Pipelines
ENI SPA and Russia's Gazprom
signed contracts for $1.8 billion in loans to Blue Stream Pipeline Co. BV-a 50-50 joint venture of those two firms-and to Gazprom. The JV will build the Blue Stream natural gas pipeline, which will extend from Russia across the Black Sea to Turkey. ENI's engineering and construction arm Saipem SPA and its partners began initial work earlier this year on the 360-km subsea portion of the line, to be constructed and financed by the JV (OGJ, Feb. 21, 2000, p. 33). Gazprom will build and finance the 370-km Russian onshore section of the system.
The Caspian Pipeline Consortium
(CPC) let the last major contract for its Tengiz-Novorossiisk oil pipeline-a $45 million contract to Turkey's Tefken for renovation of the existing 452-km Kazakh portion of the line. The work, to be done by Kazakhstan's Intergazstroi and Kvaerner E&C UK Ltd., involves building a pumping station at Atyrau, revamping the existing station at Tengiz, and rehabilitating the entire piping system. Work on the 1,500-km, $2.3 billion pipeline is more than 30% complete, CPC officials say. A marine terminal at Novorossiisk is 40% complete, and about 300 km of pipe has been laid in Russia.
Companies
China Petrochemical Corp.
(Sinopec) completed its merger with China National Star Petroleum Corp. (CNSPC) (OGJ, Jan. 3, 2000, p. 19). CNPSC will become a subsidiary of Sinopec under the name China Sinopec Star Petroleum Ltd. The unit has 500 million tonnes of hydrocarbon reserves in China, 60% of which are oil. Before the merger, the company had net assets of 5.2 billion yuan. Sinopec Star's main oil and gas fields are in the northwestern region of Xinjiang and in the East China Sea. Sinopec is planning a $1 billion initial public offering early this year on the Hong Kong and New York stock exchanges.
Petrobank Energy & Resources Ltd.,
Calgary, launched a $1.6 billion (Can.) unsolicited takeover bid for Ranger Oil Ltd., Calgary. Petrobank, a much smaller firm, already holds a 5.4% stake in Ranger. Ranger says it will review Petrobank's bid of $7.50 (Can.)/share and examine its merger, restructuring, and sale options. The offer is a heavily leveraged reverse takeover, offering illiquid equity from an entity with a current market capitalization of only $86 million (Can.), Ranger said. Petrobank arranged to receive $750 million (US) from Barclays Bank PLC to finance the deal. The deal value includes $413 million (Can.) in debt and preferred securities.
Ulster Petroleum Ltd.,
Calgary, says it will fight a $776 million (Can.) unsolicited takeover bid from Hunt Oil Co., Dallas. Hunt, which considers its offer to be friendly, says Ulster management and staff would be retained. Hunt made its offer in an effort to expand its Canadian presence and to take advantage of higher gas prices, increased export pipeline capacity, and an underexplored producing basin. Hunt's $11/share offer needs approval from two-thirds of Ulster's shareholders and regulatory agencies. The deal includes Ulster debt of about $264 million. Hunt currently holds a 10% stake in Ulster.
Financing
Duke Energy Field Services
-a recently completed joint venture of Phillips Petroleum Co. and Duke Energy Corp.-secured $2.8 billion in senior credit facilities from Banc of America Securities to support the venture, which produces 400,000 b/d of gas liquids and gathers and processes gas. The merger of Duke's gas gathering and processing business with Phillips's gas processing and marketing unit was announced in December (OGJ, Jan. 3, 2000, p. 24).
Power
A consortium led by Japanese firm
Marubeni Corp. plans to build two natural gas-fired power plants in Germany: a 400-Mw plant near Dortmund and an 800-Mw plant near Ahaus. They will be the first merchant combined cycle, gas-fired generation facilities in Germany built by independent companies. Marubeni said it will seek exemption from the tax on gas that is being discussed by Germany with the European Commission, as well as routine permits. The plants are slated to begin providing power to industrial customers and municipalities in northwestern Germany by March 2003. Interests in both projects are Marubeni, 64.9%; BAW Holding West GMBH, 25.1%; and Dynegy Inc., 10%.
