INDUSTRY BRIEFS

MARKETING

TRANSCO ENERGY CO. will seek Federal Energy Regulatory Commission approval to restructure its gas marketing businesses into a single organization. Transco Gas Marketing Co. (TGMC) would handle certificated sales currently made by Transcontinental Gas Pipe Line Corp. (TGPL) and Texas Gas Transmission Corp. units and uncertificated services offered by Transco Energy Marketing Co. and TXG Gas Marketing Co. TGMC would provide TGPL and Texas Gas systems merchant service under FERC Order 636 and offer marketing and supply options traditionally provided through nonjurisdictional marketers.

DRILLING-PRODUCTION

BRITISH PETROLEUM PLC and Den norske stats oljeselskap AS agreed with Purneftegaz Production Association to boost production from 100 wells in western Siberia's Tarasov field. Field reserves are estimated at 1 billion bbl of oil. Tarasov was discovered in the early 1980s and developed in the late 1980s. Production reached 140,000 b/d, but poor management and problems obtaining equipment caused a decline to 100,000 b/d. Of the 800 wells in the field, 200 are shut in.

URALMASHZAVOD, Russia's leading drilling equipment manufacturer, signed a joint venture (JV) agreement with National-Oilwell and Caterpillar Inc. to develop a new drilling rig design using U.S. and Russian technology. The three will create a JV company in 1993 to implement the project as well as pursue repowering existing Uralmash rigs in the Commonwealth of Independent States.

NORWAY'S STORTING approved Statoil's development plan for West Sleipner gas field, partner Esso Norge reported. Production start-up is scheduled for 1997. Esso pegs its share of West Sleipner reserves at 1 tcf of gas and 100 million bbl of condensate. Esso also is a partner in East Sleipner gas field, under development for an October 1993 start-up.

CONOCO NORWAY INC. let a 400 million kroner ($60 million) contract to Kvaerner AS, Oslo, for fabrication of the drilling module for Heidrun production platform on Blocks 6507/7 and 6507/8 off Central Norway, Work will take place at the Egersund yard, south of Stavanger, with completion scheduled for July 1994.

ENRON OIL CANADA LTD. agreed to purchase the Sandhills, Sask., natural gas property from Precambrian Shield Resources Ltd., an 88% owned unit of Mark Resources Inc., for about $40 million plus payments the next 5 years tied to gas prices received. The property holds about 90 bcf of net proved developed reserves and acreage containing about the same amount of undeveloped reserves, plus about 100,120 total developed and undeveloped net acres. Current net production is 25 MMcfd. The deal is to close Dec. 31.

ZILKHA ENERGY CO.,Houston, let contract to OPI International Inc., Houston, to engineer and construct two platforms and lay pipelines in the Gulf of Mexico. OPI will build and install a three pile platform and lay almost 18 miles of 6 in. gas line on Galveston Block A-50 in 125 ft of water. Fabrication is under way and is to be complete in June 1993, when pipelaying begins. OPI also will build and install a two pile lean-to jacket and deck and lay 1 112 miles of 4 in. gas line on West Delta Block 97 in 175 ft of water. Fabrication is under way, with load-out set for May 1993. Pipelaying is to begin in May-June.

COMPANIES

POTOMAC ELECTRIC POWER CO. (Pepco), a utility serving customers in Maryland, Virginia, and the District of Columbia, canceled an agreement to buy electricity from a gas fired, 340,000 kw independent power project planned in Virginia by Patowmack Power Partners. The action followed a ruling by Maryland Public Service Commission that the purchase agreement was not approved in its present form. The D.C. Public Service Commission also has denied requests for approval of the agreement, In addition, Pepco and Patowmack Partners need approval of Virginia utility regulators.

BP CANADA INC. shareholders approved a company name change to Talisman Energy Inc., Jan. 1, 1993. BP Canada's former parent British Petroleum Co. plc sold its interests earlier this year.

NORCEN ENERGY RESOURCES LTD.'S board approved a $260 million (Canadian) capital budget for 1993, excluding acquisitions, up from a forecast outlay of $216.6 million for 1992 and spending of $258 million/year in 1990-91. Spending plans for the Calgary company break out to $215 million for oil and gas, including $129.4 million for development and $83 million for exploration, and $45 million for propane marketing.

