Correction
The timescale shown in Fig. 1 in the article on renewable energy in OGJ's special issue, Petroleum in the 21st Century, should extend from 1990 to 2025 in 5-year increments. An artist's error shows each year in the timescale as 1990 (OGJ, Dec. 13, 1999, p. 128).
Futures
Members of London's
International Petroleum Exchange (IPE) voted unanimously to demutualize the exchange and convert it to a commercial company. The decision follows failed bids by IPE's board to convert the exchange into a for-profit venture (OGJ, Aug. 9, 1999, p. 26). Shares in the new company, IPE Holdings PLC, will be allocated to its members proportionately to the number and type of seats they own. Completion is set for Apr. 3.
Drilling-production
Veba Oil Nederland BV
let contract to Coflexip Stena Offshore for pipelay and associated subsea construction of its Hanze development on Block F2 in the Dutch North Sea. Hanze development will involve the use of a production storage platform, a dedicated oil offloading system, and a gas export line to the main flowline. From Hanze platform, Coflexip will install a 16-in. steel oil export flowline, an export tanker mooring-loading system, a flexible 4-in. export flowline, and two control umbilicals.
Unocal Thailand Ltd.
let a $2.4 million contract to Smedvig ASA, Stavanger, for its 100% owned, self-erecting T-4 tender rig. The 90-day contract will begin in mid-February and is a continuation of an existing drilling contract. Unocal also has five 30-day options.
Operators of the Hibernia
production platform on the Grand Banks off Newfoundland received regulatory approval to increase oil production to 180,000 b/d from 150,000 b/d. Hibernia Management & Development Co. also received preliminary approval to increase production to 200,000 b/d after equipment modifications are completed in March. Hibernia received the green light to boost daily production but still must gain approval to increase annual production to 66 million bbl from the current 49.5 million bbl. Hibernia contractor AOC Brown & Root Canada Ltd. announced the layoff of 25 workers on the platform.
BG Exploration & Production Ltd.
was fined £300,000 by the UK's Kingston-upon-Hull Crown Court after pleading guilty to breaches of safety regulations related to a 1998 platform natural gas leak. The UK Health and Safety Executive (HSE) prosecuted the case following a 1998 incident in which a large volume of gas was involuntarily released from a leak in a pipework joint at the company's Rough 47/3B gas platform in the UK North Sea. HSE's investigation cited numerous management deficiencies, including improper joint installation and leak tesing, poor overall management of the incident, and failure to report the event to HSE.
Conoco Inc.
unit Conoco (UK) Gama Ltd. acquired a 30% working interest from Japan Vietnam Petroleum Co.-a Nippon Mitsubishi Oil Corp.-led group-in Block 15-2 in the Cuu Long basin off Viet Nam. Block 15-2 is producing about 35,000 b/d of oil from Rang Dong field in its first production phase. Second-phase development drilling is to begin in second quarter 2000. In addition, Conoco has signed a heads of agreement with Petrovietnam and Pedco, South Korea's state oil firm, for Block 16-2, in which it will serve as operator and hold a 40% interest.
LNG
Two of the six trains
at Indonesia's 12.3 million tonne/year Arun LNG complex are to be shut down, due to diminishing supplies of natural gas, according to local reports. Indonesia state oil firm Pertamina and Arun operator Mobil Oil Indonesia closed the first train at Arun Feb. 21. The second train will be closed in March, cutting the plant's output by 4 million tonnes. News of the shut-downs follow reports that Japanese LNG buyers Tohoku Electric Power Co. and Tokyo Electric Power Co. are both renewing their respective supply contracts, due to expire, but only for substantially reduced volumes (OGJ, Sept. 20, 1999, p. 40).
Pipelines
Colonial Pipeline Co.,
Atlanta, plans to increase its throughput capacity by 144,000 b/d to about 2.35 million b/d through an expansion of its 36-in. distillate Line 2, which extends from Houston to Greensboro, NC. Expansion plans, to get under way in second half 2000, call for the reactivation of mainline pumping facilities, addition of horsepower at selected locations, upgrade of impellers, and improvements at existing booster stations.
