INDUSTRY BRIEFS

COMPANIES

KERR-MCGEE CORP., Oklahoma City, will report its refining/marketing business as discontinued as of May 2. It does not expect to report a gain or a loss in first quarter earnings as a result. In recent weeks, Kerr-McGee has signed contracts or letters of intent to sell its Cotton Valley, La., and Corpus Christi refineries, its Cato Oil & Grease Co. unit, 41 service stations in Oklahoma and Kansas, several products terminals, and its ROSE heavy oil refining process (OGJ, Apr. 24, p. 35).

REFINING

A TOTAL GROUP conducting a feasibility study of Viet Nam's first refinery contends the site Hanoi has selected at Dung Quat Bay in the middle of Quan Ngai province will substantially increase project cost and construction time because of its remoteness from production areas and difficult climate. The group prefers the Long Son site near Saigon.

RUSSIA plans to resume construction of a major refining catalysts plant at Ishimbai, Bashkortostan, that it expects to meet the nation's demand for refining catalysts estimated at 24,000 metric tons/year. The original project, drawn up in 1972 and partly funded, was to be the sole Soviet Union producer of hydrofining and hydrocracking catalysts. Soviet authorities signed contracts in 1988 with Japan's Itochu Corp. and Denmark's Haldor Topsoe AS for equipment and technology valued at $130 million and eyed a 1992 start-up, which was interrupted by he collapse of the Soviet Union.

EXPLORATION

CANADIAN OCCIDENTAL PETROLEUM LTD. acquired a 26 2/3% working interest in production sharing contracts for the Kai and Barakan blocks covering a combined 18,600 sq km in eastern Indonesia. CanOxy also has an option to acquire a 26 2/3% interest in adjacent Tanimbar and Rebi blocks covering a combined 34,700 sq km. Union Texas Petroleum is operator with a 33 1/3% interest, with the remaining 40% held by Total. The first wildcat will spud in May or June targeting a giant deepwater structure on the western side of the Kai block, part of an unexplored Mesozoic trend in the Arafura basin.

AMOCO TRINIDAD OIL CO. found another 3.5 tcf of gas reserves off Trinidad's southeast coast as a result of its exploration efforts there in the past 11 months, the Trinidad Guardian newspaper reported. It quoted Amoco Trinidad Pres. David Wight as saying the newly discovered reserves will help support plans for a liquefied natural gas export project.

DRILLING-PRODUCTION

TAURUS EXPLORATION, a unit of Energen Corp., Birmingham, Ala., plans to spend as much as $20 million to acquire U.S. producing leases this year. Taurus added about 9 bcf of gas equivalent (bcfe) of proved reserves and 2.8 bcfe of probable reserves in fiscal 1995 resulting from its $5.6 million acquisition of producing leases in or off five U.S. states.

AMERADA HESS LTD. plans fast track development of its U.K. North Sea Fergus discovery as a subsea tieback to Fife field if an appraisal well being drilled is successful. The Block 39/2 Fergus discovery lies 4 miles southeast of Fife, currently under development with a floating production, storage, and offloading ship (OGJ, May 23, 1994, p. 26). Fergus is expected to go on stream in early 1997. Discovery well 39/2-2, drilled in October 1994 in 230 ft of water, flowed on test at a stabilized rate of 7,480 b/d of 37 oil through a 30/64 in. choke.

THE 50-50 AMKOMI VENTURE of Dublin's Aminex plc and Russia's Komineft plans to develop 50 million bbl Kirtayel oil field in the Komi republic. Ten wells in the shut-in field are to be brought back on line at a total 2,000 b/d of oil. More wells are to be drilled, each expected to produce 400 b/d. Aminex will contribute cash and technical advice for the project, which will include completion of a half-built oil treatment plant.

PRIDE PETROLEUM SERVICES INC., Houston, withdrew its offer to acquire Drillers International SA, the Argentine subsidiary of DI Industries Inc., citing unacceptable terms under a letter of intent signed earlier (OGJ, Apr. 17, p. 31).

WRT ENERGY CORP., The Woodlands, Tex., and its Tesla Resources Inc. unit closed the $20 million purchase of a 43.75% working interest in 5,892 gross acres of producing oil and gas leases in West Cote Blanche Bay field, St. Mary Parish, La. The trade increased WRT's interest in the developed portion of the field to 50%.

