Table of Contents

• Guidelines offered for choosing cryogenics or absorption for gas processing
  Poco Petroleums Ltd.'s O'Chiese gas plant in central Alberta added a 60-MMscfd enhanced absorption NGL-recovery unit. Worldwide, the gas-processing industry meets a variety of economic and recovery objectives. These range from simply meeting a gas-transportation specification to achieving extremely high ethane recovery for providing feed to an ethylene facility.
• East Texas gas plant improves efficiencies with operations analysis
  Union Pacific Resources' East Texas gas-processing plant achieved ambitious performance goals after an extensive review of its operations and maintenance. East Texas gas-plant personnel participated in every aspect of the analysis of plant procedures and practices. [33,038 bytes] In 1997 and 1998, Union Pacific Resource Co.'s East Texas plant at Carthage, Tex., achieved several historic performance milestones for its customers, producers, key investment partners, and stockholders.
• Williams presses power, petrochemical diversification strategy
  Tulsa-based integrated energy firm Williams has formed some innovative agreements that are furthering its diversification into the power and petrochemical sectors. In an arrangement that may prove to be an indicator of future trends, Williams has signed a fuel supply and power marketing agreement with AES Corp., Arlington, Va. Under this second such deal with AES, Williams will supply natural gas to the firm for use in an AES generation unit and will market the plant's electricity output.
• Japan pulling the plug on support for JNOC's E&D investments
  As if Japan's petroleum companies having to cope with the crushing downstream competition at home were not enough, Japan's government has recently agreed to pull the plug on continuing financial support for state-owned upstream company Japan National Oil Co. (JNOC). Unlike most foreign oil majors, which derive a significant proportion of their profits from exploration and development, Japanese E&D activity is minimal, making the domestic refining and retail markets the sole areas of
• Major energy distribution firms plan mergers
  Two major planned mergers have been announced that point to accelerating competition and consolidation in the natural gas, power, and energy services sectors. Sempra Energy and KN Energy Inc. have signed a definitive merger agreement that would form a major, integrated energy company with combined assets of $20 billion. Under terms of the deal, valued at $6 billion, KN will be merged into Sempra.
• Low oil prices squeeze Caspian Sea projects
  Investment in Caspian Sea oil and gas projects is likely to be delayed by low oil prices, but the region is still set to become a significant producer. This was the message presented at a London conference on Feb. 18 by Robert Priddle, executive director of the International Energy Agency. Priddle noted that, while recent disappointing Caspian Sea drilling results have inspired talk of downgrading reserves estimates for the region, "Keep in mind, however, that many dry holes were drilled in the
• Growth slows in independent power market
  The international market for independent power projects has grown during the past 12 months, although less so than it would have if not for the Asian financial crisis. This is the conclusion of Hagler Bailly Consulting, Arlington, Va., based on the results of its most recent semiannual survey of the international independent power (IIP) market. The growth of independent power projects is significant for the oil and gas industry, because so much of the projected additional power capacity they
• East-West Center: IPP systems fail to manage power supplies
  Much as utility or monopoly systems have failed to manage a country's electric power system effectively, the newer business model in the industry, known as independent power producers (IPPs), also has proven to be a failure. So says the East-West Center, Honolulu, in a recent report. Analyst Ronald E. Hagen says the term IPP is misleading, because the type of power supply system that has emerged in this decade is not truly independent but rather is based on long-term contracts for both fuel
• Shell, BP trim sails
  Royal Dutch/Shell and BP Amoco plc have furled their sails in anticipation that oil prices will stay becalmed at $10-11/bbl, with BP Amoco preparing for further reductions in its crew. Disclosing results for 1998, both blamed dramatically reduced income on low oil prices.
• INDUSTRY BRIEFS
  Ventech Process Equipment Inc., Pasadena, Tex., suspended the relocation of its Calgary refinery to Russia due to Russia's current economic crisis. Ventech, which acquired the refinery from Shell Canada Products Ltd. last year, expected to have completed the move in second half 1999 (OGJ, Sept. 7, 1998, p. 42). Ventech will maintain the facility at the current site. Enron Corp.

• Attention to oil supply
  Attention of the world oil industry fixes on supply this month as the Organization of Petroleum Exporting Countries meets to argue about cutting production. Yet output of crude oil everywhere else in the world is more interesting. Non-OPEC production has been the story of the 1990s. In the first half of the decade, the question was whether and how it could keep rising. Now, with everyone finally accustomed to steady increases in production from outside of OPEC, the gains seem likely to shrink,

