Table of Contents

• Monitoring And Education Help Seismic Crew Protect Environment In Transition-Zone Survey
  Surveyors in the Delta Wildlife Refuge discovered what is believed to be the first natural rookery for the highly endangered Mottled Duck. A program based on active monitoring and education helped Western Geophysical late last year complete a large speculative 3D seismic survey in a sensitive Louisiana transition zone without creating the need for environmental remediation.
• Crude Oil Greenhouse Gas Life Cycle Analysis Helps Assign Values For CO 2 Emissions Trading
  Emissions of carbon dioxide are already being assigned monetary values. For example, BP is trading CO 2 internally, and Suncor has bought CO 2 trading credits across the U.S.-Canada border. There is much other rising activity in the greenhouse gas trading game, even before any real formalizing of the Kyoto agreements has been achieved.
• Enzyme-Based Diesel Desulfurization Process Offers Energy, CO 2 Advantages
  Refiners faced with the dilemma of reducing the sulfur content of diesel fuel while also lowering carbon dioxide emissions may benefit from biodesulfurization (BDS), a proprietary process that uses enzymes to remove sulfur from petroleum. Biodesulfurization is expected to provide refineries a cost-effective method of meeting the new lower-sulfur standards while providing lower energy consumption and, thus, lower CO 2 . Recent studies show that energy requirements and CO 2 generation will be
• Camisea Case Study: Working With Environmental Concern
  On July 16, 1998, Shell Prospecting and Development Peru issued an unexpected announcement. Alongside Mobil, its partner, SPDP was withdrawing from Camisea, Peru, after more than $250 million had been invested in exploration, appraisal drilling, and engineering design over the previous 2 years. Although these two oil giants could not reach an agreement with the Peruvian government, managers involved in the project believe that the work they carried out in the region set a benchmark for
• Newfield balances experience, technology for success in the Gulf of Mexico region
  An initial exploration well drilled in late 1997 on East Cameron Block 287, next to Block 286, in the Gulf of Mexico found 125 ft of net gas pay in two sands. Operator Newfield Exploration Co. has since drilled four successful wells and installed a platform and production facilities on East Cameron 286/287 Blocks. Newfield expects production from the blocks to reach 30-35 MMcfed property during 1999. Photo courtesy of Newfield. Newfield Production Growth [71,875 bytes]
• Independents told to reorient in order to grow
  U.S. independent natural gas producers will have to reorient their businesses, bolster their returns on equity, and essentially regain control over the flow of their commodity to ensure a stronghold in the industry for the foreseeable future. This was at the core of a speech given last month by John E. Olson, senior vice-president of Sanders Morris Mundy's natural gas group to members of the Independent Petroleum Association of America (IPAA). Sanders Morris Mundy is a Houston brokerage
• No obituaries yet, says BP Amoco chief
  In his first major public speech as Chief Executive Officer of new supermajor BP Amoco plc, John Browne pointed out the dark clouds currently passing over the industry, but also a faint silver lining. "Because restructuring usually involves the elimination of duplication and downsizing," Browne told the Institute of Petroleum in London on Feb. 16, "it can easily create the impression that the industry is in decline. That's an illusion, but it is a perception that is dangerously widespread.
• INDUSTRY BRIEFS
  Solex Gas Liquids Ltd., Calgary, reported that the fire and explosions at its Taylor, B.C., natural gas liquids plant last month resulted from an accidental release of hydrocarbons (OGJ, Feb. 8, 1999, p. 34). Evidence indicates the release was caused by the mechanical failure of a piece of equipment engaged in routine operations and owned and operated by an independent contractor. The blast forced evacuation of Taylor and closed the Alaska Highway for 8 hr. Investigators are conducting a
• Ecuador's pinch
  Low oil prices are hurting oil-exporting nations, and Ecuador is a prime example. It posted its largest trade deficit ever last year, $957 million, due to double blows from El Ni?o and the collapse of world oil prices. In 1997, it had registered a $598 million surplus. For the first time since 1972, crude and products were no longer the country's largest source of export earnings, slipping to $825 million. They trailed behind bananas at $1.07 billion and shrimp at $852 million.

