NPRA asks court to overturn EPA's E15 waiver
The National Petrochemical & Refiners Association and two other oil and gas associations petitioned a federal appeals court on Jan. 3 to review and overturn the US Environmental Protection Agency's decision allowing fuels with up to 15% ethanol to be used in model year 2007 or newer vehicles.
The Western States Petroleum Association and Independent Liquid Terminals Association joined NPRA in the legal challenge. "The organizations challenging EPA's decision believe the agency has acted unlawfully in its rush to allow a 50% increase in the amount of ethanol in gasoline without adequate testing and without following proper procedures," NPRA Pres. Charles T. Drevna said on Jan. 3. "As a result, we had no choice but to take this issue to court."
EPA issued the waiver on Oct. 13, 2010, in response to a petition by Growth Energy, an ethanol advocacy group. The US Appeals Court for the District of Columbia upheld EPA's action on Dec. 21. NPRA said it and the two other groups will argue in their lawsuit that EPA does not have legal authority under the Clean Air Act to approve a partial waiver allowing the use of E15 in some engines but not in others.
It said that it also will argue that EPA based its partial waiver decision on new data submitted to the public rulemaking docket on the day before it announced the partial waiver decision, thereby providing no time for stakeholder review or meaningful public comment which the federal Administrative Procedure Act requires.
NPRA, along with recreational, work equipment, and transportation engine manufacturers, have expressed concern that E15's introduction without more complete tests potentially could damage engines.
Newfield, EOG terminate Marcellus shale deal
Newfield Exploration Co. and EOG Resources Inc. mutually agreed to terminate a deal for Newfield to buy Marcellus shale development assets in Bradford County, Pa., from EOG for $405 million.
The original sales agreement was announced last month, and the termination announcement came Dec. 22 (OGJ, Nov. 22, 2010, Newsletter).
Newfield formerly had planned to acquire 50,000 net acres estimated to contain 1.5-2 tcf of gas equivalent net unrisked recovery potential. The companies did not elaborate on what prompted them to call off the transaction.
OPI Gas buys Shell Gas LPG Pakistan
OPI Gas (Pvt) Ltd. completed its acquisition of Shell Petroleum Co.'s 67.91% stake in Shell Gas LPG Pakistan Ltd.
Khalid Mumtaz Malik, chief executive of OPI Gas, said, "Given the rising demand for LPG in the country, we are confident that this acquisition will help maximize value for shareholders."
The acquisition gives OPI Gas horizontal integration with a firm experienced in Pakistan's LPG marketing, he said.
The original share purchase agreement between OPI Gas and Shell Petroleum was signed June 16.
Japan's November oil imports rise 10.8% on year
Japan's Natural Resources and Energy Agency (NREA) said the country's imports of crude oil in November rose 10.8% from a year earlier to 122.09 million bbl.
It also marked the first sequential increase in 2 months, officials said.
Oil shipments from the Middle East accounted for 86.2% of Japan's total imports, down 3.8%, said NREA, a division of the Ministry of Economy, Trade, and Industry.
Saudi Arabia remained Japan's chief supplier of oil, exporting 38.24 million bbl, down 0.4%. The UAE followed with 22.14 million bbl, down 3.8%, while Qatar, which supplied 15.1 million bbl, rose 24.6%.
NREA earlier reported Japan's oil imports in October fell 5.8% from a year earlier to 105.23 million bbl, marking the first decline in 4 months.
It said oil shipments from the Middle East still accounted for 86.3% of total imports, down 3.5%.
Saudi Arabia remained Japan's biggest oil supplier, exporting 28.12 million bbl, down 4.5%; with the UAE second at 22.33 million bbl, down 19.3%; followed by Qatar, with 11.01 million bbl, down 20.1%.
According to the US Energy Information Administration, Japan was the second-largest net importer of oil in the world after the US in 2009, having imported about 4.7 million b/d.
