OGJ NEWSLETTER

July 9, 1990
A wildcat strike by Norwegian offshore workers that briefly slashed Norway's oil flow by almost 1 million b/d appears to have ended with little effect on oil markets. Decisive action by Phillips in Ekofisk field apparently halted the strike by about 1,000 Norwegian oil workers who defied union and government orders to return to work. The strike, which began July 1, cut Norway's output to 700,000 b/d from 1.67 million b/d and halted gas flow.

A wildcat strike by Norwegian offshore workers that briefly slashed Norway's oil flow by almost 1 million b/d appears to have ended with little effect on oil markets.

Decisive action by Phillips in Ekofisk field apparently halted the strike by about 1,000 Norwegian oil workers who defied union and government orders to return to work.

The strike, which began July 1, cut Norway's output to 700,000 b/d from 1.67 million b/d and halted gas flow.

Although the government declared the strike illegal and ordered arbitration, workers continued to block helicopters from landing on Ekofisk platforms. Phillips landed two aircraft July 5 after threatening to dismiss any workers obstructing the helipad, and the Ekofisk action was called off. Phillips said it would take about 18 hr to get Ekofisk output back to normal.

At OGJ presstime, workers on Statfjord and Gullfaks platforms were considering options in light of developments at Ekofisk. Not all Statfjord and Gullfaks platforms were affected by the strike, and Statoil managed to produce about 400,000 b/d.

Unaffected by the strike was Norsk Hydro, whose Oseberg platforms were shut down for 10 days' maintenance at the strike's start and were ramping up again last week.

Oil prices were expected to slip again late last week as API reports of higher U.S. crude stocks and the end to the Norwegian strike probably offset false rumors of an Israeli attack on Libya and an emergency meeting of OPEC ministers that had spiked prices earlier in the week. July 3 closings had Brent for July delivery at $16.25/bbl and Nymex WTI for August at $16.80/bbl, both little changed from the week before.

U.K.'s western offshore appears to have another major gas discovery. Hamilton 110/13-1 flowed 70 MMcfd of gas at stabilized rates from two zones in the Irish Sea 30 miles south-southeast of British Gas' Morecambe gas field.

Interests are Hamilton 45%, Ultramar 30%, and Monument Resources 25%. In May, BG gauged 89.9 MMcfd from its 110/2b well.

The worldwide offshore contract drilling industry will be operating at about 95% of capacity by 1994-95, with day rates rising to justify new rig construction, predicts Salomon Bros.

Utilization has jumped to more than 82% today from 53% in April 1987 as the number of rigs under contract climbed 157 to 575 and the supply fell 76 to 705.

The jack up market will improve more quickly than that for semis, and utilization and day rates will rise faster internationally than in the Gulf of Mexico, Salomon contends.

Hyundai says the U.S.S.R. has agreed to supply South Korea with Sakhalin Island gas via a pipeline across North Korea, Kyodo News Service reported.

South Korea would participate in Sakhalin gas development, and the Soviets are negotiating the pipeline with North Korea, which could also obtain Sakhalin gas. The Soviets also reportedly are mulling a subsea line from Sakhalin to Japan.

More change looms for Latin America's petroleum industry.

Venezuela is denying reports it wants to bolt OPEC. President Carlos Andres Perez rejected that notion as well as claims Venezuela is breaking its OPEC quota. Press reports in that country suggested top officials of state owned Pdvsa are unhappy over Venezuela's role in OPEC. Government estimates put Venezuela's crude production in the first quarter at 1.945 million b/d, within quota. Pdvsa Pres. Andres Sosa Pietri is pushing for changes in Venezuela's OPEC role, especially regarding quotas.

That sets Sosa up for a confrontation with Venezuelan Energy Minister Celestino Armas, whom Venezuelan oilmen deem ineffective in OPEC meetings. The resulting political uproar forced Pdvsa to take out ads assuring fealty to OPEC quotas and government policies. Perez wants a stronger Venezuelan role in OPEC by boosting reserves and productive capacity when reserves of some other OPEC members and top customer U.S. are sliding.

Peru's President-elect Alberto Fujimoro, taking office July 28, wants to strengthen Petroperu and attract foreign oil and gas investment. There are no detailed plans, but first order of business is sorting out continuing problems with current foreign investors. Those include slow payment in local currency for oil received from Occidental, 1988 cancellation of the contract with Royal Dutch/Shell Group after the big Camisea gas/condensate find in the southern jungle, and uncompensated 1985 expropriation of Belco Petroleum assets. Oxy, visiting with Fujimoro last month, says if it is to be involved in developing Camisea, it would have to be in association with Shell.

Bolivia plans to end the 50 year monopoly of state oil company YPFB, opening the way for joint ventures with foreign firms, under legislation slated for approval late last month.About 30 companies, mostly in the U.S., are negotiating Bolivian E&P deals, including risk contracts, Bolivian officials told attendees at a Latin American energy forum hosted by Houston InterAmerican Chamber of Commerce and sponsored by DOE and the U.S. trade and development program.

