INDUSTRY BRIEFS

Dec. 9, 1996
Tuntex Group, Taipei, said a final decision to proceed with a planned $10 billion petrochemical project in South Africa must wait until the Taiwanese government decides what policy it will follow once South Africa severs diplomatic relations with Taiwan at yearend 1997. Under a preliminary agreement drawn up in September, Taiwan and South Africa would each contribute $5 billion to the project. Tuntex agreed to invest $3 billion, with another $2 billion to come from other Taiwan investors,

Petrochemicals

Tuntex Group, Taipei, said a final decision to proceed with a planned $10 billion petrochemical project in South Africa must wait until the Taiwanese government decides what policy it will follow once South Africa severs diplomatic relations with Taiwan at yearend 1997. Under a preliminary agreement drawn up in September, Taiwan and South Africa would each contribute $5 billion to the project. Tuntex agreed to invest $3 billion, with another $2 billion to come from other Taiwan investors, including Chinese Petroleum Corp. and an investment arm of the ruling Nationalist Party.

Marketing

Nippon Oil Co., Japan's largest oil company, and U.S. fast-food chain McDonald's agreed to jointly open McDonald's outlets at about half of Nippon Oil's 10,000 gas stations by 2006. Deal is designed to attract more customers to Nippon Oil's outlets, currently facing stiff price competition because of continuing deregulation of Japan's downstream petroleum sector (OGJ, Aug. 26, p. 31). Under the agreement, McDonald's Japan will open four or five outlets on a trial basis next year and begin expansion in 1998.

Companies

J.L. Holloway Holdings Inc., Jackson, Miss., purchased the offshore drilling rig design company Friede & Goldman Ltd., New Orleans. Friede & Goldman will remain an independent company and be funded to conduct a multimillion-dollar R&D effort on new jack up and semisubmersible designs, with an emphasis on deepwater drilling/harsh environment jack ups and mobile production units.

Sweden's Preem Petroleum AB, formerly OK Petroleum, agreed to acquire the Swedish heating oil and diesel fuel business of Du Pont Conoco Nordic, which trades under the Jet brand name.

Safety

National Transportation Safety Board is investigating a Petroleum Helicopters Inc. (PHI) helicopter crash Nov. 28 in the Gulf of Mexico that killed the pilot and two oil and gas company employees on board. Helicopter was recovered from about 50 ft of water on High Island Block A-20, about 40 miles southeast of Galveston, Tex. PHI said the incident occurred as the pilot was attempting to land on the nearest platform, operated by Forest Oil Corp., after detecting a mechanical problem during flight. The helicopter was not working for Forest. PHI did not identify the non-PHI personnel's employer. Platform, unmanned at the time, sustained minor damage to a control building.

Drilling-production

Marine Drilling Cos. Inc., Sugar Land, Tex., reported four rig workers sustained minor injuries during a fire Nov. 27-28 on its Marine 15 jack up working for Tana Oil & Gas Corp., Corpus Christi, on West Delta Block 58, about 15 miles off Louisiana. Rig, rated to 20,000 ft in 250 ft of water, was to be moved to a shorebase for repairs and will be out of service less than 6 months. Cause is under investigation, and damage estimates were not disclosed.

U.S. Export-Import Bank agreed to loan about $300 million to Ghana National Petroleum Corp. (GNPC) for development of Tano oil and gas fields off Ghana supported by U.S. equipment and services. Main U.S. suppliers will be Continental Engineering & Construction Services, Lafayette, La., and Westinghouse Electric International Co., Orlando, Fla. Financing will be used to build offshore infrastructure to begin production of North and South Tano fields. GNPC estimates output at 12,000 b/d of oil and 30 MMcfd of gas. Project will include a barge-mounted power plant between Effasua and Mangyea along Ghana's western coast (OGJ, May 2, 1994, p. 137).

Oryx Energy Co., Dallas, commenced production from additional development from its Patton, Sherman, Brazos, and Matagorda fields in the Gulf of Mexico. Combined initial production from new D platform on High Island Block 385 and E platform on High Island Block 379 totals 51 MMcfd and 1,450 b/d of condensate. Patton development project involves five platforms on High Island Blocks 378, 379, 384, and 385. At Sherman, Oryx disclosed 2 High Island 576 well tested 24 MMcfd of gas and 2,300 b/d of condensate. Oryx is operator and 100% owner of the fields. On Brazos Block A-21, 51% Oryx-owned, another Oryx-operated development well produced 10 MMcfd initially.