FOREST OIL CORP., Denver, and Oneok Inc., Tulsa, agreed in principle to settle their long gas take or pay dispute for $51.25 million. The settlement is to cover all disputed contracts, claims, and future claims. Oneok has on deposit $73.5 million in cash in lieu of appeal bond made in late 1988 to secure its appeal of a 1988 jury verdict favoring Forest that has been pending since.

REFINING

FORMOSA PLASTICS CORP. let contract to ABB Lummus Crest for basic engineering and process study and planning for a 300,000 b/d grassroots refinery to be built in Taiwan. Lummus Crest will engineer the crude unit, hydrogen unit, saturated gas plant, fractionation unit, and distillate hydrodesulfurization unit. The refinery will have a broad range of processing capability for producing petrochemical feedstock.

EXPLORATION

PREMIER CONSOLIDATED OILFIELDS PLC, London, acquired a 25% interest in Adriatic Sea Block Y off Albania from operator Hamilton Oil (Albania) Corp. The block, covering 766,000 acres, lies about 50 miles east of Brindisi, Italy. It is unexplored but flanked by onshore producing fields in Albania and hydrocarbon discoveries in Italian waters. Hamilton, which retains a 50% interest in the block, acquired about 1,200 line km of seismic data on the block this year. Svenska Petroleum Exploration AB, Stockholm, holds the remaining 25% interest. A production sharing contract (PSC) is under negotiation with state oil company Albpetrol.

BP and Statoil acquired a farmout on Blocks 6 and 12E in the Nam Con Son basin off Viet Nam. BP took a 30% interest and Statoil 15% in the blocks operated by lndia's state owned Oil & Natural Gas Commission. The blocks cover 10,000 sq km and adjoin BP Statoil's Block 5/2. Eight wells will be drilled on Blocks 6 and 12E before mid 1995. BP will operate at least four. BP also plans to drill four wells on Block 5/2.

TOTAL and partners signed a 25 year PSC with Angola's state owned Sonangol covering exploration, development, and production of oil and gas on Block 2/92 off Angola's northern coast. The PSC calls for an initial 3 year period of seismic work and exploratory drilling during a 4-5 year exploration commitment. Interests are held by operator Total 60%, Sonangol 25%, and Daewoo Corp. 15%.

AMOCO (U.K.) EXPLORATION CO.'S wildcat on Irish Sea Block 113/29 off the U.K. flowed 22 MMcfd of gas from Triassic Sherwood sandstone. Amoco holds a 60% interest as operator and Lasmo North Sea plc 40%. More drilling is planned in 1994.

WASCANA EXPLORATION ALGERIE LTD., London, a unit of Saskatchewan Oil & Gas Corp., signed a PSC with Algeria's Sonatrach covering exploration and development on Hassi Dzabat Blocks 427a and 439a south of Hassi Messaoud oil field in East Central Algeria. The PSC calls for 5 years of exploration, including a work commitment of 200 line km of seismic surveys and drilling one exploratory the first 2 years. Wascana's contract area covers 6,300 sq km. Operator Wascana, Oryx Algerie Energy Co., Hardy Oil & Gas (U.K.) Ltd., and Ranger Oil Ltd. each hold 25% in the PSC.

MARATHON PETROLEUM GABON LTD. and Santa Fe Energy Resources of Gabon Ltd. signed a PSC with Gabon for an interest in offshore Block F-89. The block, about 90 miles southeast of Port Gentil, covers about 2,841 sq km. Initial 2 year commitment calls for 1,000 line km of seismic and one well. Operator Marathon holds a 75% working interest in the block, Santa Fe the remainder.

SHELL EXPLORATION PAKISTAN acquired a farmout from a unit of Lasmo Plc covering 50% of Lasmo Oil Pakistan's 95% interest in Block 36 in Pakistan's Northwest Frontier province. State owned Oil & Gas Development Corp. owns the remaining 5%. Since Lasmo acquired the license in 1990, more than 599 line km of seismic have been obtained. Plans call for spudding a wildcat by end of this month.

GOVERNMENT

U.S. DEPARTMENT OF ENERGY issued standard provisions for sale of oil from the Strategic Petroleum Reserve. The rules will apply during an SPR drawdown. They spell out contract clauses, terms and conditions of sale, and performance and financial responsibility measures.

