OGJ NEWSLETTER

May 28, 1990
Occidental Petroleum Corp. calls its portfolio of international oil and gas exploration prospects the best in the company's history. Oxy will devote nearly half its $1.4 billion capital budget for 1990 to oil and gas. It plans 35 wildcats in China, Indonesia, Latin America, Malaysia, Oman, Pakistan, Syria, and the U.K. North Sea. Ghana National Petroleum Corp., using $20 million in World Bank funds, will explore in four areas of the Accra-Keta basin with units of ARCO, Unocal, Shell, and

OGJ NEWSLETTER

Occidental Petroleum Corp. calls its portfolio of international oil and gas exploration prospects the best in the company's history.

Oxy will devote nearly half its $1.4 billion capital budget for 1990 to oil and gas. It plans 35 wildcats in China, Indonesia, Latin America, Malaysia, Oman, Pakistan, Syria, and the U.K. North Sea.

Ghana National Petroleum Corp., using $20 million in World Bank funds, will explore in four areas of the Accra-Keta basin with units of ARCO, Unocal, Shell, and Amoco, OPEC News Agency reports.

The areas are the Cape Three Point basin, South Tano basin, and around Saltpond field, abandoned in 1985 when production fell to about 10,000 b/d of oil.

China will use $5.87 million provided by the U.N. Development Program to procure "advanced well drilling expertise" for use in the Tarim basin frontier, Xinhua News Agency reported.

An official at the Ministry of Geology and Mineral Resources said serious technical problems have emerged in the basin since the first wells were drilled there in 1984 due to limited materials, manpower, and technical know-how.

A helicopter transportable rig shipped from Brazil will drill in a remote region of Myanmar.

Yukong Ltd. of South Korea let an 18 month contract to Parker Drilling Co., Tulsa, which plans to spud the first well in September. The rig will be barged up the Irrawaddy River from Yangon, formerly Rangoon, and transported by helicopter in 5,500 lb loads to the drillsite (see map, OGJ, May 7, p. 35).

Peru's production woes stemming from disputes with private companies over payment delays now extend offshore.

State owned Petromar SA has halted drilling and has been losing 1,000 b/d of production off Peru's northern coast since International Marine Inc. and Offshore Overseas on May 9 stopped operating supply and crew boats over nonpayment of $350,000/month retroactive to January. Talks were still going on at presstime last week.

Petromar is using its own small boats to keep up maintenance at its platforms, producing 21,500 b/d before the dispute.

On several occasions in 1989-90, Occidental Petroleum halted maintenance on wells in Peru's jungle--slashing the country's production--because of late or insufficient payments by state owned Petroleos del Peru (OGJ, May 7, p. 43).

Peru's oil flow in the first quarter dropped to 127,600 b/d from 142,100 b/d in first quarter 1989.

Field development and enhanced recovery projects may help African and Middle East countries boost crude oil productive capacity.

Libyan EOR will add 21 billion bbl of crude to the country's reserves, Libya Oil Minister Fawzi Shakshuki said. An EOR project in the Intisar D reef reservoir has recovered 68% of original oil in place, he said.

Libya's response to OGJ's 1990 EOR survey showed that the reservoir is producing about 40,000 b/d of 39.2 gravity oil from a fieldwide hydrocarbon miscible gas injection project (OGJ, Apr. 23, p. 62).

Shakshuki said ultimate recovery at Intisar will reach 71% with reservoir blowdown.

Libya's conventional oil resource is an estimated 180

billion bbl, of which only 45 billion bbl is recoverable by primary and secondary means, he said.

Meanwhile, Iraq proposed that Japanese oil and trading companies join a $2-3 billion project to develop productive capacity of 629,000 b/d of oil from four unidentified southeastern Iraqi oil fields.

Texaco will furnish and install sophisticated computers for an arm of the Soviet Ministry of Geology in a new building in Moscow.

The installation is part of an agreement between Texaco Europe Research Inc. and Vniizarubezhgeologia, the ministry's all-union research institute.

Texaco employees will work with research institute employees and staff the computers, which will process geophysical and geological data to assess oil and gas potential in Soviet and other basins.

Soviet personnel from the institute will participate in joint studies at Texaco's Houston exploration and producing technology division next month.

The Soviets have put fresh pressure on India to accept the Iraqi Fao crude blend instead of Basra light crude the Soviets have supplied for years, Xinhua News Agency reported.

The Soviet Union receives the Iraqi crude as trade surplus for military goods supplied to Iraq.

India said major refinery refits are required to process Fao blend, which yields a low percentage of middle distillates that are in short supply in India.

Brent foward trading is at a standstill between some U.S. and non-U.S. companies even though Exxon and Conoco settled out of court on confidential terms a lawsuit filed by Transnor (Bermuda) Ltd. The suit alleged oil price fixing.

In an interim ruling before the settlement, the judge held that Brent trades came under Commodity Futures Trading Commission jurisdiction.

A CFTC task force rejected that notion earlier this month and is preparing a further interpretation (OGJ, May 21, Newsletter).

U.S. operators plan to form separate joint ventures to exploit Cretaceous Austin chalk in South Texas and Niobrara in Northwest Colorado, both horizontal drilling targets.

The companies are Oryx Energy Co., Dallas, operator, and Wolverine Exploration Co., Fort Worth. In the Austin chalk program, Oryx will have a 50% interest in 166,000 gross acres of Wolverine's holdings in the trend.

Oryx will have a 60-66.7% working interest in at least 60,000 acres in Northwest Colorado.

A 45 day open season for throughput nominations netted Wyoming-California Pipeline Co. requests for 1.5 bcfd in firm gas service and a further 4.7 bcfd of interruptible transportation. Initial capacity is to be 600 MMcfd.

Most of the contracts are with high priority utility-residential and electric generation customers.

WyCal plans to negotiate contracts with most of the shippers by late June.

The National Transportation Safety Board is due to ap- prove its preliminary findings July 31 regarding the Exxon Valdez tanker spill in Alaska's Prince William Sound Mar. 24, 1989.

If NTSB follows its current timetable, it will release its primary conclusions regarding the accident, state the probable cause, and make safety recommendations.

The Senate energy committee has approved a global warming bill that would establish a 3 year, $27 million program for a federal gas cofiring program.

The Department of Energy would pay for as much as half of the cost of projects demonstrating cofiring of gas and coal in electric utility and large industrial boilers.

The bill directs DOE to seek ways to reduce carbon dioxide emissions 20% by 2005 and report in 18 months on how the U.S. could replace fossil fuels with renewable resources.

Meanwhile, Rep. Fortney Stark (D-Calif.) has filed a global warming bill that would tax the use of gas, oil, and coal as a way to reduce carbon dioxide emissions.

By 1995, the tax on oil would be $3.25/bbl, gas 40/Mcf, and coal $15/ton.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.