INDUSTRY BRIEFS

REFINING

SOUTH KOREA'S export import bank will lend $60 million for the rehabilitation of Ghanaian Italian Petroleum CL's 28,000 b/sd Tema, Ghana, refinery. The project is the first phase of a $250 million modernization program expected to increase plant capacity to 45,000 b/sd.

PENNZOIL PRODUCTS CO. and Petrolite Corp's polymers division agreed to team up to provide a line of wax products to U.S. and international buyers of paraffin, microcrystalline, and related synthetic waxes. Pennzoil will invest more than a combined $23 million at its 15,700 b/cd Rouseville, Pa., refinery and nearby Reno, Pa., packaging plant.

U.S. DEPARTMENT OF ENERGY'S board of contract appeals ruled in favor of Golden West Refining, Kern Oil & Refining Co., Lunday Thagard Co., and Sunland Refining Corp. who sued DOE for a combined $869,426, without interest, for forcing them to buy Elk Hills crude in April 1992. Their purchases occurred when the four small refiners could have bought crude on the open market for much less.

FORTUNE OIL PLC, London, intends to expand in China by ownership of infrastructure but not by ownership of a refinery as reported last month (OGJ, Aug. 15, p. 42). Fortune's current projects include a single point mooring for crude oil imports and a liquefied petroleum gas plant. The company is helping fund installation of a cracking unit at Maoming refinery, for which it will receive cash repayments and guaranteed processing of crude for its own sales.

UZBEKISTAN'S 107,120 b/cd Fergana refinery is to be studied for potential rehabilitation by KBC Process Technology Ltd., Weybridge, U.K. The study, funded by European Bank for Reconstruction & Development, will determine the best rehabilitation program for the plant and viability of a proposed desulfurization project.

COMPANIES

CANADIAN 88 ENERGY CORP., Calgary, offered $208 million (Canadian), or $1.65/share, for outstanding common shares of Texaco Canada Petroleum Inc. Canadian 88, which owns 9.9% of the Texaco unit, or about 44% of outstanding minority shares, is competing with Texaco Inc. for the Canadian unit shares. Texaco Inc. owns 78% of the Canadian unit and has offered $1.40/share (OGJ, Sept. 5, p. 46).

A FEDERAL DISTRICT COURT upheld the right of Sonat Inc. unit Southern Natural Gas Co., Birmingham, Ala., to end an offshore gas purchase contract with Exxon Corp., effective last Mar. 1. Southern Natural cited unacceptable terms of linking Exxon's gas supplies off Louisiana to Southern Natural's interstate pipeline system.

UNITS of Mobil Corp. and Husky Oil Ltd., Calgary, are setting up a joint operation to expand markets for motor transport and industrial lubricants. Mobil Lubricants Canada Ltd. and Husky will share market development in central and western Canada.

CONSUMERS POWER CO., a unit of CMS Energy Corp., Dearborn, Mich., is undergoing a reorganization that calls for separate electrical power and natural gas businesses. The new units are planned to be in operation in about 3 months.

SHAREHOLDERS approved a merger of Aztec Resources Ltd. and International Oiltex Ltd., both of Calgary. The company will continue under the Aztec name. The merged operation will have gas production of 7.5 MMcfd and oil production of 1,100 b/d.

SIBERIA FAR EAST PETROLEUM CO. (Sidanco) and Japan's Marubeni Corp. agreed to form a joint venture to market Sidanco crude oil and refined products in the Asia Pacific region. Marubeni also will be an agent for Sidanco in purchasing equipment in Japan. Sidanco is Russia's second biggest oil company after Lukoil,

EXPLORATION

INPUT/OUTPUT INC. unit Output Exploration Co. Inc., Stafford, Tex., signed an exclusive geophysical/lease option agreement covering 104,000 acres of the Kenedy Ranch in Kenedy County, Tex. The acreage has been unavailable for lease since 1936. Output Exploration has 60 days to evaluate and select tracts for a 3D seismic program.

HUGOTON ENERGY CORP., Wichita, bought from Oxy USA Inc., Tulsa, a 36.25% interest in rights below 3,500 ft under 186,000 net undeveloped acres that underlie shallow production of Mesa Inc. unit Hugoton Capital LP in Kansas' Hugoton field.

