OGJ NEWSLETTER

May 14, 1990
Omega Aker Offshore Inc. is conducting a study for Marathon Oil Co. that could lead to installation of the Gulf of Mexico's first floating production, storage, and offloading (FPSO) system based on a tanker-perhaps with an onboard methanol plant. The study by the partnership of Omega Marine Group, Houston, and Aker Engineering AS, Oslo, covers tanker size, process plant preliminary design, mooring evaluation, and cost and development of a performance specification.

Omega Aker Offshore Inc. is conducting a study for Marathon Oil Co. that could lead to installation of the Gulf of Mexico's first floating production, storage, and offloading (FPSO) system based on a tanker-perhaps with an onboard methanol plant.

The study by the partnership of Omega Marine Group, Houston, and Aker Engineering AS, Oslo, covers tanker size, process plant preliminary design, mooring evaluation, and cost and development of a performance specification.

The unit could see first service in Green Canyon Block 110, site of one of several deepwater discoveries by Marathon and partners (OGJ, Nov. 13, 1989, p. 21). Block 110 is a southeast offset to Shell Offshore Inc.'s Green Canyon Block 65. Platform Bullwinkle is operating on that block in 11353 ft of water.

The FPSO could be moved to other sites after modifications. It will produce, process, and store as much as 15,000 b/d from five wells in 1,500-3,000 ft of water.

A tension leg platform is in the works for the Campos basin off Brazil.

Petrobras let a contract to a joint venture of Fluor Daniel and GVA of Sweden for preliminary design and development of a TLP to handle 100,000 b/d of oil.

Specific design criteria to be used are from giant Marlim field 80 miles off Rio de Janeiro in 3,280 ft of water, and TLPs might ultimately be used in Marlim and nearby Albacora fields.

Completion of the engineering study is set for late 1990.

Production tests have started at a Jurassic Smackover development well that set a horizontal drilling depth record.

Smackco Ltd., Brewton, Ala., began tests at 1 Cruit 26-15, formerly 2 ATIC 35-2, in Huxford field, Escambia County, Ala. At 14,672 ft true vertical depth, the well surpassed the previous record of 11,484 ft TVD at a North Dakota well.

The well profile placed more than 400 ft of 5 7/8 in. hole in the target Smackover dolomite at about 100 from vertical.

TVD is 14,614 ft at measured total depth of 15,357 ft. Dogleg severity reached as much as 25.8/100 ft during build and turn intervals.

Texaco was working to resume full pumping May 10 through the Eugene Island Pipeline System in the Gulf of Mexico, shut down as a precaution at 1 a.m. May 7 after an oil spill was reported May 6.

The 20 in., 112 mile system serving 36 platforms normally handles about 95,000 b/d of oil.

Exxon was attempting to bring to the surface for inspection a 1 in. valve on an Exxon pipeline that fed into the Eugene Island system until it was shut down 2 years ago. Texaco said divers determined the valve to be the source of the spill.

The Coast Guard and the two oil companies estimated spill volume at about 900 bbl. The sheen had disappeared by May 9.

A Urengoi-Surgut-Chelyabinsk gas pipeline exploded and burned May 7 about 90 miles west of Kurgan in western Siberia, the Soviet Tass news agency reported.

The report did not indicate loss of life, list a cause, or say whether the fire was controlled.

Turkey's state owned Turkiye Petrolleri AO has placed on long term tests a discovery and appraisal well in the Karacus area of southeastern Turkey. The Karacus North discovery in the Gaziantep District flowed 2,000 b/d of oil, and the appraisal well flowed 5,000 b/d from an undisclosed zone. The wells are high yielding by Turkish standards.

Plans are under way for the merger of North and South Yemen by yearend, says Dr. Mohamad Ahmad al-Saidi, secretary general of North Yemen's supreme council for oil and mineral resources.

The joining will open more opportunities for oil and gas investors, he said. The oil ministries are to be combined.

YPF of Argentina will initiate an oil policy that opens major oil fields for participation by foreign companies, YPF Chairman Carlos Osvaldo Pierro says.

Foreign contractors would be able to purchase production rights in and operate major fields. Contractors would be free to dispose of their share of production or sell it to YPF at the world price.

Viet Nam, nearly surrounded by territorial boundary disputes, wants to settle them so exploration can proceed.

Dao Duy Chu, director of state owned Petro-Vietnam, said Viet Nam and Indonesia claim about 15,000 sq miles of the same area. Viet Nam also has disputed boundaries with Thailand, Malaysia, the Philippines, Taiwan, and China.

Thailand-Malaysia and Indonesian-Australian agreements could serve as models, he said (OGJ, Apr. 30, p. 42).

Petro-Canada Inc. is offering to sell 10 major properties in western Canada worth an estimated $350 million.

The national oil company, to be privatized this year, said the sale is part of a property rationalization program.

The properties, mostly in Alberta, produce about 8,900 b/d of oil and liquids and 24 MMcfd of gas. The sale will be held in two stages, the first this month and the second in the third quarter.

Assets for sale include varying interests in the Bigoray, Boundary lake, Connorsville, Crossfield, House Mountain, Nipisi Gilwood, Paddle Prairie, Snipe Lake, Swan Hills, and Virginia Hills fields in Western Canada.

Three companies have outlined plans for a new natural gas pipeline system from Alberta to markets in the U.S. and central Canada.

The backers, Foothills Pipe Lines Ltd., Northern Border Pipeline Ltd., and Panhandle Eastern Corp. plan a system with a capacity of 250 MMcfd to Ontario and an initial capacity of 250 MMcfd to markets in the U.S. Northeast.

Panhandle Spokesman Kirk Michael told Calgary producers the partners would like to see the project in service by November 1992.

The group wants to serve demand beyond markets now linked to projects planned by TransCanada PipeLines Ltd. and the Iroquois project, which would serve U.S. Northeast markets with Canadian gas.

The National Energy Board is hearing a $2.6 billion TransCanada expansion application.

Foothills would spend $44 million U.S. to increase its capacity in Alberta and Saskatchewan to handle 1.5 bcfd.

Northern Border would add five compressor stations between Saskatchewan and Ventura, Iowa, and lay 367 miles of 30 in. pipe to Tuscola, Ill., to connect with the Panhandle, Texas Eastern, Algonquin, and Trunkline systems.

Interprovincial Pipe Line Ltd. has indefinitely postponed a proposed $1 billion expansion of its crude oil pipeline from western Canada to eastern Canada and the U.S.

Brian MacNeill, Interprovincial executive vice-president, said the reason is an expected decline in western Canada oil production during the 1990s.

The company disclosed a postponement of the project last fall but did not say for how long.

The National Energy Board reported a 3% decline in 1989

in Canadian crude oil production. Forecasts call for a continued drop in conventional crude production during the 1990s.

The U.S. oil industry has gained an advocate on the Senate finance committee.

Sen. John Breaux (D-La.) has been selected to replace the late Sen. Spark Matsunaga (D-Hawaii) on the tax writing committee. The panel is chaired by Sen. Lloyd Bentsen (D Tex.).

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