INDUSTRY BRIEFS

Aug. 14, 1995
PT Asia Pacific Petroleum (APP), Jakarta, South Korea's Daewoo Corp., and Australia's Austrade agreed to build a $1.5 billion, 150,000 b/d export refinery at Situbondo, East Java. Daewoo is to begin construction within 6 months and complete the project in 3 years. The refinery will process Middle East crude. APP is controlled by Indonesian President Suharto's son Bambang Trihatmojo. Austrade is an agency of Australia's Department of Industry & Technology. Koch Refining Co.,

Refining

PT Asia Pacific Petroleum

(APP), Jakarta, South Korea's Daewoo Corp., and Australia's Austrade agreed to build a $1.5 billion, 150,000 b/d export refinery at Situbondo, East Java. Daewoo is to begin construction within 6 months and complete the project in 3 years. The refinery will process Middle East crude. APP is controlled by Indonesian President Suharto's son Bambang Trihatmojo. Austrade is an agency of Australia's Department of Industry & Technology.

Koch Refining Co.,

Houston, purchased Kerr-McGee Corp.'s 104,000 b/d Corpus Christi, Tex., refinery for an undisclosed sum. It is the last of three refineries Kerr-McGee has sold this year in a plan to exit the refining/marketing business (OGJ, Aug.7, p. 38).

Drilling-production

Norway's

Den norske stats oljeselskap AS plans in early August to spud the first of 18 production wells in West Sleipner field with the West Epsilon jack up under a $290 million drilling contract let to Smedvig AS, Stavanger. The contract, expected to run for 4 years, is said to be the largest of its type in Norway. West Sleipner is to start up in spring 1996.

Texas Supreme Court

remanded to a trial court a case brought by Tennessee Gas Pipeline Co. (TGP) against Tesoro Petroleum Corp., Coastal Corp., and KCS Energy Inc. over a 1979, 20 year gas purchase contract involving Bob West field in South Texas. The higher court affirmed a contract purchase price of $8.59/Mcf and remanded the case to determine TGP's take or pay volumes under the contract. However, it ruled in favor of TGP that the contract is an output contract, and thus increased volumes tendered exceeded those allowed under such a contract. The defendants will ask the higher court for a rehearing on the output contract issue.

Syria's

Al Furat Petroleum Co. regained control Aug. 5 of El Isba 123 development well, which blew out May 3 and caught fire June 10, killing five firefighters (OGJ, June 19, p. 28). License partner Syria Shell Petroleum Development BV said the well was brought under control by injecting heavy drilling fluids, cement, and sealing chemicals through two relief wells drilled 700 m away to intercept El Isba 123 at 3,000 m.

Tullow Oil plc,

Dublin, received approval from Pakistan's government to use gas produced from its Block B and East Kandhkot discoveries to supply a nearby private power generation project. Tullow holds a 5% interest in Liberty Power Ltd., which plans to build a 470,000 kw power plant on a phased basis. A 150,000 kw plant is to be on line in April 1996.

ARCO British Ltd.

bought from Purbeck Exploration Ltd. a 25% interest in U.K. North Sea Blocks 43/22a and 43/17c. Both are operated by Talisman Energy (U.K.) Ltd., London. Block 43/22a holds two Carboniferous gas discoveries, while Block 43/17c is undrilled.

Comstock Resources Inc.,

Dallas, closed its purchase of oil and gas producing leases and gas gathering systems in East Texas and North Louisiana from Sonat Exploration Co. for $50.6 million (OGJ, May 8, p. 30).

Cross Timbers Oil Co.,

Fort Worth, closed its purchase of gas producing leases, a gathering system, and a gas processing plant in the Hugoton area of Kansas and Oklahoma for $121 million (OGJ, Apr. 24, p. 44).

HarCor Energy Inc.,

Houston, will spend as much as $20.5 million on development drilling and purchase of leases interests in its operating areas the next 12 months. Involved are as many as 63 gross infill drillsites in California's San Joaquin basin. It recently purchased a carried working interest in 13 producing wells and has more than 160 proved infill drillsites there. Also on tap are development drilling and other work on Permian basin and South Texas leases.

Global Natural Resources Inc.,

Houston, signed an agreement under which two more oil fields in Russia's Tatarstan republic will be awarded to Tatex, a 50-50 venture of Global's Texneft unit and state owned Tatneft. Twenty one wells have been drilled, logged, and tested in the undisclosed fields. Initial work calls for acquiring 2D seismic across both fields, with selected areas of 3D coverage to define exploratory potential and support a development program. Work is to get under way in the fourth quarter.

