Exploration
A Canadian moratorium
on oil and gas exploration on the Georges Bank off Nova Scotia has been extended until yearend 2012. Ottawa and the provincial government said the area is one of the most productive fishing grounds in the world. The original moratorium was established in 1988 and was to expire Jan. 1, 2000. The US government has already extended to 2012 the moratorium on the 80% of the area that it controls. In 1995, an independent panel set up by the two Canadian government bodies consulted with the petroleum industry, fishermen, environmentalists, and other interests before deciding to extend the ban on exploration; the petroleum industry contends that fishing and oil and gas exploration can coexist in the area.
Swift Energy
unit Swift Energy New Zealand Ltd. and partners completed production tests on Rimu-A1 discovery well in the Taranaki basin along New Zealand's North Island west coast. The well flowed 1,525 b/d of 44° gravity oil and 4.8 MMcfd of gas through a 32/64-in. choke with 1,370 psi flowing tubing pressure from pay at 3,607-3,647 m in Tariki sandstone. Operator Swift holds 90% interest in the permit, which covers 100,652 net acres onshore and offshore; Calgary's Antrim Energy Inc. unit Antrim Oil & Gas Ltd. and Brisbane's Bligh Oil & Minerals Ltd. unit Marabella Enterprises Ltd. each holds 5%.
Santa Fe Energy Resources of Gabon (Agali) Ltd.,
a unit of Santa Fe Snyder Corp., Houston, signed a production-sharing contract covering the 4,100 sq km Aga* exploration block in 200-2,500 m of water off Gabon's northern coast. Santa Fe Snyder, with a 100% interest, committed to a work program that includes a seismic survey and a wildcat in the first 5 years with a 5-year exploration term extension option and a production term of 20 years.
Kerr-McGee Corp.
and Pendaries Petroleum Ltd. found oil on Block 04/36 in China's Bohai Bay. The company tested five zones in a well that logged more than 280 ft of oil pay. The discovery well, drilled to 4,789 ft, is on a large four-way dip structure in 80 ft of water and has more than 5,000 acres of closure, Kerr-McGee says. The find is on trend with producing fields to the northeast and Phillips Petroleum Co.'s discovery to the southeast (OGJ, Nov. 15, 1999, p. 34). Operator Kerr-McGee holds 81.8% interest in the block, Pendaries 18.2%.
Companies
Dow Chemical Co.,
Midland, Mich., exercised a warrant to acquire 15.15 million shares of Schlumberger Ltd., Paris, for $450 million. Dow received the warrant as part of a 1993 transaction through which Schlumberger acquired Dow's 50% share of their Dowell Schlumberger joint venture.
Australia Gas Light Co.
(AGL), Sydney, will acquire from TransCanada PipeLines Ltd., Calgary, its 25.48% interest in the East Australian Pipeline Ltd. natural gas pipeline system in New South Wales for about $110 million (Can.). The sale is part of a TransCanada restructuring unveiled late in 1999, which includes the sale of noncore assets worth $3 billion (OGJ, Dec. 20, 1999, p. 32). Assets on the market include a US crude oil pipeline and pipelines and related facilities in Mexico, South America, and Asia. Last year, TransCanada sold more than $1 billion in assets, including its US petrochemical and natural gas operation.
AGL
will spin off its regulated pipeline business into the $1.2 billion (Aus.) Australian Pipeline Trust. The trust will own 6,800 km of AGL's natural gas transmission pipelines throughout Australia and will release $500 million of capital for AGL expansion. ABN Amro Rothschild was appointed lead manager on the initial public offering of 60% of the trust; AGL will retain 30%, and Malaysia's Petronas 10%. AGL also plans to set up a new, unregulated subsidiary that will provide management and support services for energy infrastructure across Australia.
Veba Oel AG
will acquire Mobil Oil AG's 28% interest in Aral AG, one of Germany's largest service station operators. The sale satisfies conditions required by the European Commission for approval of the Exxon-Mobil merger (OGJ, Oct. 25, 1999, p. 22).
Kinder Morgan Energy Partners LP
(KMP) will acquire certain assets totaling $700 million from Kinder Morgan Inc., Houston, in exchange for 9.81 million KMP common units and about $330 million. These assets include: the Kinder Morgan interstate natural gas pipeline system (formerly KN Interstate Gas Transmission); a 49% interest in Red Cedar Gathering Co.; and a 33% interest in Trailblazer Pipeline Co.