"Japan is currently looking towards Russia, Southeast Asia, and Africa to geographically diversify its oil imports," EIA said, adding 80% of Japanese oil imports originate in the Middle East, up from 70% in the mid-1980s.
ONGC, GAIL initial coop agreements
Oil & Natural Gas Corp. and GAIL (India) Ltd., both controlled by the government of India, have initialed agreements for cooperation in the natural gas and petrochemicals businesses.
One area of agreement includes the exclusive sale of gas produced by ONGC to GAIL for 3 years. The agreement includes the swapping of gas produced by both companies to create logistical efficiencies.
GAIL also initialed agreements with ONGC Petro Additions Ltd., a joint venture, to become a copromoter of a petrochemical complex under development in the Dahej Special Economic Zone in Gujarat. The plant is to have capacity to produce 1.1 million tonnes/year of ethylene.
ONGC is India's largest exploration and production company. GAIL is the main pipeline and distribution system operator and also produces gas.
Ivanhoe discovers more Sichuan gas in China
Ivanhoe Energy Inc. said China subsidiary, Sunwing Energy Ltd., discovered natural gas with its Yixin-2 well in southwest China on the Zitong block. Gas flowed at rates of up to 13 MMcfd, and averaged 9-10 MMcfd during an initial 24-hr test.
Gas is flowed from the Xu-4 formation, a well established gas-producing formation. Ivanhoe said the rates recorded demonstrate the discovery's strong potential, and Sunwing plans to continue with further development of the Xu-4 formation and other structures in the Zitong block (OGJ Online, Nov. 2, 2010).
Sunwing's 659,840-acre holding on Zitong block is in the Sichuan Province. Sunwing operates the Zitong exploration block and holds a 90% contractor interest in a petroleum contract with PetroChina Co. Ltd. Japan's Mitsubishi Gas Chemical Co. holds 10% contractor interest.
Technical teams from Sunwing and PetroChina are working to develop a strategy to evaluate the Yixin structure, as well as the potential for further discoveries elsewhere on the Zitong block, Ivanhoe said.
Llanos wildcat making 10,440 b/d of light oil
Petrominerales Ltd., Bogota, said its Yatay-1 exploratory well on the Guatiquia block in Colombia's Llanos basin is making 10,440 b/d of 43° gravity oil on natural flow from the Lower Sand 3 formation.
Logs at Yatay-1 indicate 114 ft of potential net oil pay in the Lower Sand-3 formation and 17 ft of potential net oil pay in the Guadalupe formation.
An electrical submersible pump was installed in the well after perforating a 10-ft section at the top of the Lower Sand-3 formation. Over the last 17 hr the well has produced on natural flow through a 1-in. choke, at a rate of 10,440 b/d with less than a 0.1% water cut.
The company is evaluating the potential for additional Yatay follow-up locations incorporating the well results and recently completed Guatiquia 3D seismic survey. Yatay-1 is the first well into a new, seismically defined structure downdip from the Candelilla structure and across the bounding Candelilla fault. The Candelilla structure produced more than 7.3 million bbl of light oil in 2010 from the Lower Sand-3 and Guadalupe formations.
The rig will move to the Candelilla-5 location targeting the Guadalupe formation that is currently producing in Candelilla-4. Meanwhile, the Cardenal-1 and Celeste-1 wells are drilling since early December 2010 on the Corcel block, and results are due by late January.
Meanwhile, Petrominerales' Borugo-1 exploratory well on the Rio Ariari heavy oil block in the Llanos basin is cased for tests after logs indicated 35 ft of potential net oil pay in the Mirador formation. Total depth si 5,260 ft.
Borugo is testing a play concept distinct from the company's Mochelo-1 and Rio Ariari-1 discovery wells.
Desire drills another dry hole off Falklands
Desire Petroleum PLC said its 25/5-1 well on the Dawn/Jacinta prospect reached a depth of 1,313 m, but drilling and wireline logging data show no hydrocarbons have been found.