Also at that meeting, Pemex officials said restructuring of Mexico's state oil company could open opportunities for foreign oilfield contractors. Mexico is trying to attract about $4 billion in private energy sector investment but doesn't plan to remove bans against foreign ownership of oil and gas.

Alberta gas producers have extended export contracts with Alberta & Southern Gas to Aug. 1. Most suppliers rejected A&S' initial proposal, which called for a two tier pricing system in response to California pressures for price cuts (OGJ, June 25, Newsletter). Talks are continuing.

Canada has agreed to pay 35% of costs, or as much as $45.5 million, for engineering studies on the proposed $4 billion OSLO oil sands project in northern Alberta. Ottawa said in February it won't provide construction aid for the project but will honor an earlier commitment to share engineering costs.

Engineering studies are to be complete by yearend 1991.

The push grows for new marine terminals away from sensitive areas amid rising concern over tanker safety and oil spills. A U.S. unit of Trans Mountain Pipe Line, Vancouver, is applying to Washington state regulators to certify a site for a $500 million terminal on the Olympic Peninsula near Low Point, Wash. It would back out tanker traffic inbound through Strait of Juan de Fuca and outbound from Vancouver and handle crude destined for Washington refineries and Canadian oil exported from an existing Trans Mountain Vancouver terminal.

Trans Mountain first proposed the idea in 1981 to transport Alaskan oil to the U.S. Midwest.

Salvors last week returned the Mega Borg tanker to its owners, while investigators renewed efforts to find out why it exploded and caught fire June 8, killing four and injuring 17 (OGJ, June 18, p. 14). Small tar balls apparently from the tanker reached a Louisiana beach June 28.

Less than 4 bbl of crude had reached landfall by presstime last week, estimated O'Brien Oil Pollution Services Inc. (OOPS), Gretna, La., hired by crude owner Elf Trading Inc. to oversee cleanup. OOPS had skimmed about 17,000 bbl of oil-water emulsion by presstime, with 786,518 bbl of crude lightened for delivery to Crown Central in Houston and ARCO in Texas City, Tex., (OGJ, June 25, p. 26). Cargo at the time of the accident was about 885,000 bbl.

FERC's general counsel has ruled meetings between FERC officials and sponsors of the proposed Iroquois gas pipeline were not improper, clearing the way for FERC to decide at its July 25 meeting whether to approve the 370 mile, $583 million pipeline from Canada to Long Island, N.Y.

A District of Columbia federal appellate court has upheld EPA's ban on land farming petroleum wastes over API's challenge.

EPA claimed RCRA prohibited it from allowing petroleum wastes to be spread on land rather than placed in landfills or in impoundment structures.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.

Issue date: 07/09/90

BOOKS

Pipeline Intelligence Directory, published by Pipeline Intelligence Co., P.O. Box 1132, Bellaire, Tex., 77402-1132. $200.

This new directory contains a listing of pipeline companies and their engineering and construction personnel.

Enhanced Oil Recovery, II: Process and Operations, edited by E.C. Donaldson, G.V. Chilingarian, and T.F. Yen. Published by Elsevier Science Publishing Co. Inc., P.O. Box 882, Madison Square Station, New York, N.Y., 10159. 618 pp., $168.50.

This book reviews and summarizes state-of-the-art progress in the field of enhanced oil recovery. All of the available techniques are discussed and compared. It was written for classroom use in advanced studies of reservoir characterization and processes.

Topics include: Alkaline flooding, surfactant flooding, carbon dioxide flooding, steam flooding, in situ combustion, gas injection, miscible flooding, microbial recovery, and polymer flooding.

An Introduction to the Design and Behavior of Bolted Joints, by John H. Bickford. Published by Marcel Dekker Inc., 270 Madison Ave., New York, N.Y., 10016. 736 pp., $69.75.

This second edition of the book is published for all designers involved in joint and bolt design. It presents a broad-based essential review of factors affecting the design, assembly, and behavior of bolted joints in all industries. It provides detailed coverage of torque, torque-turn, stretch, tension, and ultrasonic assembly options, as well as fatigue, corrosion, self-loosening, mechanical, and leakage failure modes and their avoidance.

Exploration Stratigraphy, second edition, by Glenn S. Visher. Published by PennWell Publishing Co.-Book Division, P.O. Box 1260, Tulsa, Okla., 74101. 446 pp., $79.95.

This comprehensive and well-illustrated new edition outlines the principle new stratigraphic concepts for exploration of hydrocarbon accumulations.

Building upon the model framework, environmental interpretations, and mapping of facies patterns, the author adds concepts useful for predicting time and place for the occurrence of particular stratigraphic response patterns. This edition also includes a chapter on fluvial systems and nearly 300 new illustrations.

1990 Canadian Oil Industry Directory, published by PennWell Publishing Co. -Book Division, P.O. Box 1260, Tulsa, Okla., 74101. 261 pp., $65.

This is the first update of the directory since 1984. It provides a complete listing of oil companies operating in Canada. Included are exploration and production companies, drilling contractors, service and supply companies, pipeline operators, refiners and gas processors, petrochemical plants, engineering and construction firms, associations, and government agencies.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.