• Richardson's good month
  From the perspective of the U.S. oil and gas industry, it has been a good month for Energy Sec. Bill Richardson. It began with meetings in Saudi Arabia, after which Richardson described the types of projects the Saudis might open to participation by U.S. companies. The event was historic. However slowly, Saudi Arabia is reopening its oil and gas upstream to foreign investment.

• Ultradeepwater drillship spuds first well
  The Deepwater Pathfinder ultradeepwater drillship, owned by a venture of Conoco Inc. and R&B Falcon Corp., is shown drilling its first well, on the Magnolia prospect in the Garden Banks area of the Gulf of Mexico. Photo by Dean Gaddy. Conoco Inc.'s and R&B Falcon Corp.'s next-generation drillship, the Deepwater Pathfinder, spudded its first well Jan. 30 in the Gulf of Mexico. This is the second ultradeepwater ( 5,000 ft of water) drillship to enter the gulf fleet since the Glomar
• Penetration rates optimized by aligning torque and rotary speed
  Noble Drilling Corp.'s Tom Jobe, on location for Spirit 76 (a business unit of Unocal Corp.) in Mobile Bay, used a unique method for optimizing penetration rates and reducing drillstring failures by balancing rotary speed and torque parameters. Photo by Arno Op De Weegh The relationship between rotary speed and drilling torque can be used to optimize penetration rates while reducing drillstring failures.
• DOE acts to help producers through crisis
  The U.S. Department of Energy has offered to let U.S. oil companies store crude in the government's Strategic Petroleum Reserve (SPR). That program was one of five that DOE announced last week to help U.S. producers survive the oil price slump. DOE also is reopening its reservoir-class studies, offering grants to help small operators solve technological problems, demonstrating energy-saving oil field equipment, and launching an electronic-filing pilot project. Energy Sec. Bill Richardson
• U.S. to use royalty crude for SPR refill
  The U.S. Department of Energy will take 28 million bbl of federal royalty oil from the central Gulf of Mexico and store it in the Strategic Petroleum Reserve. Energy Sec. Bill Richardson said the SPR replenishment, which will begin about Apr. 10, was neither intended nor expected to raise the price of oil in the U.S. But Gil Thurm, Independent Petroleum Association of America president, said, "We hope the market will recognize the fact that there will be more oil off the market."
• IPAA urges tax relief for 50 b/d wells
  The Independent Petroleum Association of America has urged the U.S. Department of Interior to consider royalty reductions or other relief for all wells producing 50 b/d or less. "With oil prices now at record lows, wells producing 50 b/d are uneconomic. Royalties need to be reduced for these wells, otherwise they will be shut in or abandoned, further reducing domestic production," IPAA said.
• Lower 48 output falls to 50-year low
  U.S. Lower 48 oil production was 4.8 million b/d in January, the lowest in more than 50 years and down 6% from January 1998, the American Petroleum Institute said. Alaska, which accounts for a fifth of U.S. production, saw its output plunge 15% in January. API said that, over the past 4 years, Alaska's decline has averaged 5-8%/year, and the state's output now is more than 60% below its March 1988 peak of nearly 2.1 million b/d.

• Economic turmoil squeezing demand for big tankers
  Operators of very large crude carriers (VLCCs) and ultralarge crude carriers (ULCCs) will be hit in the near term by continued fleet expansion and lower demand in Asia. Ocean Shipping Consultants Ltd. (OSC), Chertsey, U.K., estimates that vessels more than 20 years old comprise 45% of the global fleet of VLCCs (200,000-300,000 dwt) and ULCCs (
• Petroleum markets' turmoil spawns tanker glut
  The vicious economics at work in crude-oil markets in 1998 and early 1999 are likely to be reflected in petroleum tanker markets by mid-1999 or early 2000. In 1998, crude-oil prices suffered from economic uncertainty and currency devaluations in Asia, Latin America, and Russia and from over production, especially among members of the Organization of Petroleum Exporting Countries (OPEC).