"The well will now be drilled to the planned total depth around 1,670 m to evaluate the deeper Dawn Prospect," Desire said, adding that the reported results are based on the work of Senergy (GB) Ltd.
The announcement will likely be greeted with cheers in Argentina, which has long complained of British-led efforts to discover oil and gas in the region around the Falklands Islands, over which the two nations went to war in the 1980s.
Argentina recently passed a law includes the disputed islands as part of its Tierra del Fuego province, and the Latin American nation also declared the Desire drilling illegal.
In October, Desire Petroleum disappointed investors by announcing its 14/15-1 well on the Rachel prospect in the remote North Falkland basin found thick, porous reservoir rock but no hydrocarbons and would be sidetracked (OGJ Online, Oct. 15, 2010).According to industry observers, Desire's failure on the Jacinta prospect will put pressure on Rockhopper Exploration PLC with its next well, aimed at proving an extension to the Sea Lion find reported in May.
At the time, Rockhopper said its Sea Lion discovery in the North Falkland basin in the South Atlantic found an estimated 170-242 million bbl of recoverable medium-gravity crude oil as "the first contingent oil resource in the Falklands" (OGJ Online, June 7, 2010).
Rockhopper plans to start drilling next month using the Ocean Guardian rig currently being used by Desire, which was named after HMS Desire, the British ship that claimed to have discovered the Falklands in 1592.
Drilling & Production — Quick TakesApache starts production from Balboa in gulf
Houston independent Apache Corp. started producing oil and natural gas from Balboa field in about 3,350 ft of water on East Breaks Block 597, 130 miles south of Galveston, Tex. The field is a one-well development with a 6-mile tieback to the Anadarko Petroleum Corp. operated Boomvang spar on East Breaks Block 643.
Production from the well started on Dec. 28.
Apache said initial gross flow rates have stabilized at about 30 MMcfd of gas and 1,400 bo/d from an oil-bearing sandstone reservoir with a gas cap. The company noted that the well is completed near the crest of the structure to optimize overall hydrocarbon recovery and is expected to initially produce gas and liquids with increasing liquids and decreasing gas volumes throughout the life of the field.
Apache assumed operatorship of Balboa with the acquisition of Mariner Energy Inc. in November 2010.
The company holds a 50% interest in the block with the other 50% held by Marubeni Oil & Gas (USA) Inc., according to US Bureau of Ocean Energy Management, Regulation, and Enforcement records.
Seadrill buying two ultradeepwater semis
Seadrill Ltd. agreed to acquire two ultradeepwater semisubmersibles currently under construction at Jurong Shipyard Pte. Ltd. in Singapore for $1.2 billion, Seadrill announced on Jan. 3.
The SeaDragon I and Seadragon II are expected to be delivered in this year's first and fourth quarters, respectively.
The SeaDragon I had a 5-year contract, but Seadrill said the contract is under discussion because the scheduled delivery was delayed. There is no contract for the Seadragon II.
The dynamically positioned rigs will be capable of drilling in 10,000 ft of water and have total vertical drilling depth capacity of up to 35,000 ft. The rigs each have a single derrick with dual pipe handling and offline stand building capabilities, Seadrill said.
Vantage Drilling Co. oversaw construction services for SeaDragon I and SeaDragon II, which are nearing completion. Vantage said a customer, which it did not identify, had terminated Vantage's management contract for the rigs.
Paul A. Bragg, Vantage chairman and chief executive officer, said, his company considered buying the rigs but decided against it. "We were not prepared to take excessive risks in terms of our offer," Bragg said.
On Dec. 29, Vantage announced its Platinum Explorer ultradeepwater drillship commenced operations for ONGC in India. Platinum Explorer is contracted for 5 years with corresponding estimated revenues of $1.1 billion.
Vantage owns four Baker Marine Pacific Class 375 ultrapremium jack up rigs and a drillship.