Repsol-YPF SA
brought on line its 350-km, 22-in. Cartagena-Puertollano pipeline in Spain, which replaces a line that extended from M
Nicor Inc.,
Naperville, Ill., signed an agreement to become an equal partner in the planned Horizon pipeline with Natural Gas Pipeline Co. of America, a subsidiary of Kinder Morgan Inc. (OGJ, May 17, 1999, p. 38). The Horizon pipeline is a $75 million natural gas pipeline that will originate in Joliet, Ill., and extend 74 miles into northern Illinois, connecting the emerging supply hub at Joliet with the Nicor Gas grid and an existing NGPL pipeline. Construction of the 36-in., high-pressure pipeline is expected to start in spring 2001 and to be completed by spring 2002. Initial capacity will be 380 MMcfd.
Companies
Hurricane Hydrocarbons Ltd.,
Calgary, raised $25 million to be used along with existing cash to repay $42 million of an $180 million principal balance owed to bondholders (OGJ, Jan. 17, 2000, p. 73). Another $14 million would be paid as a bonus to bondholders to approve the firm's restructuring plan; bondholders have not said whether they will accept the repayment proposal. Hurricane has been operating under court protection while trying to restructure its finances. The restructuring proposal also would alter an agreement under which Hurricane would merge with the entity operating the Shymkent refinery, now processing about 80,000 b/d of Hurricane crude in Kazakhstan. In effect, the refinery would receive additional shares and receive a cash payment of $45 million, down from $57 million; the refinery entity would still hold a 33% interest in Hurricane.
Forcenergy Inc.,
Miami, emerged from Chapter 11 status, filed in March 1999, after completing exit financing arrangements of $320 million in senior secured bank loans. The loans consisted of a new $250 million senior secured revolving credit facility with an initial borrowing base of $250 million and a new $70 million senior secured term loan, Forcenergy said.
BG Group PLC
completed the sale of its 24% holdings in Dynegy Inc., Houston, for $710 million. The divestment follows the closure of the merger of Dynegy and Illinova Corp. (OGJ, June 21, 1999, p. 24). For the deal, BG received $540 million cash and the rest in $50 convertible preference shares in the newly formed company.
CMS Energy Corp.,
Dearborn, Mich., plans to divest its 50% interest in the 2,000 Mw Loy Yang power plant and coal mine complex near Melbourne, Australia. Believed to be no longer a "strategic" asset for the company, CMS will add the proceeds from the plant's sale to the $600-700 million it expects to receive by April for other such noncore assets.
Prize Energy Corp.,
Dallas, has completed its merger with Vista Energy Resources Inc. (OGJ, Oct. 18, 1999, p. 46). The new firm will be called Prize Energy Corp. On a combined basis, as of Dec. 31, 1999, the company had total proved reserves of about 279 bcf of natural gas and 96 million bbl of oil, with a reserve mix of 52% oil and 48% natural gas.
Oilsands
PanCanadian Petroleum Ltd.,
Calgary, received approval for and started seismic work on its $370 million (Can.) Christina Lake thermal oilsands project near Fort McMurray, Alta. The project will be developed in three phases over 8 years and will use steam-assisted gravity drainage to recover bitumen. Production is scheduled to start in 2002 at 10,000 b/d in Phase 1, 30,000 b/d in Phase 2, and 70,000 b/d in Phase 3-by 2009. The project will eventually require 700 horizontal well pairs for steam injection and bitumen recovery.
Exploration
BHP Petroleum Pty. Ltd.
and 50-50 joint venture partner Mobil Exploration & Producing (Australia) Pty. Ltd. made an oil discovery in the Carnarvon basin 50 km off Western Australia. On test, the Coniston 1 wildcat well, drilled in 389.5 m of water on permit WA-255-P, flowed 2,119 b/d of oil. The well reached 1,350 m TD and is 25 km north of the previous BHP Macedon gas and Pyrenees oil discoveries and 10 km north of Woodside Petroleum Ltd.'s Vincent oil discovery. Further evaluation is required to determine commerciality.
Conoco
will acquire a 20% interest in the Zafar Mashal exploration block in the Caspian Sea, about 80 miles off Baku, Azerbaijan. Operator ExxonMobil Corp. holds 30% interest in the block, and Azeri state oil firm SOCAR holds 50%.