• Production log runs while perforating well
  To obtain virgin reservoir data, Mobil North Sea Ltd. ran a memory production log while perforating a horizontal development well. The well is in the Mobil-operated Nevis field, U.K. sector of the North Sea. Schlumberger Oilfield Services provided the logging and perforating services. The logging tools were installed below 250 ft of coiled tubing-conveyed perforating guns. Schlumberger believes this to be the first log recorded under these conditions. Previous runs of the memory production log

• Linear models help refiners develop RFG recipes
  Linear methods to predict TOX (toxic emissions), NO x (nitrogen oxides), and VOCs (volatile organic compounds) of a blend can help refiners calculate the likelihood that their blend recipes will meet requirements of Phases I and II complex models for reformulated gasoline (RFG). Multiple regression techniques to predict TOX, NO x , and VOCs are based on the following variables: Oxygenates content, wt % oxygen Reid vapor pressure (Rvp), psi Sulfur content, ppm Aromatics content, vol % Olefins
• Fighting back: Caltex launches food supermarket chain in Australia
  The petroleum industry has fired a broadside in response to the growing incursion into retail gasoline sales by supermarkets worldwide. Caltex Australia Ltd., one of Australia's top refiner-marketers, has launched a direct challenge to the country's supermarket chains by establishing its own supermarket food outlets. The company opened its first store at Bondi Beach, Sydney, this week.
• S. Africa to get new-design ester plant
  South Africa's Sasol Ltd. is to build an ethyl acetate plant based on a new alcohol-to-ester process developed by Kvaerner Process Technology, a unit of Kvaerner AS, Oslo. Kvaerner said Sasol Chemical Industries is to build a 50,000 metric ton/year ethyl acetate plant at its Secunda complex near Johannesburg that incorporates a patented process that requires an ethanol feedstock. This first license was signed after a 2-year development program at Kvaerner's Stockton-on-Tees, U.K.,

• MMS expects smaller U.S. gulf sale
  U.S. Minerals Management Service predicts the Mar. 17 Central Gulf of Mexico lease sale in New Orleans will be smaller than in previous years. MMS Deputy Director Tom Kitsos said, "We understand that the fall in world oil prices has affected the capital available for exploration and production in the U.S., and we anticipate a reduction in both the level of bidding and the number of companies participating in this upcoming lease sale."
• Play disaggregation reveals key Texas gas growth trends
  Play disaggregation has revealed important ultimate recovery growth trends for the major natural gas fields in Texas Railroad Commission Dist. 4 (RRC-4). Although significant growth and future potential were observed for the major fields, important ultimate recovery growth trends were masked by total, aggregated analysis based on a broad geological province.

OGJ Newsletter

• OGJ Newsletter
  With dated Brent crude oil trading below $10/bbl again, the oil price gains of January have evaporated, and the outlook for producers is bleak. This is the view of London's Centre for Global Energy Studies (CGES), which said oil inventories at the beginning of 1999 were sufficient to meet 92 days' worth of forward consumption-7 days more than in early 1998. "The outlook for prices has deteriorated," said CGES, "and will remain grim as long as the inventory overhang is not dealt with.
• Area Drilling
  Talisman Energy Inc., Calgary, reported progress in southern Sudan, where it holds 25% of three exploration and two development blocks covering a combined 12.2 million acres in the Muglad basin. Five fields-Heglig, Unity, El Toor, El Nar, and Toma South, are under development. Gross production of 150,000 b/d is to start in late 1999 for shipment via 932 mile, 28 in. pipeline to a marine terminal at Port Sudan.