Petrochemicals
BHP Petroleum Pty. Ltd. started a feasibility study of an 850,000 metric ton/year methanol plant near Karratha in Western Australias Pilbara region. It would use gas from undeveloped fields off Northwest Australia. BHP soon will begin an environmental impact assessment. Construction would take 2 years, with earliest possible start-up in 1999. BHP recently commissioned Australias first methanol plant near Melbourne (OGJ, Nov. 14, 1994, Newsletter). The plant uses Bass Strait gas and supplies 65% of Australias methanol demand.
Stone & Webster, on behalf of BP Chemicals, let contract to Howmar International Ltd., Camberley, U.K., for design and supply of a Howmar/Bayer PSA hydrogen plant as part of its expansion of BPs Grangemouth, U.K., ethylene plant. The modular unit consists of four adsorbers and a control system. It will be installed alongside the original hydrogen plant. Howmar supplied in 1990. Delivery is slated for February 1996 for start-up later next year.
Drilling-production
Chevron Niugini Pty. Ltd. hiked production from Papua New Guineas Kutubu oil export project by 10% with a horizontal well. Chevron started up the latest Iagifu field well, a horizontal hole completed in Jurassic Toro sandstone at 10,300 b/d. This jumped Kutubu production to 110,000 b/d. Chevron plans four more horizontal wells at Kutubu, with the first to spud immediately.
Oklahoma Corporation Commission proposed as an emergency rulemaking a new schedule of oil and gas user fees. The fee for filing an oil and gas case application would jump to $175 from $35. Among the proposed new fees are a $100/year license fee, a $100 well/lease transfer fee, and a $1,000 fee for operating a commercial disposal facility. The commission said the new fee schedule is needed to offset revenue losses from the state oil and gas conservation fund and other state and federal funding programs.
Pakistans Oil & Gas Development Corp. started production in Qadirpur gas field, reported license partner Premier Oil plc, London. Qadirpur has estimated reserves of 3 tcf, and 15 wells have been drilled. Early production is expected to reach 90 MMcfd, after which output will ramp up to 340 MMcfd next year.
ARCO British Ltd. started flow from Gawain gas field in the southern U.K. North Sea. The field, in Blocks 49/24 and 49/29a, holds reserves of 130-190 bcf. Early production is at a rate of 75 MMcfd, with peak output expected at 112 MMcfd. Gawain was developed with a three well subsea template tied back to ARCOs Thames platform, 9 miles southwest.
Exploration
Oil and gas exploration spending in Australia jumped in fiscal 1994-95 to a record $683.6 million (Australian), up 35% from the previous high in fiscal 1993-94. Most of the surge occurred offshore, where spending of $519.8 million was up 43% from the previous fiscal year. Onshore exploration spending in Australia also increased, by 13% to $163.8 million in fiscal 1994-95.
Marathon Petroleum Gabon Ltd. 1 Tchatamba Marine off Gabon flowed 4,545 b/d of 46 gravity oil through a 1 in. choke from a 74 ft interval of Albian upper Madiela at 6,306-80 ft. The well cut about 180 ft of net pay in sandstone and carbonate reservoirs in Turonian Azile, Cenomanian Cap Lopez, and upper Madiela. The find is on the 702,022 acre Kowe permit in 151 ft of water about 100 miles southeast of Port Gentil. Plans call for more seismic surveys over the find.
Occidental Petroleum Corp. signed production sharing agreements for two blocks off Congo. The 345,000 acre Marine XI and 242,000 acre Marine XII blocks are in the West Africa salt basin. Oxys blocks are in less than 100 m of water adjacent to major producing oil fields. Oxy first will conduct a 1,000 line km seismic survey and drill one wildcat on each block. Interests are operator Oxy 85% and state oil company Hydrocongo 15%.
Talisman Energy Inc., Calgary, found gas with a U.K. North Sea well drilled to earn an interest in Block 50/26b, operated by BP Exploration Operating Co. Ltd. The well found gas in Leman sandstone and was suspended as a potential producer without testing. The find is near several fields where wells produce at rates of more than 50 MMcfd. Talisman plans to drill a development well early in 1996 and start production in 1997.