Petrobras submits Tupi, Iracema declaration
Petroleo Brasileiro SA (Petrobras) submitted to Brazil's National Petroleum Agency (ANP) a declaration of commerciality for the presalt oil and gas fields in the Tupi and Iracema areas of Block BMS-11 in the Santos basin off Brazil.
Petrobras proposed the names Lula and Cernambi for the fields in the Tupi and Iracema areas, respectively.
In its commerciality declaration, Petrobras reports that Lula contains 6.5 billion boe and Cernambi contains 1.8 billion boe of recoverable oil and gas.
The oil gravity is 28° in Lula and 30° in Cernambi.
Petrobras notes that Lula will be the first supergiant oil field in Brazil with recoverable volumes more than 5 billion boe, while Cernambi is among the top-five giant fields in Brazil.
Along with the commerciality declaration, Petrobras also submitted to ANP the final report on the evaluation plan and the development plan for the two fields.
Petrobras drilled the discovery well for the area in October 2006 and since then has drilled 11 wells in the area. In April 2009, the company began an extended well test in Tupi that provided information for estimating recoverable volumes and formulating a development plan.
Pilot production from the Tupi area began in October (OGJ Online, Oct. 28, 2010).
Petrobras is the operator of the block with a 65% interest. Block partners are BG Group 25% and Portugal's Galp Energia 10%.
Denbury commences CO2 flood at Hastings
Denbury Resources Inc. in December completed the last section of the 24-in., 320-mile Green Pipeline for transporting carbon dioxide from Donaldsonville, La., to oil fields in Texas and on Dec. 16 started injecting CO2 for enhancing oil production from Hastings oil field in Brazoria County.
The Green line has a designed capacity to transport 800 MMcfd of CO2 and at Donaldsonville the pipeline receives CO2 from Denbury's NEJD CO2 pipeline that also transports CO2 from the company's Jackson Dome, Miss., CO2 source field to its enhanced oil recovery projects in Mississippi and Louisiana. The company also expects to eventually tie in anthropogenic CO2 sources to the Green line.
In addition, Denbury recently received a US Army Corps of Engineers permit for facility construction at Hastings and anticipates receiving a permit for facility construction at Oyster Bayou oil field, Chambers County, Tex., in January 2011.
Denbury started CO2 injection in Oyster Bayou in June 2010.
Denbury in a December presentation estimated that Hastings contains 70-100 million bbl and Oyster Bayou contains 20-30 million bbl of recoverable tertiary oil.
Statoil orders Vigdis North-East subsea equipment
Statoil let a $75 million contract to FMC Technologies Inc. for the manufacture and supply of subsea production equipment for the Vigdis North-East development off Norway.
Vigdis North-East is a fast-track oil and gas field in about 920 ft of water.
FMC will supply and manufacture four subsea trees, one manifold, subsea and topside control systems, and an umbilical. For the equipment, FMC will base the design of its standardized solution for Statoil. FMC expects deliveries to start in third-quarter 2011.
Vigdis North-East along with PanPandora, Katla, and Gygrid are the four fields in Statoil's first wave of fast-track projects (OGJ Online, Nov. 12, 2010).
PROCESSING — Quick TakesYeosu refining complex due upgrading capacity
GS Caltex, Seoul, plans to add upgrading capacity at its 760,000 b/cd refining complex at Yeosu, South Korea. It will spend $978.6 million to add 53,000 b/d of vacuum gas oil fluid catalytic cracking capacity and 24,000 b/d of gasoline hydrodesulfurization capacity. It also will add alkylation capacity of unspecified size.
The upgrade will boost production of propylene by 250,000 tonnes/year at the complex to 450,000 tonnes/year. The complex currently has 61,000 b/d of resid FCC capacity and 181,000 b/d of resid hydrocracking capacity in three units.
GS Caltex is a 50-50 partnership of Chevron Corp. and GS Holdings, Seoul.
