Drilling/Production news briefs, Mar. 15

Oceaneering International Inc., Houston, said its affiliate Marine Production Systems do Brazil (MPS) has a letter of intent from Halliburton to supply subsea umbilicals for Barracuda and Caratinga fields in the Campos basin off Brazil.

Under terms of the proposed $30 million contract, Oceaneering will supply 171 km of production control and water injection umbilicals. Fabrication will be at the MPS Rio de Janeiro plant. Once the contract is finalized, Oceaneering expects to deliver the umbilicals in September 2002.

Black Hills Corp., Rapid City, SD, plans to buy operating and non-operating interest in 74 gas and oil wells from Stewart Petroleum Corp., Denver. The deal is expected to be worth $10 million although final terms remain subject to additional due diligence. Black Hills estimates the transaction represents proved reserves of 10 bcf equivalent of gas. The acquisition is expected to increase Black Hills' proved reserves by 22% and its current product rates by 10%. Closing is expected by the end of the second quarter.

Statoil A.S., Norway's state-owned oil company, said Thursday it plans to divest its business in China as part of its corporate strategy to focus on its core business areas elsewhere. Statoil's subsidiary, Orient Inc., will withdraw from China as soon as it finds buyers for its 75% stake in Lufeng 22-1 oil field in the South China Sea. Lufeng began production in December 1997. Currently producing 10,000 b/d, Lufeng's production peaked at 60,000 b/d in 1998.

Forest Oil Corp., Denver, Thursday lowered its production forecast for the first quarter. A news release said the estimated average daily production for the quarter will be 470-480 MMcfd equivalent compared with the original forecast of 480-510 MMcfd equivalent. Production has been adversely impacted by numerous factors, including temporary pipeline failures and constraints as well as harsh weather in the Gulf of Mexico, Alaska and Canada. For the full year 2001, Forest Oil is maintaining its estimate of 510-550 MMcfd equivalent.