A FEDERAL ENERGY REGULATORY COMMISSION administrative law judge recommended approval of a 1994-95 funding mechanism for the Gas Research Institute. It would recover half of GRI's budget through demand reservation surcharges on interstate gas pipeline shipments and half through the volumetric surcharges.

PIPELINES

WESTCOAST ENERGY INC., Vancouver, B.C., increased the budget for a 5 year expansion under way on its natural gas pipeline system to $1.1 billion (Canadian) from $900 million. The company said the spending increase will be mainly for new processing facilities in Northeast British Columbia, where large gas reserves have been found (OGJ, Oct. 5, p. 23). Westcoast said about one third of the expanded budget will go to upgrade processing facilities in the Monkman area during 1993-96.

COLORADO INTERSTATE GAS CO. (CIG) started up its 20 in., 221 mile Uinta Lateral pipeline from Utah through Colorado into Wyoming. The line connects CIG's main line near Wamsutter, Wyo., with production, notably from tight gas sands, in the Uinta and Piceance basins. Of line capacity of 178 MMcfd, firm capacity agreements cover 174 MMcfd.

TEXAS EASTERN TRANSMISSION CORP. plans to expand its system in Ohio and Pennsylvania to accommodate an additional 11 MMcfd of gas for a 55,000 kw cogeneration plant proposed by Staten Island Cogeneration Corp. The $15 million expansion will involve 8 miles of loop and replacement line. Staten Island Cogen signed a precedent agreement for 20 year firm transportation service to begin Nov. 1, 1994. Texas Eastern will deliver the volumes at a connection with Brooklyn Union Gas Co. for redelivery to Staten Island Cogen.

SAIPEM SPA on behalf of Total and Petroleum Authority of Thailand let a $3.5 million contract to Racal Survey Ltd., New Malden, U.K., for positioning and survey services related to construction of the 322 km Bongkot-Erawan-Khanom gas pipeline in the Gulf of Thailand. Saipem is project pipelay contractor.

U.S. DEPARTMENT OF TRANSPORTATION'S Research and Special Programs Administration proposed rules requiring pipelines to have alcohol misuse prevention programs for employees that perform safety sensitive jobs. The rules, detailed in the Dec. 15 Federal Register, require preemployment, random, reasonable suspicion, postaccident, and followup testing to detect and avoid problems. They cover all natural gas, liquefied natural gas, hazardous liquid, and carbon dioxide pipelines.

PETROCHEMICALS

KUWAIT'S PETROCHEMICAL INDUSTRIES CO. is seeking partners to participate in and help finance a $2.5 billion, 500,000 ton/year high and low density polyethylene complex in that country. The firm wants to select a foreign partner in early 1993 that will assume 40-49% of project costs.

CHEVRON USA let contract to Jacobs Engineering Group Inc., Pasadena, Calif., to engineer and build a 2,050 b/d methyl tertiary butyl ether (MTBE) unit at its Richmond, Calif., refinery. The unit is expected on stream by February 1993.

ARCO CHEMICAL CO. started commercial production of ethyl tertiary butyl ether (ETBE) Dec. 14 at Coastal Refining & Marketing Inc.'s Corpus Christi MTBE plant. First production run is targeted at 130,000 bbl of ETBE. ARCO is leasing the Coastal plant to demonstrate flexibility of switching production between MTBE and ETBE. Several major gasoline producers, including Chevron Corp. and Shell Oil Co., will evaluate ETBE as gasoline blendingstock. ARCO said it is the first company to produce commercial volumes of ETBE for the merchant market.

U.S. EXPORT-IMPORT BANK approved a $17.4 million loan to support the sale of U.S. equipment and services to China Petrochemical International Corp. for construction of an ethylene plant at the Maoming petrochemical complex in South China. JGC Corp., Houston, will act as the exporter for the U.S. contracts.

SUPPLY/DEMAND

AMERICAN PETROLEUM INSTITUTE reported U.S. crude oil production dropped to 7.032 million b/d in November, 4% below the year ago level. U.S. crude and refined products imports increased 5.2% to 8.01 million b/d. Demand jumped 7.7% for distillate fuel oil and 8.7% for kerosine jet fuel from the level of November 1 991 . U.S. refineries in November operated at 89% of capacity vs. 83.7% a year ago. U.S. crude and petroleum product stocks were 1.062 billion bbl, down 1.5% from a year ago.