INDUSTRY BRIEFS

GEOTHERMAL

UNOCAL CORP. discovered a geothermal resource on its Sarulla block in Sumatra. Unocal gauged a total mass flow of 600,000 lb/hr from its 112 Silangkitang slimhole wildcat through 5 in. casing with 510 psi wellhead pressure. Unocal estimates the test rate is enough to generate 12,000 kw of electrical power. If drilled as a large diameter completion, the well could produce enough geothermal energy to generate 20,000-25,000 kw of power, Unocal said, compared with a worldwide average of 3,000-5,000 kw/well.

ELECTRICAL POWER

OCCIDENTAL ENERGY VENTURES CORP. signed a memorandum of understanding (MOU) with Bangladesh calling for development of a 300,000 kw gas fired power plant in the Meghna River basin near Dhaka. The plant will be fed by gas from Blocks 12, 13, and 14 in the Sylhet region that were awarded to Occidental Oil & Gas Corp. early this year (OGJ, Jan. 23, p. 19). Oxy said the power plant will be Bangladesh's first integrated energy project developed under a build-own-operate-transfer concept.

PETROCHEMICALS

PAKISTAN'S Ravi Chemicals Group signed a memorandum of understanding with the U.K.'s Alyph Ltd. to build a $45 million, 70,000 metric ton/year polypropylene plant at Karachi. Pakistan's current polypropylene demand of 50,000 tons/year is met solely by imports valued at $200 million/year. Demand is expected to grow 10%/year.

PAK-ARAB FERTILIZERS LTD., a joint venture of Pakistan and the U.A.E., shut down its Multan, Pakistan, ammonia/urea complex because of an undisclosed malfunction in the ammonia plant that could have incurred losses of about $300,000/day. More than $13 million was spent recently on revamping and maintenance of the complex. It isn't clear if or when the complex will restart.

REFINING

CORE REFINING CORP. agreed to buy Castle Energy Corp.'s 86,000 b/d Lawrenceville, Ill., refinery. CORE is a company formed by William Sudhaus, a director and president of Castle Energy, Radnor, Pa. CORE will pay Castle at closing an amount equal to adjusted working capital-about $23 million on Mar. 31-plus capital outlays at the refinery payable as a $5.5 million subordinated promissory note and the balance in cash. In addition, CORE will pay Castle for 8 years a royalty of as much as $20 million based on deliveries of Canada's Caroline field condensate by Shell Canada Ltd. under an existing supply contract.

ARCO PRODUCTS CO. and Shell Oil Products Co. signed a 3 year contract starting in March 1996 under which ARCO will supply Shell 30,000 b/d of California Air Resource Board (CARB) Phase II specification reformulated gasoline (RFG) in southern California. In exchange, Shell will supply ARCO 30,000 b/d of CARB Phase II RFG in northern California. As of June 1, 1996, state law requires CARB Phase II RFG be the only gasoline sold in California. ARCO needs 50,000 b/d of CARB Phase II RFG and is pursuing other such agreements to obtain the remaining 20,000 b/d.

PHILIPPINE PETROLEUM CORP., a unit of Royal Dutch/Shell Group, plans to build a $20 million asphalt plant next to its refinery in Rizal province, Philippines. Start-up is set for July 1996 at 120,000 metric tons/year. Capacity will reportedly be raised to 170,000 tons/year by 2000, of which 70% will be exported to China, Bangladesh, and Myanmar.

CLARK REFINING & MARKETING INC., St. Louis, let a $5.4 million, 3 year contract to Petrolite Corp., St. Louis, for supply and service of refinery process chemicals and finished fuel additives for its Hartford and Blue Island, Ill., refineries and 14 distribution terminals in the U.S. Midwest. Other such contracts with Ashland Chemical's Drew industrial division and Chevron Chemical Co.'s Oronite additives division call for supplying specialty chemicals to Clark. The contracts will allow Clark to cut specialty chemical costs by about $6.3 million.