• Norway reports massive development project cost overruns
  Many of Norway's offshore projects have been completed far over budget in the past 5 years, despite a push by operators to reduce development costs.
• Wintershall to develop first German North Sea field
  Wintershall AG, Kassel, plans to undertake the first offshore field development in the German sector of the North Sea. The A6/B4 gas find will be developed with a small platform tied back to the existing F-3 platform in the Dutch sector, from where gas will be exported through the Nogat pipeline to Den Helder, the Netherlands. Wintershall said the development would be the first on Germany's continental shelf area. More than 10 years ago, the Mittelplate oil field was developed in tidal
• BHP's Minerva gas field project marks progress
  The proposed $150-200 million (Australian) development of BHP Petroleum Pty. Ltd.'s Minerva natural gas field in the Otway basin off western Victoria has moved a step closer to reality with the publication of the project environmental impact assessment. The field contains proven reserves of 222.4 bcf and lies just 12 km off Port Campbell-an area well known for its tourist attractions, including the Twelve Apostles rock formations.
• Real-time geo-pressure analysis reduces drilling costs
  Equations [296,172 bytes] The improved understanding of subsurface pressures achieved through real-time geo-pressure analysis enabled Santa Fe Energy Resources to save over $ 1.8 million in direct drilling costs. Three practical case histories are examined in respect to the integration of measurement-while-drilling (MWD), seismic, and offset well data.
• Troll hull arrives amid North Sea start-ups
  Norsk Hydro AS has marked progress in the construction of a third platform for installation in Troll oil and gas field in the Norwegian North Sea. The 14,000 metric ton lower hull structure recently arrived from its construction yard in South Korea to the Umoe Oil & Gas AS fabrication yard at Haugesund, Norway, where topsides construction is nearing completion. Meanwhile, Norwegian state firm Statoil AS is preparing for sail-out of the Åsgard floating production ship (FPS) to the field in
• Seeking scapegoats
  Some U.S. producers think dismal oil prices are partially the result of market manipulation by foreign producers. Oklahoma Gov. Frank Keating recently told the National Governors Association foreign producers are dumping crude "considerably under the cost of production...with the avowed purpose of taking 1 million b/d off the U.S. market."
• Nippon-Mitsubishi merger speeds overhaul of Japanese refining-marketing industry
  This resid fluid catalytic cracking unit is part of the Hokkaido refinery complex operated by Idemitsu Kosan Co. Ltd., which is struggling under a huge debt load and thus is seen as the most likely target for the next wave of consolidation occurring in Japan's refining-marketing sector. Photo courtesy of Idemitsu Kosan. [72,038 bytes] Japanese Oil Firms' Rationalization Plans [62,428 bytes]

• Metal contents in crudes much lower than expected
  Figure 1 [137,050 bytes] Figure 2 [151,281 bytes] A study of crude oils imported into The Netherlands analyzed the quantity and the origins (whether indigenous or contaminants) of certain metals in the crude. This report shows that heavy metals' contents of crudes are much lower than previously assumed. Published literature in the late 1980s and early 1990s had already identified the source and quantity of metals emissions in The Netherlands. 1 2 Of those metals identified, only the lead
• Myanmar pipeline project hits major snag
  Plans to build an offshore/onshore natural gas pipeline in Myanmar have hit a snag after that country's prime minister ordered the scheme's configuration expanded to what project sponsors view as not commercially viable.
• NELSON-FARRAR COST INDEXES
  Copyright 1999 Oil & Gas Journal. All Rights Reserved.
• Yetagun pipeline, development work on track despite Thai delays
  The $570 million development of Myanmar's Yetagun offshore gas field and related pipeline projects are well on course in spite of Thailand's request for a delay in purchasing the gas (OGJ, Nov. 16, 1998, p. 27).
• Visualization facilitates large volume, complex 3D seismic interpretation
  Image 2 [38,357 bytes] A new visualization center in Houston allows explorationists to view and manipulate massive amounts of 3D seismic data, covering large geographic regions. Veritas DGC Inc. opened the center in December 1998. Veritas expects prestack depth migration of nonexclusive 3D seismic data for multiple clients to be one of the main activities at the center. This computing-intensive work will thus be less expensive than if each client did prestack depth migration by itself.
• Further growth lies ahead for South Texas Wilcox plays
  Ultimate recovery growth modeling by plays in Texas Railroad Commission Dist. 4 (RRC-4) has revealed significant growth for Wilcox natural gas plays. As a whole, major natural gas fields of RRC-4 are experiencing and hold future potential for ultimate recovery growth. However, important ultimate recovery growth trends are masked by such total, aggregated analysis.

OGJ Newsletter

• OGJ Newsletter
  Energy companies are continuing to refocus, restructure, and retrench as they seek shelter from an extended period of depressed demand and low prices (see stories, pp. 23, 27).
• Area Drilling
  Vintage Petroleum Inc., Tulsa, Okla., said its Bolivian reserves more than doubled in 1998 to 459 bcfe. Nupuco X-103, a new field discovery on the Chaco concession, cut 108 ft of net pay in Carboniferous San Telmo and flowed 13.5 MMcfd of gas and 140 b/d of condensate. CAOF is 84 MMcfd. NJL X-104 is a new field discovery in Devonian Lower Iquiri on the Naranjillos concession. It cut 74 ft of net pay and flowed 5 MMcfd of gas and 150 b/d of condensate. More zones of potential pay are behind pipe.