Chinese gas plant installs treating in eastern plant
Sinopec's 1.27-bcfd Puguang natural gas plant in China's eastern Sichuan province is using Black & Veatch's Interstage Cooling technology to remove H2S and CO2 from feed gas produced from Puguang field.
The Puguang gas plant produces up to 8,400 tonnes/day and 3 million tonnes/year of sulfur. The processing plant removes virtually all the H2S, which comprises nearly 15% of the raw gas, and converts it to elemental sulfur. It also reduces CO2 to 3 vol % from 10 vol %, according to the Black & Veatch announcement. The company is providing process design engineering, technology licensing, and field support services as part of a sour-gas purification and sulfur-recovery scheme.
The giant gas field, with proven original gas in place of more than 12.5 tcf, was discovered in 2003 in the eastern Sichuan basin. In addition to the Puguang gas plant, Black & Veatch says it has recently provided process engineering and technology licensing for PetroChina's Longgas sour-gas field development in Sichuan province, a field discovered in 2006.
NARL lets contract for refinery turnaround
North Atlantic Refining Ltd. (NARL) has let a 3-year contract to Jacobs Engineering Group Inc. for the provision of turnaround and small capital work services at the company's 115,000-b/d refinery at Come By Chance, Newf.
Under the contract's terms, Jacobs will provide turnaround planning and execution, including preplanning and post turnaround activities, as well as delivery of small capital works at the site.
Sonatrach awards refinery contract in Algeria
Sonatrach awarded Technip a contract for the refurbishment and revamping of the Algiers refinery.
The 38-month turnkey contract for $908 million covers execution of the complete project, including the design, equipment supply, construction, and start-up.
The revamp of the existing installations will enable refining capacity to be increased to 3.6 million tone/year from 2.7 tonnes/year. The new units will allow the refinery to produce gasoline at specifications similar used in Europe.
TRANSPORTATION — Quick TakesPipeline advances in Abu Dhabi gas project
Abu Dhabi Marine Operating Co. (ADMA-OPCO) has completed the first phase of an offshore pipeline in the Integrated Gas Development of its parent company, Abu Dhabi National Oil Co., according to press reports.
The 38-km pipeline will be able to carry 1 bscfd of gas from giant Umm Shaif oil field to Das Island for handling by another ADNOC operating company, Abu Dhabi Gas Liquefaction Ltd.
From Das, gas will move 212 km to an Abu Dhabi Gas Industries Ltd. (GASCO) gas processing complex at Habshan. There, GASCO is building a plant, Habshan 5, with capacity to process 2.15 bscfd of gas. In addition to the feed from Umm Shaif field via Das, Habshan 5 will process associated gas from onshore oil fields undergoing expansion and sour nonassociated gas from Habshan fields.
Main units of the Habshan 5 plant will be two trains for feed-gas compression, one train for condensate stabilization, four trains for gas sweetening and dehydration, two rich-gas NGL recovery trains, and four sulfur-recovery units.
The plant is designed to produce 750 MMscfd of sales gas, 12,000 tonnes/day of NGL, and 5,200 tonnes/day of sulfur.
The offshore part of the project includes production of an additional 1 bscfd of gas for injection at Umm Shaif (OGJ Online, Oct. 1, 2009). The full project is scheduled for completion in the third quarter of 2013.
Tokyo Gas, Hokkaido Gas sign LNG supply deal
Tokyo Gas Co. signed a heads of agreement for the sale and supply of LNG to Hokkaido Gas Co. under which Tokyo Gas will supply Hokkaido Gas with LNG for 11 years starting in fiscal year 2012. The gas will be delivered to Hokkaido Gas' Ishikari LNG terminal, now under construction in Ishikari Bay New Port. Completion is set for yearend 2012.
In March, Tokyo Gas signed two agreements for the purchase of LNG, one with BG Group PLC's Queensland Curtis LNG Project in Australia and the other with Energy World Corp.'s Sengkang Project in Indonesia (OGJ Online, Apr. 6, 2010).
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com