Falcon Drilling Co. Inc.,

Houston, agreed to buy five bottom supported drilling rigs from Sonat Offshore Drilling Inc. for $37.9 million. Under an agreement with Panhandle Eastern Corp. and its Dixilyn-Field Drilling Co. unit, 30% of net proceeds from the sale is payable to Dixilyn-Field.

Taurus Exploration Inc.,

Birmingham, Ala., signed a 31/ 2 year agreement with Sonat Exploration Co. to jointly acquire U.S. oil and gas reserves. Taurus committed to $30 million for possible acquisitions in 1995 and expects to invest $25-50 million/year thereafter, exclusive of development drilling costs. Sonat will be operator.

Reading & Bates Corp.,

Houston, completed the $140 million conversion of a second generation semisubmersible rig into the Nanhai Tiao Zhan floating production system for service in Amoco Orient Petroleum Co.'s Liuhua 11-1 oil field in the South China Sea off China.

Companies

Star Oil & Gas Ltd.,

Calgary, started a takeover bid for Northern Reef Exploration Ltd., also of Calgary. Penn West Petroleum Ltd., Calgary, was the initial bidder for Northern Reef. Star, a unit of Virginia's United Co., is offering $75 million (Canadian) cash or $1.75/share. It must have two thirds of shares pledged to proceed with the offer. Penn West has offered $1.70/share or 1.8 Penn West shares for every seven Northern Reef shares. Penn West limited its offer to $21.5 million cash and $25.5 million in shares.

Exploration

Santa Fe Energy Resources,

Houston, 1 Northeast Betara wildcat on the Jabung block in Sumatra cut 134 ft of hydrocarbon bearing sands at 4,908-5,164 ft. Tests of three intervals totaling 84 net ft of pay yielded a combined 22 MMcfd of gas, with 55% carbon dioxide content, and 420 b/d of condensate.

Unocal Indonesia Co.

1 Seguni wildcat in the Mahakam Delta area off East Kalimantan cut 417 ft of hydrocarbon pay in 12 zones, including 144 ft of oil pay. The well flowed on two drillstem tests a combined 33 MMcfd of gas and 2,735 b/d of oil from zones at 12,615-12,703 ft and 12,080-12,170 ft. Unocal plans to drill several delineation wells and acquire more 3D seismic data to define the field's northern extent. It is considering an early production system with three development wells drilled from the 1 Seguni site, using existing pipelines and production facilities in its nearby Sepinggan field.

Chevron Overseas Petroleum Ltd.

signed a 2 year geophysical agreement with China National Offshore Oil Corp. to explore the 3,300 sq km Block 50/20 in the gas prone area of the South China Sea, 60 km southwest of Hainan Island. Seismic surveys are to get under way in early 1996 on the block, which adjoins Chevron's exploration Block 62/23.

Marathon Petroleum Hibernia Ltd.

moved the Kan Tan IV semisubmersible to Block 48/25 off Ireland to drill a new pool wildcat on its West Kinsale prospect, reported license partner Petroceltic plc, Dublin. The prospect is on the southwest lobe of Kinsale Head gas field. This follows two dry holes in a row for Marathon off Ireland.

Arch Petroleum Inc.,

Fort Worth, spudded 1-320 Summerour wildcat on the Sherman/Dallam county line in the Texas Panhandle. The well will test multiple pays en route to 7,000 ft. Arch has a leasehold of more than 70 sq miles in the prospect area on the west flank of the Anadarko basin and next to the western edge of Hugoton gas field. It also plans to drill 3D generated prospects on its Yates Ranch acreage in Jack and Wise counties, Tex., and on its Stonewall County, Tex., acreage. All three wildcats are to be drilled by yearend.

Diamond Shamrock Boliviana Ltd.

(DSBL) placed its Nupuco X101 discovery on production in South Bolivia's Gran Chaco province in Tarija department. It is flowing 20 MMcfd of sweet gas and 400 b/d of 70 condensate from five commercial gas zones. DSBL, a venture of Diamond Shamrock Inc., San Antonio, and Austrofueguina SA, Buenos Aires, plans to drill an appraisal well at Nupuco by yearend and will lay a 45 km gas pipeline to DSBL's 45 MMcfd gas processing plant in Porvenir field.