Murphy Oil Co. Ltd.
and its partners made a natural gas discovery in the Ladyfern area of British Columbia. During an open-hole test, the well, completed in Slave Point carbonate at 9,100 ft, flowed 31 MMcfd of gas. Well interest holders are operator Murphy, 33%; Apache Corp., 37%; and Beau Canada Exploration Ltd., 30%. The partners plan to conduct pressure build-up tests to determine the size of the discovery, which they say could be substantial. Plans call for extensive seismic data and two more wildcats on separate structures in the 25,000-acre Ladyfern area. The partners also will construct an 8-in., 15-mile pipeline to the Beau Canada pipeline to take Ladyfern gas to Apache's Hamburg gas plant, acquired from Shell Canada Ltd.
US Minerals Management Service
scheduled central Gulf of Mexico lease sale No. 175 for Mar. 15 in New Orleans. The sale will offer 4,203 blocks totaling 22.29 million acres off Louisiana, Mississippi, and Alabama. Tracts are 3-300 miles offshore in 4-3,425 m of water. MMS will require bidders to use electronic funds transfer procedures for payment of the one-fifth bonus bid; electronic payments were optional in the past.
Gas processing
Sweetwater Operations Ltd.,
a unit of Syntroleum Corp., Tulsa, confirmed its choice of the Burrup Peninsula in northwestern Australia as the location for its proposed $600 million (Aus.) gas-to-liquids plant. The site is close to the Woodside Petroleum Ltd.'s LNG and domestic gas facility for treating gas brought ashore from the North Rankin and Goodwyn fields on the North West Shelf. North West Shelf gas project partners recently won a contract to sell 130 petajoules/year of gas as feedstock for the plant. Syntroleum plans a 10,000 b/d liquids output that could include lubricating oils, naphtha, paraffins, and drilling fluids. The proposal has attracted a $40 million conditional loan from the Australian government to help develop the Syntroleum technology in Australia.
Power
BSES Ltd.,
which generates and distributes power to Mumbai's (Bombay's) suburbs, is in talks with BG, Enron India, and Petronet LNG, to supply natural gas for its proposed power project at Saphale, near Palghar, about 100 km from Mumbai. The $368 million, 495-Mw multi-fuel plant would require 750,000 tonnes/year of gas. BSES already finalized commercial terms with state-owned Oil & Natural Gas Corp. for the supply of 900,000 cu m/day of gas and has signed a memorandum of understanding with state-owned Indian Oil Corp. for the 7-year supply of naphtha.
InterGen and ENKA,
Istanbul, let a $900 million contract to GE Power Systems, Schenectady, NY, for the supply of 10 gas turbine generators to be used for three planned natural gas-fired, combined-cycle power plants in Turkey. GE Power will also fulfill a long-term service agreement for the new plants, which will have 4,000 Mw of total production capacity. Two of the plants, Gebze and Adapazari, east of Istanbul, are slated for commercial operation in July 2002 and September 2002, respectively. The third plant, Izmir, is on the Aegean coast and will begin operations in March 2003. The additional power will increase Turkey's electric power capacity by 17%. A joint venture of ENKA and Bechtel Corp. is the engineering, procurement, and construction contractor.
Reliant Energy,
Houston, acquired 21 power plants from Sithe Energies for $2.1 billion. Sixteen of the plants are in Pennsylvania, four in New Jersey, and one in Maryland. Eighteen of the sites are near existing Reliant facilities. Sithe interest holders are Vivendi, 60%; Marubeni Corp., 29%; and its two cofounders, 11%.
Petrochemicals
Saudi Basic Industries Corp.
(SABIC) affiliate Ibn Rushd (Arabian Industrial Fibers Co.), Yanbu, completed the back-integration of its polyester complex with the start-up of a 730,000 tonne/year aromatics plant and 350,000 tonne/year purified terephthalic acid plant. The plants' start-up coincided with a meeting involving SABIC, Ibn Rushd, and bank representatives to reschedule terms of Ibn Rushd's $850 million credit facilities, which were raised in 1997 to support the construction of the two plants (OGJ, Mar. 31, 1997, p. 32).