ZAIRE GULF OIL CO., a unit of Chevron Overseas Petroleum Inc., tested 1,476 b/d from perforations at 7,670 8,215 ft in the Cretaceous lower Pinda in its Tshiala wildcat off Zaire. Zaire Gulf, with a 50% interest, plans delineation drilling and an early production system to appraise the discovery, 5 miles from existing production. Other interest owners are Zaire Petroleum Go. 32.28% and Unocal International Corp 17.72%.

WAINOCO OIL CORP., Houston, reports a gas discovery at Oak Field, north of Fort St. John, B.C., tested at a rate of 9.9 MMcfd. A second test flowed 6 MMcfd. The new production will be tied into existing facilities. Wainoco holds a 60% interest in both wells with Newport Petroleum Corp. as its partner. A third well will be drilled if activity in the area justifies it.

BHP PETROLEUM PTY. LTD. signed a contract with China National Offshore Oil Corp. for joint exploration of Block 4/32 in the Pearl River Mouth basin. BHP will serve as operator. The block, which covers 3,640 sq km, lies 230 km east-southeast of Hong Kong. Exploration is to begin in the fourth quarter.

PETROCHEMICALS

ARCADIAN CORP., Memphis, bought a Brea, Calif., ammonia plant formerly operated by Unocal Corp, and plans to modernize it and move it to Arcadian Partners LP's ammonia and urea complex at Point Lisas, Trinidad. Arcadian will add 750 short tons/day capacity to the plant during the next 18 months, raising ammonia production to 255,000 short tons/year.

DAELIM INDUSTRIAL CO. LTD. scheduled a 35 day turnaround beginning Oct. 11 for its 300,000 metric ton/year No. 2 naphtha cracker at the Honam, South Korea, petrochemical complex in line with an earlier agreement to cut production among South Korea's eight ethylene producers to help ease domestic oversupply. Daelim's No. 2 naphtha cracker, with capacity of 400,000 tons/year, will remain on line.

DRILLING PRODUCTION

WOODSIDE PETROLEUM PTY. LTD group agreed to a $280 million settlement with insurers of the delayed Goodwyn A platform slated for installation in the Northwest Shelf gas project off Western Australia. The platform was repaired at a cost of $320 million after piles were damaged during construction late in 1992.

CHINA NATIONAL PETROLEUM CO. started production in Dongetang oil field, a 1990 discovery 70 km west of Lunnan oil field in Kuohe county in Northwest China's Tarim basin. The field produces 12,000 b/d of oil from seven wells from pay at 5,800 m. Crude is treated at a central plant before being shipped through a 94 km pipeline to the Lunnan Korla trunk line.

CONOCO (U.K.) LTD. increased its holding in the U.K. Central North Sea's Britannia gas/condensate field by acquiring interests in two blocks held by Unilon Oil Explorations Ltd. and Baytrust Oil Explorations Ltd. The purchases bring Conoco's holding in Block 16/26 Area B to 24.68% and Block 16/27b to 22%.

CONOCO INC. increased its interest in the Gulf of Mexico's Mississippi Canyon 243 Area (MC 243) to 100% when it traded for Oryx Energy Co.'s 33% working interest in eight deepwater blocks forming a part of the Conoco operated MC 243. In return, Oryx got Conoco's 3% overridlng royalty interest in the Oryx operated Viosca Knoll 826 Unit.

LATSHAW DRILLING & EXPLORATION CO., Houston, sold two diesel electric/SCR land drilling rigs to state company China Petroleum Technology & Development Corp. and shipped the rigs to China. One is a 1,500 hp Continental Emsco Cl rig rated to 20,000 ft, which is scheduled to work in Zhongyuan oil field, the other a 2,000 hp National 1320 UE unit rated to 25,000 ft. It will work in Hua Bei oil field.

PREMIER CONSOLIDATED OILFIELDS PLC, London, 2 El Jem appraisal well in its El Jem license area 170 km south of Tunis in Tunisia flowed 13.3 MMcfd of gas and 245 b/d of light oil/condensate through a 56/64 in. choke with 1,120 psi flowing wellhead pressure. Gas consists of 40% hydrocarbon and 60% noncombustible gases. In 1992, the 1 El Jem wildcat flowed 3,600 b/d of 42 gravity oil.

MOBIL NORTH SEA LTD. started up Excalibur gas field in U.K. North Sea Block 48/17a in mid August, ahead of an October deadline. The 250 bcf gas field uses a wellhead platform sending gas to nearby Lancelot field for processing and export.

