginning to result in the cancellation of some drilling contracts and delays for some deepwater projects. In addition, industry consolidation-particularly among major integrated oil companies and large
• Closed-loop steerable drilling system tackles multiple targets
  This Hughes Christensen HCC TX445, 81/2-in. PDC bit has been specially designed for use with the rotary closed-loop drilling system. Empirical tests show that a long tandem gauge and a limited side-cutting action improve steerability (Fig. 3). A rotary steerable system penetrated a complex configuration of geologic targets, providing evidence that this technology may someday replace conventional geosteering technologies for many applications.
• IPAA: Price plunge threatens 2 million b/d
  The U.S. oil and gas industry has lost 41,000 jobs and shut in more than 136,000 oil wells and 57,000 gas wells since oil prices began dropping in November 1997, said Independent Petroleum Association of America. IPAA Pres. Gil Thurm said, "America's oil and natural gas production base is eroding. And if action is not taken immediately, the Y2K computer problem predicted in 2000 will look like a stroll in the park compared with what America will face without a functioning domestic oil and
• BLM suspends plugging rule for strippers
  The U.S. Bureau of Land Management will allow stripper well operators on federal lands to suspend operations without losing their leases. Interior Sec. Bruce Babbitt said, "This will help to alleviate the economic impact low oil prices may have on small federal stripper oil operations. We understand what the small operators are going through, and this is the right decision at the right time." BLM said that, in 1997, stripper wells (producing 15 b/d or less) accounted for 32%, or 37.4 million
• Babbitt's blooper
  Interior Sec. Bruce Babbitt has further soured his relations with the oil industry with his brash statements at a budget briefing. Oil-state legislators have blocked the Minerals Management Service from issuing its controversial oil royalty rule until June 1, in an attempt to force more MMS-industry negotiations (OGJ, Nov. 9, 1998, p. 36; Aug. 10, 1998, p. 26).
• Exxon: study might have identified Longford hazard
  An internal company report on the Longford, Vic., gas processing plant disaster, by Exxon Corp. has found that a detailed hazard operability study might have identified the hazard associated with low-temperature liquids in the bottom of the plant.

• Understanding ejector systems necessary to troubleshoot vacuum distillation
  A complete understanding of ejector system performance characteristics can reduce the time and expense associated with troubleshooting poor crude vacuum distillation unit (CVDU) performance. Variables that may negatively impact the ejector-system performance of vacuum-crude distillation units include utilities supply, corrosion and erosion, fouling, and process conditions. Table 1 [126,182 bytes] and Table 2 [127,553 bytes] are troubleshooting guides to ejector and condenser problems in
• Tosco, Union Carbide to form PP venture
  Independent refiner Tosco Corp., Stamford, Conn., and chemical giant Union Carbide Corp., Danbury, Conn., have signed a memorandum of understanding to create a 50-50 joint venture to produce and market polypropylene.
• Wingas starts new German gas import link
  Germany's Wingas joint venture, owned 65% by Wintershall AG, Kassel, and 35% by Russia's GAO Gazprom, began work on the second phase of the North Jagal pipeline. The Jamal Gas Anbindungsleiting (Jagal) gas network is being built to carry gas delivered from the Yamal region in western Siberia to customers in the former East Germany and to the main German gas grid. The North Jagal section will be a 336-km, 1,200-mm pipeline that extends southwest from the Polish border near Frankfurt an

• PC program developed for estimating pipeline drying time
  Equations box [273,114 bytes] Example problem data [74,304 bytes] A computer program has been developed that enables process engineers and designers to estimate the total drying time required for removing water from pipelines. The program (PIPE.DRY) determines the total amount of water to be removed from a pipeline and the total time required to dry the pipeline. It also estimates the volume of the desiccant and the size of the bed required for the operation.
• Search goes on for more light oil in western Newfoundland
  A light oil discovery in the first deep well drilled in western Newfoundland has sparked new interest in this prospective oil province of eastern North America. This article reviews the latest round of hydrocarbon exploration, including three exploration wells, and new models for structural trapping, reservoir development, and source rock maturation. Newfoundland's west coast lies in the Humber Zone1 of the Canadian Appalachians. Shallow wells drilled in the 19th and early 20th centuries on
• Area Drilling
  An Anadarko Petroleum Corp. group spudded its third Red Sea well, Edd 1, in mid-January on the Edd Block. The second well, Du Rig-Rig 1 on the Zula Block, was unsuccessful. TD is 2,200 m. The ministry awarded two tracts in the East Coast basin, which had its first two hydrocarbon finds in 1998.

OGJ Newsletter

• OGJ Newsletter
  Arthur Andersen and Cambridge Energy Research Associates (CERA) are laying responsibility for the current oil price climate squarely on the shoulders of reduced demand. In their annual joint report, World Oil Trends, the firms said, "The combination of improving technology and liberalizing investment regimes continued to boost oil supplies, but faltering economies in Asia led to a severe slowdown in world oil demand growth."