Pluspetrol Peru Corp.,
the Peruvian unit of Pluspetrol Resources Corp., will acquire Occidental Petroleum Corp.'s 100% interest in Block 1-AB in Peru. Oxy, however, will retain interests in Peruvian Blocks Z-3 and 64, it said.
Refining
The Angolan government
let contract to Technip SA, Paris, to conduct a feasibility study for a grassroots refinery to be built in Benguela province, possibly at Lobito. The plant, to be developed in several stages, would have ultimate capacity of 200,000 b/d.
Drilling-production
Total Offshore Production Systems
(TOPS), a joint venture of R&B Falcon and Intex Engineering Inc., completed installation of what it claims as the world's first 15,000 psi subsea production system, in 880 ft of water on Green Canyon Block 20 in the Gulf of Mexico (OGJ, June 28, 1999, p. 33). The system was installed on the Gyrfalcon well, which started producing 13 MMcfd of natural gas and 500 b/d of condensate.
Norsk Hydro AS
and partners plan to spend 15 billion kroner to develop Grane field off Norway (OGJ, Sept. 6, 1999, p. 30). Grane, expected to reach production of 214,000 b/d of oil in 2005 from 26 wells, is on Blocks 25/8 and 25/11 in the Norwegian North Sea about 185 km west of Stavanger. Hydro plans to predrill 10 wells ahead of start-up in October 2003 as well as three water and three gas injectors. Partners are: operator Hydro, 24.4%; Esso Exploration & Production UK Ltd., 25.6%; and Statoil, 50%.
Mobil Produccion e Industrializacion de Venezuela Inc.,
a unit of ExxonMobil Corp., began initial production of 60,000 b/d of diluted extra-heavy crude oil from the Cerro Negro integrated heavy oil project in Venezuela's Orinoco oil belt (OGJ, Oct. 19, 1998, p. 49). The oil is blended with condensate for transport through a 180-mile pipeline to storage and loading facilities at Jose, on the eastern coast of Venezuela. In 2001, after installation of a new coker at the project upgrader, Cerro Negro output is expected to plateau at 120,000 b/d. The project is expected to yield 1.5 billion bbl over 35 years.
Ocelot International Ltd.
will spend an estimated $8.5 million to drill two development wells in Obangue field to increase oil production in Gabon. Ocelot expects to spud the first well this month. Obangue currently can produce 600 b/d; capacity of the field's existing production barge is 2,200 b/d. The two new wells are expected to push output to capacity.
Vastar Resources Inc.,
Houston, completed an appraisal well in Horn Mountain oil field on Mississippi Canyon Blocks 126 and 127 in 5,418 ft of water in the Gulf of Mexico. The appraisal follows a discovery well that cut 285 ft of net pay in the area earlier last year (OGJ, Aug. 30, 1999, p. 46). The discovery well indicated a vertical oil column of about 1,500 ft in two stacked Miocene reservoirs containing 34° gravity oil; preliminary reserve estimate is about 125 million bbl. Operator Vastar holds two-thirds interest in the field, Occidental the remainder. The partners plan to drill a second appraisal, with two sidetracks, on Block 127, as well as an appraisal and sidetrack on Block 126.
Swift Energy Co.,
Houston, tested an Austin chalk development well in Masters Creek field in Rapides Parish, La. Swenco 18-1 well flowed 2,400 b/d of oil and 10.3 MMcfd of gas through a 26/64-in. choke with 6,900 psi tubing pressure. Swift, as operator with an 80% working interest, drilled the well as a dual-lateral horizontal well at 14,700 ft vertical depth. Swift operates 11 other horizontal wells in the field and plans to drill eight more wells there in 2000. In a related transaction, Swift signed an agreement with Dominion Reserves Inc. to purchase all of Dominion's oil and gas interests in the Masters Creek field in Vernon and Rapides parishes, La., for $15 million.
ExxonMobil Corp.
unit Esso Exploration & Production Nigeria Ltd. tested a step-out to a 1999 deepwater oil and gas discovery on Nigerian Block 209, about 100 miles southeast of Lagos. The discovery well, Erha-1, was completed in February 1999. The Erha-2 appraisal well, spudded in 3,860 ft of water in September 1999 and drilled to 12,287 ft TD, flowed 2,800 b/d of oil on test. Operator Esso holds a 56.25% interest, Shell Nigeria Exploration & Production Co. Ltd. 43.75%.