Elf Exploration Angola let a $35 million contract to Stolt Comex Seaway SA (SCS), Aberdeen, and Petroleo Brasileiro SA unit Brasoil for engineering, procurement, installation, and commissioning, drilling, and tieback of two wells in 100 m of water in Oombo field off Angola. In 1997, Brasoil will drill and complete the wells, and SCS will install rigid flowlines, umbilicals, risers, control systems, and subsea structures.

Oryx U.K. Energy Co. let an $8 million contract to SCS for supply and installation of 7.7 km of 6-in. NKT flexible flowline in 150 m of water to provide fuel gas for Hutton tension leg platform and a flexible riser and subsea installation valve. NKT Cables, Denmark, will supply flowline. Work will be done in April 1997.

BP Exploration

Operating Co. Ltd. drilling contractor Smedvig Offshore Europe Ltd., Aberdeen, let contract to BJ Tubular Services Ltd., Aberdeen, for running services for screen liners, casing, and chrome completions. The 3-year contract will involve work on as many as 29 wells Smedvig will drill from BP's Harding platform on U.K. North Sea Block 9/23b. The new award follows work on three Harding development wells by Smedvig and BJ Tubular.

Exploration

Saga Petroleum AS, Oslo, is negotiating an undisclosed deepwater exploration license off Angola. Saga already holds a 14% interest in Block 1 off Angola, operated by Royal Dutch/Shell Group, where Saga said hydrocarbons have been discovered in one of two wells. The new block is in more than 1,000 m of water. Government is expected to announce license awards in 1997. Deadline to apply for new acreage was Nov. 29.

TransTexas Gas Corp., Houston, found oil with its 2-4 Dinsdale offset to its 1 Heart River Williston basin discovery at Dickinson, N.D. Logs indicated a 140 ft oil column. The 1 Heart River flowed 6,355 b/d of oil-a record for North Dakota, TransTexas claims-through a 64/64-in. choke at 450 psi flowing tubing pressure. An earlier test yielded 4,500 b/d of 41° gravity oil through a 44/64-in. choke at 575 psi flowing tubing pressure from Mississippian Lodgepole. The 1-3 Dinsdale delineation is to spud immediately. TransTexas has about an 80% average working interest in about 200,000 acres in Stark, Billings, and Dunn counties.

Marathon Oil Co., Houston, temporarily suspended 1 Ewing Bank 917 discovery on its Oyster prospect in 1,185 ft of water on Ewing Bank Block 917, about 130 miles south of New Orleans, pending design and installation of subsea equipment. Well, drilled to 12,300 ft TD, found oil below 11,500 ft. It will tie back as a single-well development to Ewing Bank Block 873 platform, owned by Marathon and Texaco Exploration & Production Inc. Reserves are pegged at about 10 million bbl of oil equivalent. Production is to start early in 1998. Rig, Diamond Offshore Drilling Inc.'s Lexington semi, moved 3 miles south to delineate the companies' 1996 Ewing Bank Block 963 discovery.

Trego Energy Inc., Calgary, signed a letter of intent with Niger for a 10-year petroleum exploration permit. Trego has a 40% interest in TG World Energy Inc., which will get rights to explore 26,257 sq miles of an extensive basin rift system.

LNG

Petroleum Development Oman LLC let a $380 million lump sum, turnkey contract to a group of units of Bechtel Corp., Snamprogetti SpA, and Galfar Engineering & Contracting of Oman for upstream facilities for Oman's $1.4 billion gas field development project supporting Oman's liquefied natural gas export project (OGJ, Nov. 4, p. 43). Scope of work will include wellhead facilities at Barik and Saih Rawl field in central Oman, a gathering station at Barik, and a central processing plant at Saih Rawl. Gas will be sent by a 360 km pipeline to the 6.6 million metric ton/year LNG plant being developed at Sur.

Tankers

Sweden's ICB Shipping AB and Niarchos Group of Greece let separate contracts for shipbuilding orders totaling $280 million to South Korea's Daewoo Heavy Industries Ltd. Daewoo will build two 300,000 dwt oil tankers for Niarchos and two 160,000 dwt oil tankers for ICB. Delivery is due late in 1997.

Pipelines

Japan Petroleum Exploration Co. Ltd. (Japex) is weighing feasibility of a 1,700-mile natural gas pipeline connecting Russia's Sakhalin Island gas fields with a site near Tokyo. Japex believes a pipeline costing as much as $4.5 billion may be cheaper than shipping the gas in tankers as LNG and is looking into the idea with four Japanese steelmakers. Japanese and other firms that are partners in the Sakhalin Energy Investment Co. Ltd. joint venture recently updated plans for appraisal and development of Sakhalin offshore reserves (OGJ, Dec. 2, p. 40).