THE STATE PETROLEUM CORP. subsidiary of Arakis Energy Corp., Vancouver, B.C., found a significant new oil zone in greater Heglig oil field in Sudan. The 8X Heglig well, with 55 ft of net pay, flowed 35 gravity oil from lower Cretaceous Lower Bentiu perforations at 6,125-88 ft. The well has a tested capacity of 6,000 b/d and is expected to produce 4,000 b/d, the highest rate attained for a single pay zone on the company's Sudan acreage.

PAKISTAN'S state owned Oil & Gas Development Corp. extended and found gas pay in Sadqal oil field, about 45 km from Islamabad, with a third appraisal well. Initial test results show the well can produce about 1,000-1,200 b/d of oil and 8-10 MMcfd of gas from a zone at 3,980 m. The discovery well and two confirmation wells combined are producing about 1,500 b/d and 24 MMcfd.

OIL INDIA LID. (OIL) will offer blocks on four concessions it operates for development in joint ventures with foreign oil companies. The acreage is in the Assam, Rajasthan, Ganga Valley, and Offshore Orissa areas. OIL produces about 54,000 b/d of oil, mainly in the eastern state of Assam, where it was prevented until recently from expanding operations to the joint venture areas and the Saurashtra region. It recently found oil in Rajasthan, where it also is producing about 1.75 MMcfd of gas and hopes to boost that to 19.25 MMcfd.

CENTRAL ASIAN

PETROLEUM GUERNSEY LTD. (CAP-G), a private Ankara company owned 40% by Chaparral Resources Inc., Denver, started a $100,000 feasibility study of further development of three western Kazakhstan oil fields. Karatube, South Karatube, and Akjar oil fields are 240 miles northeast of Karakduk oil field, where CAP-G is to begin further development by yearend (OGJ, Apr. 24, p. 35). The study is to be complete by yearend.

TALISMAN ENERGY INC., Calgary, tested three wells in a previously untapped deeper pay in Air Serdang field on the Ogan Komering block in Sumatra. The wells flowed 32 gravity oil from Talang Akar at respective rates of 3,900 b/d, 2,450 b/d, and 980 b/d. Talang Akar production began Apr. 21 at an initial rate of 3,200 b/d. A seismic survey is in progress, and further development drilling is planned this year.

UNITS of Omimex Group, Fort Worth, and Saba Petroleum Co., Irvine, Calif., agreed to acquire Texaco Inc.'s interests in three Colombian oil fields. Teca and Nare fields produce about 13,500 b/d of oil and 5.5 MMcfd of gas from 350 wells under an association contract Texaco holds 50-50 with state owned Empresa Colombiana de Petroleos (Ecopetrol). It operates Cocorna field under a concession contract. Included in the sale is a 100% interest in the 189 km, 42,000 b/d Velasquez-Galan pipeline to Ecopetrol's Barrancabermeja refinery.

COSTILLA PETROLEUM CORP. and Costilla Energy LLC agreed to acquire Parker & Parsley Petroleum Co.'s interests in certain oil and gas producing leases in the Permian basin, Gulf Coast, Midcontinent, and Rocky Mountain regions for $53 million. The interests represent more than 3,100 oil and gas wells in mainly nonoperated properties.

PETROCHEMICALS

IRAN soon will start up a $180 million polyvinyl chloride unit at its Bandar Imam petrochemical complex that will boost the country's output enough to meet domestic demand. The 175,000 metric ton/year unit will bring Iranian PVC production to 200,000 tons/year.

SAUDI BASIC INDUSTRIES CORP. (Sabic) signed a contract to sell 120,000 metric tons/year of methyl tertiary butyl ether to Pakistan. Sabic in recent years sold a total 180,000 tons of MTBE to Pakistan.

CANADA'S Export Development Corp. signed a commercial loan agreement with a combine of Pak-Fauji Fertilizer Co. and Jordan Fertilizer Co. The agreement will provide as much as $30 million in financing in support of Canadian equipment and services being supplied by Klockner Stadler Hurter Ltd. (KSH), Montreal, toward construction of a $250 million granulated urea/diammonium phosphate fertilizer complex at Port Qasim, Pakistan.