The Philippines
started up its first natural gas-fired power plant, Santa Rita, south of Manila (OGJ, Jan. 19, 1998, p. 22). The $890 million, 1,000-Mw plant is privately owned by a joint venture of BG PLC and Filipino firm First Philippine Holdings Corp. It is to run at half capacity on diesel or condensate until June, when it will begin running at full capacity. In October 2001, it will switch to gas from Malampaya field off the western island of Palawan. Royal Dutch/Shell and Texaco Inc. are developing the field.
Drilling-production
Shell Exploration & Production Co.
and its partners began production from three wells in Europa field on Mississippi Canyon (MC) Block 934 in the Gulf of Mexico; the wells are producing a combined 40,000 b/d of oil and 30 MMcfd of natural gas. The Europa subsea system-which lies in 3,900 ft of water about 140 miles southeast of New Orleans and spans MC blocks 890, 891, 934, and 935-ties back 18 miles to Shell's Mars tension-leg platform on MC Block 807. Europa partners are operator Shell (34%), BP Amoco PLC (33%), Agip SPA (32%), and Conoco Inc. (1%).
Shell UK Exploration & Production Co.
claims to have completed the "fastest" subsea development in the North Sea and boosted Curlew field production 63% by tying in a new satellite reservoir to the Curlew floating production, storage, and offloading vessel just 53 days after Curlew D South's discovery. Curlew D South is contributing 15,000 b/d to total Curlew production of 39,000 b/d. The tie-in project, which is 210 km southeast of Aberdeen in 92 m of water, cost £12 million. Shell operates in the North Sea on behalf of Shell UK Ltd. and Esso Exploration & Production UK.
TotalFinaElf SA unit
Elf Exploration Inc. drilled an appraisal well that it says confirms and extends the Aconcagua ultradeepwater discovery on Mississippi Canyon Block 305 in the Gulf of Mexico. The appraisal well, drilled in 7,000 ft of water 2 miles from the discovery well, was drilled to 14,113 ft and cut more than 250 net ft of natural gas pay. Production start-up is slated for late 2001. Block partners are operator Elf (50%), Pioneer Natural Resources USA Inc. (25%), and Mariner Energy Inc. (25%).
Petroleo Brasileiro SA
signed an agreement to farm out interests in Bijupir
Conoco Inc.'s
$40 million Vixen natural gas field project in the North Sea is on schedule to begin early production in October, says Conoco. Only 10 months after Vixen's discovery, the subsea wellhead protection structure has been installed. Vixen field, previously known as E-Plus, is on Block 49/17, about 84 miles off Lincolnshire. Operator Conoco and BP Amoco PLC hold equal interests in Vixen, which is believed to contain 117 bscf of recoverable natural gas. A peak production rate of 120 MMcfd is anticipated at start-up.
Alberta Energy and Utilities Board
ordered several operators to shut in 146 natural gas wells in the Fort McMurray area of Alberta to clear the way for Gulf Canada Resources Ltd.'s $1.3 billion (Can.) oilsands project (OGJ, June 28, 1999, p. 22). AEUB determined the oilsands project to be more valuable to the province. Gulf Canada argued at hearings that operation of the wells could adversely affect bitumen recovery from the project, in which TotalFinaElf SA is a partner. The board ruled the bitumen is a significant resource that should be protected for development. Production from the wells is to cease on May 1. Producers including Northstar Energy Corp. and Paramount Resources Ltd. argued against the well closures.
Saipem
launched its newest deepwater drillship, Saipem 10000, Apr. 6 at Samsung Heavy Industries' Koje Yard in South Korea. The $300 million, dynamically positioned drillship can drill in more than 3,000 m of water and can store 140,000 bbl of crude oil. The vessel will begin a 5-year contract with ENI and Agip SPA by drilling in the southern Adriatic Sea in 1,200 m of water.
Schlumberger
claims a world's record for the longest slimhole perforating gun assembly during a horizontal completion, in Alaska in February 1997. The 1,360-ft assembly consisted of 111/16-in. OD guns (OGJ, Mar. 6, 2000, p. 39).
Petrochemicals
The European Commission
approved the planned BASF AS-Shell polyolefins joint venture after the companies agreed to divest 600,000 tonnes/year of polypropylene production capacity and 130,000 tonnes/year of compounding capacity, as well as Targor's Novolen licensing business, in order to resolve antitrust concerns. The move still requires approval from other authorities, including the US Federal Trade Commission. The companies announced plans to merge units Elenac, Montell, and Targor last year (OGJ, Nov. 15, 1999, p. 40). BASF and Shell will each hold a 50% stake in the new Netherlands-based joint venture.