U.K. OFFSHORE oil production fell to 2.39 million b/d in July from a 5 year high of 2.46 million b/d in June, reports Royal Bank of Scotland plc, Edinburgh. It said the decrease resulted from scheduled maintenance work in many U.K. fields and a redevelopment program in Brent field.

HAMILTON OIL CO. LTD., London, let a 215 million ($22.5 million) contract to Stena Offshore Ltd., Aberdeen, for subsea installation work on Hamilton's Liverpool Bay development project in the U.K. Irish Sea. Work will include installation of four subsea barrier valves, three in Lennox field and one below Douglas platform on the Lennox export pipeline. Other work will involve laying two hydraulic umbilicals and three power cables. Work is expected to take as many as 100 days during summer 1995.

BP EXPLORATION OPERATING CO. LTD. let a 2 million ($3 million) contract to Noble Drilling (U.K.) Ltd., Aberdeen, for drilling services on Buchan field floating production vessel in the U.K. North Sea. The contract calls for routine maintenance and emergency service for the riser assembly and associated equipment for 3 years.

LASMO PLC let contract to Trafalgar House Engineering Ltd., London, to provide a compressor platform for Markham field on Block J6A in the Dutch North Sea. The contract covers design, procurement, fabrication, installation and commissioning of the platform, which is to be installed in 1996 for start up in October 1996.

OVERSEAS PRIVATE INVESTMENT CORP. agreed to guarantee $4.4 million in bank financing for the first stage of a $9.2 million plan by Argosy Energy International, a unit of Garnet Resources Corp., Houston, to drill development wells and build pipelines and production facilities for a multifield development on Colombia's Santana block. Issuance of second stage loan guarantees depends on Argosy's compliance with drilling and production schedules and oil sales requirements.

INUVIALIUT PETROLEUM CORP., Calgary, plans to sell its Alberta and Saskatchewan assets to concentrate on Canadian arctic exploration. Assets include combined reserves of 80 bcf of gas and 4.5 million bbl of oil. Inuvialiut will develop resources in the Mackenzie Delta and other areas of the Northwest Territories.

GAS PROCESSING

WILLIAMS COS. INC. unit Williams Field Services Group, Tulsa, bought a 43.5 MMcfd capacity gas processing plant in Southwest Hemphill County of the Texas Panhandle from a seven company group that includes Kerr McGee Corp. Williams will integrate the plant with an adjacent one it's building. The new plant is scheduled to start up Oct. 1. Williams is developing the site as its Hobart Ranch Hub processing complex, which will have total capacity of 74 MMcfd.

PIPELINES

BHP plans to lay a $350 million (Australian) gas pipeline from Australia's Bass Strait gas fields to Sydney. It's part of a bigger scheme to establish a gas pipeline grid in eastern Australia (OGJ, Sept. 5, Newsletter). Six routes are under consideration, with the preferred one a route through Canberra and along the coast. Tentative construction timetable is 1996 2000.

BAHRAIN and Saudi Arabia propose to replace a 40 km pipeline by laying a larger one to move 200,000 b/d of Saudi Arabia's Persian Gulf Coast Dammam field crude to Bahrain Petroleum Co. BSC's 250,000 b/cd Sitra, Bahrain, refinery. The existing line is to be shut down if the project is approved.

MAERSK OLIE & GAS AS let contract to Allseas Marine Contractors SA, Chatel St. Denis, Switzerland, to lay five pipelines in fields off Denmark. In 1995 Allseas will lay a 65 km, 16 in. diameter line to Svend from Tyra; 11 km, 16 in. line and 11 km, 8 in. line with 2 in. diameter piggyback to Roar from Tyra; 20 km, 16 in. line to Harald from Svend; and 3 km, 10 in. field line in Tyra.

CANADA'S National Energy Board issued revised guidelines on negotiated settlements involving traffic, tolls, and tariffs for Group 1 pipeline companies. Group 1 companies regulated by the board include the five largest oil and products pipelines and the five largest natural gas pipelines. Copies of the revisions are available from the NEB Regulatory Support Office in Calgary.

LNG

TAIWAN'S Chinese Petroleum Corp. (CPC) agreed to lower the price of liquefied natural gas delivered to Taiwan Power Corp. to $6.18 (Taiwanese)/cu m from $7.07/cu m. CPC took the step to promote LNG use and satisfy utility complaints that LNG prices are too high.