TAIWAN'S Chi Mei Industrial Corp. will defer a planned $94.5 million investment in a proposed petrochemical plant in mainland China. The postponement stems from delay in construction of a refinery and naphtha cracker at Dayawan, China, which would result in a lack of feedstock for Chi Mei's proposed acrylonitrile-butadiene-styrene and polystyrene units. The project is one of several Chi Mei plans in China at a combined cost of $1 billion.

CHI MEI completed plans for construction of a $59.3 million, 120,000 metric ton/year thermoplastic elastomer plant in Taiwan.

TAIWAN'S Kaohsiung County government is considering a ban on construction of more petrochemical plants in the county. County Chief Yu Cheng-hsien said that while almost 60% of Taiwan's petrochemical plants are in the county, it receives very little of tax revenues the industry generates, while the county must incur pollution costs he attributes to the petrochemical industry.

PIPELINES

FEDERAL ENERGY REGULATORY COMMISSION ruled the owners of the Trans-Alaska Pipeline System cannot recover $117 million in settlement and litigation expenses relating to the 1989 Exxon Valdez oil spill through rates. FERC will allow the owners a chance to seek recovery of the expenses through another accounting method.

HOWELL CORP., Houston, closed its purchase of crude oil pipeline systems and storage facilities from Exxon Pipeline Co. for $63.5 million (OGJ, Mar. 6, p. 39).

SOUTHERN NATURAL GAS CO., Birmingham, Ala., this month plans to seek a FERC permit to expand its northern main line by 26 MMcfd by November 1996 to serve firm transportation customers in Alabama, Georgia, and Tennessee. In addition, Sonat declared an open season through July 31 to seek requests for further firm gas transportation services and for new liquefied natural gas service. The latter is to be provided by an LNG storage terminal near Savannah, Ga., operated by a subsidiary. Facilities built as a result of the open season are to be in service by November 1997.

LUBRICANTS

CHEVRON CHEMICAL CO. started feasibility engineering and final site arrangements for a world scale plant to manufacture chemical additives for lubricants and fuels in Singapore. Chevron's Oronite additives division will operate the export oriented plant through its Chevron Chemical (Far East) Pte. Ltd. at Pulau Sakra on Jurong Island. Construction is to begin in early 1996, with start-up eyed for 1998.

LPG

CHEVRON NIGERIA LTD. let a $70 million turnkey contract to a venture of ABB Randall and France's Entrepose-Montalev to built a liquefied petroleum gas extraction plant at Escravos, Nigeria. It is part of the LPG recovery project involving gas from offshore Okan field, with LPG produced for domestic use, the first such project in Nigeria.

COGENERATION

PETROLEUM AUTHORITY OF THAILAND (PTT) signed a long term contract valued at $34.2 million/year to supply 30 MMcfd of gas to Amata Power Co. for its 150,000 kw cogeneration plant under construction at Chacheongsao, Thailand. Deliveries, to continue for 10-15 years, are to begin in August 1996. Amata is a venture of Thailand's Bangpakong Industrial Park plc and B. Grimm Engineering System plc. PTT estimates natural gas demand in Thailand for such independent power projects in the next few years will reach the equivalent of 1.5 million kw. The state company has earmarked 250 MMcfd of supply to meet that demand.

EXPORTS-IMPORTS

INDIA'S oil import bill is expected to jump by at least 15% the next 2 years, predicted India's parliamentary committee on petroleum. Although Indian oil production has made significant gains the past 2 years, the committee estimates domestic oil demand will average about 1.58 million b/d in 1996-97 vs. projected domestic oil production of about 880,000 b/d.

NIGERIA expects to begin exporting 100,000-150,000 b/d of crude to South Africa this month, as the Nigerian government strikes down official bans on exports to South Africa, a holdover of the international embargo prior to the end of apartheid there. Several ministries became involved in eliminating the bans after Shell Petroleum Development Co. sought clarification from the petroleum ministry and permission to load a tanker destined for South Africa.

GAS UTILITIES

SEVEN local distribution companies (LDCs) formed the East Coast Natural Gas Cooperative LLC to increase supply reliability and cut gas supply costs. Members, including affiliates, are Baltimore Gas & Electric Co., Delmarva Power & Light Co., NUI Corp., PECO Energy Co., Pennsylvania Gas & Water Co., Southern Connecticut Gas Co., and Washington Gas Light Co. Consolidated Edison of New York Inc. is expected to join the next few months. Immediate plans call for buying gas for April-October to replenish storage and meet spot supply needs.