Pecten International Co.

and EDC Senegal Ltd. 50-50 signed a convention with Senegal's government to explore the 1.3 million acre Dome Flore block in the Atlantic Ocean off Senegal, reported EDC Senegal parent Energy Development Corp., Houston. Pecten, a unit of Shell Oil Co., will be operator. A wildcat is to get under way by yearend.

Pipelines Norway's

Den norske stats oljeselskap AS and partners in the NorFra gas trunk pipeline planned to move Norwegian gas to Dunkirk, France, chose a starting point at the 16/11-E riser platform off Norway. This option was deemed cheaper and more flexibile long term than starting NorFra from the East Sleipner field riser platform. NorFra partners recommended to Norway's Ministry of Industry & Energy that the pipeline be 42 in. diameter vs. 40 in. as first envisaged. NorFra is to be laid in summer 1997.

NGC Corp.

affiliate NGC Oil Trading & Transportation Inc. closed its purchase of Kerr-McGee's 1,300 mile crude oil gathering system in Oklahoma.

Petrochemicals

Taiwan's

Central Bank of China agreed in principle to provide financial support for the $7.5 billion naphtha cracking/refining complex a Chinese Petroleum Corp. (CPC) led Taiwanese group plans to build in Taiwan. It will be Taiwan's eighth naphtha cracker and have refining capacity of 200,000 b/d. CPC and Koo's Group each will control 35% of the project, with Lee Chang Yuung Chemical Corp. holding 10% and 16 other partners combined holding 20%.

CPC

is about to sign an agreement to move its second naphtha cracker, mothballed in 1994, to Indonesia. Moving the plant would cost $300 million, and another $200 million would be needed for other facilities at the new site. CPC expects to hold a 30% interest in the project, with Taiwanese partners controlling at least 20% and Indonesian partners the rest. When it was shut down, the cracker was producing 230,000 metric tons/year of ethylene. Although some downstream users have asked CPC to restart the plant, that option met strong local opposition.

Shell Chemical Co.

let contract to ABB Lummus Global, Bloomfield, N.J., for engineering, procurement, and construction management of an ethylene furnace at its Norco, La., petrochemical complex. Shell declined to disclose the size of the furnace but said it will be large. The unit will use an ABB Lummus heat transfer furnace and Lummus' SRT technology. Completion is slated for April 1996.

ARCO Chemical Co.

began engineering on two propylene oxide (PO) projects. Included are an expansion of ARCO's Channelview, Tex., PO/styrene monomer plant, scheduled for completion by early 1998, and a new world scale PO plant to be built at Rotterdam and slated for start-up in 2000. Final approval for the projects will be based on engineering studies, permit approvals, and successful conclusion of some commercial arrangements.

Pennzoil Products Co.

and Venezuelan partners Maraven SA and Puramin formed a venture to build a $42 million plant on Venezuela's Paraguana Peninsula to produce 15,000 metric tons/year of white oils, 25,000 tons/year of aliphatic solvents, and 20,000 tons/year of special oils for electric transformers. It will be fed by olefins and aromatics from Maraven's nearby Cardon refinery, with start-up set for 1996. Maraven is negotiating similar projects using Cardon refinery streams for feedstock, including a propylene project with Enron Corp. and two Venezuelan partners and other ventures with Unocal Corp. and Mobil Corp.

U.S. Environmental Protection Agency

granted Molten Metal Technology Inc. (MMT), Waltham, Mass., best demonstrated available technology (BDAT) status for its catalytic extraction processing (CEP) technology for pollution prevention and recycling. This certifies CEP for processing chlorinated hydrocarbon waste streams, including wastes from manufacture of polyvinyl chloride and other chlorinated plastics.

BASF AG

named ABB Lummus Global main contractor for a dehydrogenation section with capacity to produce 245,000 metric tons/year of styrene monomer at Antwerp. Lummus will provide styrene technology, basic and detailed engineering, procurement, and construction for the unit, slated for start-up in fourth quarter 1996.

Tae Kwang Industrial Co.

(TKI), Seoul, licensed UOP's Oleflex and Huels selective hydrogenation processes for a 250,000 metric ton/year propylene plant to be built at Ulsan, South Korea. Propylene product will feed TKI's acrylonitrile plant under construction at Ulsan. The propylene plant is to begin production in early 1997.

Oilsands

A $7.2 million test

of a new bitumen extraction system in North Alberta was postponed by problems in obtaining a drilling rig. Two pairs of horizontal wells at the Alberta Oil Sands Technology & Research Authority underground test facility were rescheduled for late October or early November. They originally were planned for this summer.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.