Refining
Tosco Corp.,
Stamford, Conn., is moving into the US Midwest gasoline market with its proposed $420 million acquisition of the Wood River Refinery at Roxana, Ill., from Equilon Enterprises LLC, a joint venture of Shell Oil Co. and Texaco Inc. Equilon plans to focus on West Coast refining and its lubricants, pipeline, and marketing businesses. The refinery is 15 miles north of St. Louis and was built in 1918 by Shell affiliate Roxana Petroleum Co. That location lets the refinery ship fuel by barge along the Mississippi River to Midwestern states. The sale is expected to close June 1.
Sinopec unit
Guangzhou Petrochemical Corp. submitted for government approval a proposal to add 6 million tonnes/year to its sour crude refining capacity. Guangzhou is now working on a feasibility study for the 3.3 billion yuan project, expected to begin next year and to be completed in 2003. Guangzhou plans to add seven refining units and expand a distillation tower to 4.8 million tonnes/year capacity from 2.5 million tonnes. The new units are a 1 million tonne/year hydrocracker, a 1 million tonne/year hydrorefiner, a 1 million tonne/year hydrotreater, an 800,000 tonne/year jet fuel hydrorefiner, an 800,000 tonne/year reformer, a 60,000 tonne/year sulfur-recovery unit, and a 60,000 cu m/hr hydrogen unit.
Exploration
South African national oil firm
Soekor E&P Pty. Ltd. said a third appraisal well extends the Sable oil field. The well found a thin oil column in a new accumulation of the Sable field project on Block 9 off South Africa. Soekor and its partners intend to sidetrack the well updip to further appraise the area. Operator Soekor holds 60% interest in Sable field, while Pioneer Natural Resources holds 35% and Petroleum Ltd. 5%.
Apache Corp.,
Houston, reported that test zones in the Alam el Bueib formation of its Akik-1X discovery on Egypt's West Mediterranean concession has more than doubled the well's combined flow rate to 49.4 MMcfd of natural gas and 4,051 b/d of condensate (OGJ, Feb. 14, 2000, p. 33). On test, the well flowed 26 MMcfd of gas and 2,366 b/d of condensate from the Alam el Bueib through a 1-in. choke with 1,700 psi of wellhead pressure. Apache operates the concession, with a two-thirds interest; Spain's Repsol-YPF SA holds the remaining third.
Clyde Petroleum Exploratie BV,
a unit of Gulf Canada Resources Ltd., Calgary, made a gas discovery on P6 Block in the Dutch North Sea. Constrained by equipment, on test, P6-9 flowed 44 MMcfd from a 50-m perforated interval in one reservoir and an additional 9 MMcfd from a second reservoir with wellhead pressure of 2,450 psi. Production is expected to start in 2001. P6-9 was drilled about 4.5 km northwest of the P6-8 producing gas field. Interests are operator Clyde Petroleum, 29.4%; Dyas Nederland BV, 20.85%; Energie Beheer Nederland BV, 40%; and Cairn Energy PLC unit Holland Sea Search BV, 9.75%.
LNG
Ras Laffan Liquefied Natural Gas Co.
(RasGas) began production from the second train of its LNG plant 10 days ahead of schedule, doubling capacity to 5 million tonnes/year. The expansion will allow Rasgas to meet its commitment to long-term customer Korea Gas Corp. and have excess LNG to sell to other customers. First LNG exports from the plant began in June 1999. RasGas is owned by Qatar General Petroleum Corp., ExxonMobil Corp., Itochu Corp., and Nissho Iwai Corp.
Oman LNG
announced shipment of 135,000 cu m of LNG-the sultanate's first cargo-bound for South Korea's Korea Gas Corp. (Kogas). Oman's Oil Minister Mohammad bin Hamad al-Romhi attended a send-off ceremony at the Qalhat LNG plant, which began production in December. Oman LNG has a 25-year contract to supply Kogas with 4.1 million tonnes/year of LNG, which is its biggest LNG contract with a single client, officials said.
Terminals
Petroleos de Venezuela SA
will sell its Bahamas-based oil terminal company, Bahamas Oil Refining Co. International. The facility has storage capacity of about 20 million bbl. PDVSA said the sale will help optimize its assets.