Esso Norge AS disclosed another oil strike on Block 25/8 off Norway near its Balder discovery, which is being evaluated for development. License partner Enterprise Oil plc, London, said the 25/8-8S well found Paleocene hydrocarbons and flowed 6,700 b/d of oil and 2.7 MMcfd of gas through a 2 in. choke. The well was drilled to 2,343 m, bottoming in Jurassic sands. Last year Enterprise achieved comparable flow rates at a nearby discovery (OGJ, Oct. 3, 1994, p. 30). Esso is preparing to evaluate the latest find with a sidetrack to the south.
Carigali-Triton Operating Co. (CTOC) made its second big discovery in two attempts on Block A-18 in the Gulf of Thailands Malaysia-Thailand joint development area. The 1 Suriya wildcat flowed 58 MMcfd of gas and 351 b/d of condensate from about 218 ft of pay at 3,820-6,209 ft through 4064-9664 in. chokes. The well is on a separate structure 612 miles east-southeast of CTOCs 1A Cakerawala discovery well (OGJ, Aug. 28, p. 41). CTOC is owned 50-50 by Petronas Carigali (JDA) Sdn. Bhd. and Triton Energy Corp., Dallas.
Empresa Colombiana de Petroleos awarded an association contract to a combine of Garnet Resources Corp., Houston, and Aviva Petroleum Inc., Dallas, on the 39,000 acre Yuruyaco block. The tract lies next to the companies Santana and La Fragua blocks in Southwest Colombias eastern Andes overthrust belt. The agreement requires Garnet and Aviva to collect seismic data in the area in the first 2 years and to drill a wildcat in the third year. Units of Garnet and Aviva hold 55% and 45% interest, respectively, in the acreage.
Kuwait Oil Co. signed an agreement with Shell International Petroleum Co. Ltd. for a joint study of exploration and development potential off Kuwait. Middle East Economic Survey said a joint team will review data from the area, including seismic surveys and well data, with the aid of current technology. The team will assess possibilities for future E&D. Work started Oct. 1 and will continue for 11 months.
Pipelines
CMS Gas Transmission & Storage Co. and St. Clair Pipelines, an affiliate of Ontarios Union Gas Ltd., started construction on the Bluewater pipeline linking U.S. and Canadian natural gas systems. The $5.3 million project, providing a direct pipeline connection between the systems of Union Gas and CMS affiliate Consumers Power Co., is to be complete in November. It will transport as much as 200 MMcfd for Michigan or Ontario shippers.
Novagas Clearinghouse Ltd. and affiliate Novagas Clearinghouse Pipelines Ltd. will build and operate gas gathering and processing facilities and a transmission system to carry gas and recover liquids from Midwinter, Helmet, Tooga, and Peggo gas fields of Northeast British Columbia to NOVA Gas Transmission Ltd.s pipeline at the Alberta border. Gulf Canada Resources Ltd. and Ohio Resources Corp. signed contracts to use the gas gathering/processing facilities and pipeline. Negotiations are continuing with other Northeast British Columbia producers. All facilities are to be in service in April 1996.
Canadas National Energy Board approved construction of a 59 mile crude oil pipeline from Northeast British Columbia to Alberta. The $14.5 million (Canadian) line, to be built by ISH Energy Ltd., Calgary, will move oil from Desan oil field to connect with the Norman Wells pipeline in North Alberta operated by IPL Energy Inc., Calgary. The line, jointly owned by ISH and Westcoast Gas Services Inc., is scheduled for completion in April.
Refining
Kenyen Products Ltd., Houston, purchased equipment of the mothballed 49,500 b/d Powerine refinery in Santa Fe Springs, Calif., from Castle Energy Corp., Radnor, Pa. for $22.6 million in cash and a note. Kenyen plans to disassemble the equipment and reassemble it in India.
Nynas Petroleum AB, Johanneshov, Sweden, let a turnkey contract to Howmar International for design, supply, and construction of a 5,000 cu m/hr, naphtha fed, steam reforming hydrogen plant at its 28,000 b/d Nynashamn, Sweden, refinery. It will use Howe-Baker reformer technology and Howmar/Bayer PSA gas purification technology.
Alternate fuels
Giant Industries Inc., Scottsdale, Ariz., temporarily shut down its 14 million ethanol processing plant at Portales, N.M., because of sharply higher grain prices in U.S. Giant expects the plant to remain closed until fall 1996, when grain prices are likely to return to normal.