Canada's National Energy Board approved a $900 million (Canadian) system expansion program in 1997 for TransCanada PipeLines Ltd., Calgary. The program will add about 287 MMcfd capacity to TransCanada's gas system, which now moves about 6 bcfd from western Canada to eastern Canada and the U.S. TransCanada expects to move about 2.46 tcf in 1997, up from 2.43 tcf in 1996. TransCanada says tolls may drop by 6% in 1997 as a result of higher volumes and an incentive rate tolling agreement signed with producers.

U.S. Department of Energy approved import-export authorization for Maritimes & Northeast Pipeline LLC for as much as 636 bcf of gas for a 2-year term. Decision marks the first major regulatory approval needed to move forward with the next leg of the pipeline, said PanEnergy Corp., which manages the U.S. portion of the $975 million, 729-mile project to bring gas from Sable Island area off Nova Scotia to New England. U.S. project sponsors filed in September for FERC approval of Phase II of the project, slated to begin deliveries late in 1999 (OGJ, Sept. 30, p. 33).

U.S. Transportation Department's Research and Special Programs Administration will hold a hearing Jan. 29 in New Orleans on how spill response plans for onshore oil pipelines could be improved. Among other things, the meeting will discuss recommendations the National Transportation Safety Board made this year.

India's Bongaigaon and Barauni refineries were shut down indefinitely after three oil pipelines in Assam exploded and ruptured Nov. 28. Oil India Ltd. (OIL) said sabotage by a militant group was suspected in the explosions, which cut off supply to the refineries. Two of OIL's pipelines at Bijulighat and one Indian Oil Corp. pipeline were damaged.

Power

Enron Corp., Houston, closed a deal with Italy's Saras SpA Raffinerie Sarde (Saras) for a joint venture to build a $1.35 billion, 551-MW integrated gasification combined-cycle power plant at Saras' Sardinia refinery (OGJ, Oct. 21, p. 33). Saras will provide process residues that will be used to fuel three combined-cycle turbines. Power will be sold to Italy's state-owned utility under a 20-year purchase agreement. Construction is slated for completion in 1999. Interests are Saras 55%, Enron 45%.

Gas processing

Saudi Arabian Oil Co. and Aramco Services Co. let contract to units of Parsons Corp., Pasadena, Calif., for design engineering, procurement, and project and construction management of a grassroots gas plant at Hawiyah in Saudi Arabia's Ghawar field. Contract value and plant capacity were not disclosed, but industry sources estimated total project cost at $2 billion. Project will include gathering manifolds and transmission pipelines, as well as gas sweetening, sulfur recovery, condensate stabilization, sour water stripping and dehydration units.

Coastal Corp. unit Coastal Field Services Co. acquired the remaining 50% it did not already own of a gas processing plant near Custer, Okla., from Hydrocarbon Processing of Oklahoma Inc. The plant is running at capacity of 200 MMcfd. Plans call for upgrading inlet volumes and expanding capacity as needed. Also, Coastal Field Services signed a 10-year deal with Anadarko Gathering Co. to process as much as 35 MMcfd at the Custer plant.

Gas distribution

Mexico's Energy Regulatory Commission will seek bids for natural gas distribution concessions in Sonora state's largest cities: Hermosillo, Guaymas, and Empalme. The government recently created another gas distribution zone in Nuevo Laredo and gave Repsol Mexico SA de CV rights to supply that area (OGJ, Nov. 25, p. 37). The Energy Secretariat estimates demand in the area at 104 MMcfd, including 83 MMcfd for a power plant at Guaymas. Hermosillo accounts for 43% of the Sonora state's industrial and commercial activity, and is supplied via a 16-in. gas pipeline operated by Petroleos Mexicanos. The commission will hold meetings Jan. 29 and Feb. 26 on the bidding process.

Alternate fuels

European Commission issued a green paper intended to stimulate action in promotion of renewable energy sources in the European Union. It calls for a clear and realistic target to increase use of renewables beyond the current level of less than 6% of energy used. Next year, EC intends to present a comprehensive strategy for renewable energy, accompanied by an action plan. The announcement coincides with a World Energy Council claim that energy industry complacency could threaten development of renewable energy technologies (see Watching the World, p. 32).

Copyright 1996 Oil & Gas Journal. All Rights Reserved.