Harrods Energy (Thailand) Ltd.
drilled three successful delineation wells following its oil discovery on Block B5/27 in about 61 m of water in the Gulf of Thailand (OGJ, July 19, 1999, p. 82). On test, discovery well B5/27-3 flowed 1,096 b/d of oil and cut oil in multiple zones. The B5/27-DEL4, B5/27-DEL4B, and B5/27-DEL5B delineation wells each flowed 1,000-3,000 b/d of oil. Operator Harrods holds a 62.5% interest in the block, PTT Exploration & Production Public Co. Ltd. unit PTT International Ltd. the remaining 37.5% interest. The partners plan to develop the field.
Mobil Exploration & Producing Australia Pty. Ltd.
and its partners drilled another successful step-out to its Woollybutt oil strike on the North West Shelf off Western Australia. The 3 Woollybutt, drilled 7.5 km south of 1 Woollybutt, cut oil pay in a 9 m section and a 6 m section. The partners-Tap Oil NL (10%), British-Borneo Australia PLC (30%), Mobil (20%), and PanCanadian Petroleum (40%), put preliminary reserves estimates as high as 100 million bbl of oil but say further study is needed to confirm that figure.
Petrochemicals
Phillips Investment Co.,
a unit of Phillips Petroleum Co., formed a joint venture with South Korea's Daelim Industrial Co. Ltd. to produce Phillips's proprietary K-resin styrene-butadiene copolymer (SBC). The JV, to be owned 60-40, respectively, by Phillips and Daelim, will involve Daelim's existing 40,000 tonne/year K-resin SBC plant at Yochon, South Korea.
CXY Chemicals,
a unit of Canadian Occidental Petroleum Ltd., Calgary, bought two Brazilian chemical plants from Aracruz Cellulose SA. The plants, a 35,500-tonne/year sodium chlorate unit and a 35,000-tonne/year chlor-alka* unit-adjoin an Aracruz pulp mill in Espirito Santo state, north of Rio de Janeiro. CXY, which plans to hike its Brazilian sodium chlorate output to 100,000 tonnes/year, said the deal will make it one of the world's largest sodium chlorate producers, with capacity of more than 440,000 tonnes/year.
Power
Dynegy Inc.,
Houston, plans to build a 500-Mw natural gas-fired peaking power plant in Osceola County, Fla., about 30 miles southeast of Orlando. Dynegy will use gas from the Florida Gas Transmission pipeline to generate power, which it will sell wholesale utilities, electric cooperatives, and towns throughout the state. Commercial operations are to begin in summer 2002.
Pipelines
Kazakhstan
signed an amendment to the final production-sharing agreement with Karachaganak field partners ENI SPA, BG International, Texaco Inc., and Lukoil for construction of a 460-km pipeline from Bolshoy-Chagan to Atyrau, Kazakhstan. In Atyrau, the pipeline will link to the Caspian Pipeline Consortium pipeline and enable the partners to increase Karachaganak production to about 195,000 b/d of liquids and 1.1 bcfd of natural gas from the current 65,000 b/d of liquids and 340 MMcfd of gas.
Canada's National Energy Board
gave final approval to Maritimes & Northeast Pipeline Management Ltd. to operate a pipeline to deliver natural gas from the Sable Island region off Nova Scotia to Atlantic Canada and New England. The board said Dec. 17 that it had not decided whether the pipeline had satisfied a condition related to consulting with several Indian groups in Nova Scotia on environmental pipeline monitoring. The NEB now says that condition has been satisfied and it is granting full approval for the pipeline. The pipeline crosses land owned by the Mi'kmaq Indians.
Enron North America Corp.
signed a contract for about 1.2 bcfd of firm interstate capacity on El Paso Natural Gas Co.'s system for 1 year for $38 million. The capacity-held most recently for a 2-year contract by Dynegy-makes up the larger portion of the 2.2 bcfd of firm transportation from southwestern US producing basins to California that was due to expire Dec. 31, 1999. Williams Energy Marketing & Trading, a unit of Williams, Tulsa, acquired the remaining 99.3 MMcfd of capacity earlier in 1999. Together, the two deals will net El Paso $45.5 million in revenues for 2000, a 30% increase from average annual revenues garnered from that capacity during the last 2 years.