LNG
Pine Needle LNG Co. LLC added Municipal Gas Authority of Georgia and a subsidiary of Amerada Hess Corp. to the limited liability partnership, joining four other companies (OGJ, Sept. 11, p. 24). The company plans to build, own, and operate a $107 million liquefied natural gas peak shaving plant in North Carolina (OGJ, June, 12, p. 44).
Companies
Tennecos Packaging Corp. of America agreed to buy Mobil Chemical Co.s plastics division for $1.27 billion. Proceeds will fund growth in Mobil core businesses, including acquisitions.
USX Corp. jumped the 1995 capital budget authorization of its Delhi Group unit to $90 million from $38 million. Delhi capital spending in 1995 is expected to approach $75 million as a result. The increased budget will enable Delhi to take advantage of opportunities in the midstream natural gas industry.
Apache Corp. closed its purchase of all of Aquila Energy Resources oil and gas assets for about $192 million after adjustments (OGJ, Sept. 4, p. 41).
Tengasco, Knoxville, and Williams Energy Services Co., Tulsa, formed a joint venture to provide an alternative source of Gulf of Mexico gas supplies to Middle and East Tennessee. Tengasco will work with large industrial and utility consumers of gas in the region, offering alternative supplies under long term contracts at fixed or indexed prices, a service Tengasco said is not readily available in the region. Williams will provide gas supplies and transportation services to those customers.
Texaco Inc. will take a third quarter after tax charge of $55 million related to its continuing efforts to cut costs. By yearend 1996, staff cuts and asset sales will have reduced Texacos work force by 4,000. Under the original plan, disclosed in July 1994, Texaco expected to save about $300 million/year. Additional programs under way are expected to save another $150 million/year by yearend 1996.
Tesoro Petroleum Corp., San Antonio, expects to save about $10 million/year as a result of a restructuring and interest savings from debt reduction. Tesoro will save $4-5 million/year because of the restructuring. It will cut its work force by about 7%, or 60 jobs. It also will use proceeds from sale of its interests in Bob West field (OGJ, Sept. 11, p. 25) to cut debt, saving about $4-6 million/year.
Gulf Canada Resources Ltd. removed a ceiling on the cash component of a $193 million (Canadian) takeover bid for sister companies Czar Resources Ltd. and Orbit Oil & Gas Ltd (OGJ, Sept. 25, p. 44). The offer includes as much as $141 million in cash and $52 million for debt assumption and preferred shares. Czar and Orbit are sister companies. Ranger Oil Ltd., which made a $1.30/share offer for Czar alone, set an Oct. 20 deadline on its offer. Czar considers both bids inadequate. All are Calgary companies.
More than 90% of shareholders in Ranchmens Resources Ltd. voted to accept a $280 million (Canadian) purchase offer by Crestar Energy Inc. (OGJ, Aug. 28, p. 42). Both are Calgary companies. The acquisition will increase Crestar production by about 14,000 b/d of oil equivalent (boed) to about 68,000 boed. Production of both companies is evenly split between gas and oil. Crestar also will gain about $300 million in tax pool credits from Ranchmens under the deal.
Petro-Canada reported that nonresidents of Canada now hold about 24% of its voting shares. Under Canadian law, nonresidents of Canada cannot hold more than 25% of Petro-Canada voting shares. The company plans to activate, before that level of nonresident ownership is reached, a reservation facility for trades involving purchases of voting shares from residents of Canada by nonresidents on a first come, first served basis. Ottawa is privatizing state owned Petro-Canada (OGJ, Oct. 2, Newsletter).
Courts
General Skidding Corp., Kuala Lumpur, filed suit to block the bidding process in plans by the Nova Scotia government to sell its oil and gas assets (OGJ, Sept. 4, Newsletter). General Skidding seeks an injunction against Rothschild Canada Ltd., which is handling the sale for Nova Scotia. General Skidding charged that the sale process is biased to favor bids from larger Canadian oil companies based in Calgary. The Malaysian company has spent more than $1 million preparing a bid and wants a court hearing to present its case. Copyright 1995 Oil & Gas Journal. All Rights Reserved.