DRILLING-PRODUCTION

SHELL EXPLORATION & PRODUCTION NAMIBIA BV plans to delineate its Kudu gas discovery off southern Namibia after completing evaluation of its recent 3D seismic survey. Kudu, on exploration license 2814A in 170 m of water, holds sizable gas reserves at 4,000 rn. Preparations are under way for further drilling and production testing this year. Operator Shell 75% and partner Engen 25% also are trying to secure long term sales contracts for Kudu gas.

UNITED MERIDIAN CORP., Houston, and partners Global Natural Resources Inc., Houston, and Pluspetrol SA, Buenos Aires, obtained as much as $70 million in project financing from World Bank's International Finance Corp. for development of Lion and Panthere fields off Cote d'lvoire (OGJ, May 15, p. 25).

ABACAN RESOURCE CORP., Calgary, 1 IMA appraisal well in NGO field on Nigeria's Niger Delta flowed 23,070 b/d of 38-500 gravity crude oil and condensate with some associated gas. Three earlier appraisal wells flowed 8,000 b/d, 14,000 b/d, and 19,000 b/d, respectively. For first phase NGO development, Abacan has commissioned a 50,000 b/d production facility. Plans call for spudding this week 2 IMA appraisal in an effort to extend the field southeast.

MARATHON PETROLEUM EGYPT LTD.'S 3 Ras El Ush appraisal well flowed 4,358 b/d of 36.20 gravity oil with 310:1 GOR and 177 psi flowing tubing pressure through a 96/64 in. choke. Flow was from a 100 ft perforated interval after the well cut 240 ft of net pay in Cretaceous Nubia at 2,409-2,649 ft. The well, an updip appraisal of Marathon's 2 Ras El Ush discovery on the Gebel El Zeit concession in the southern Gulf of Suez off Egypt, also cut 21 ft of net pay in Cretaceous Matulla that was not tested. Plans are to tie the 2 and 3 wells into existing facilities via pipeline, allowing production start by yearend.

MARATHON OIL U.K. LTD. deepened its 1985 well that found Braemar field on U.K. North Sea Block 16/3c. The deepened hole found upper Jurassic pay below the 1985 discovery's pay zone. A drillstem test in the 1985 well flowed 40 MMcfd of gas and 2,900 b/d of condensate through a 56/64 in. choke. The deeper pay flowed 9 MMcfd of gas and 530 b/d of condensate through a 32/64 in. choke. A 3D seismic survey of Braemar is planned this year.

ELF PETROLEUM NORGE AS began production from Froy field in the Norwegian North Sea. The field, on Block 25/5, was developed with an unmanned wellhead platform controlled from Frigg field, where Froy output is processed. Elf pegs Froy development cost at $860 million. Reserves are estimated at 110 million bbl of oil and 106 bcf of gas. Froy oil goes to the Frigg complex, then into the Frostpipe export line to Oseberg field for further shipment to Sture terminal near Bergen. Gas moves to the Frigg complex, then through the Norwegian gas pipeline system to St. Fergus terminal in Scotland.

BELDEN & BLAKE CORP., North Canton, Ohio, signed a letter of intent to buy oil and gas leases and other assets from Quaker State Corp. for $56 million. Involved are interests in about 1,460 producing oil and gas wells in New York, Pennsylvania, Ohio, and West Virginia holding combined reserves of about 2.2 million bbl of oil and 41.9 bcf of gas, about 250,000 leasehold acres in New York, Pennsylvania, and southern Ohio, and 250 miles of gas gathering lines.

KENTING ENERGY SERVICES LTD., a unit of Trimac Ltd., Calgary, bought Argentine drilling company Cadesa Cia. Argentina de Servicios SA for $11.3 million. Cadesa owns 13 drilling and workover rigs.

PHILLIPS PETROLEUM CO. U.K. LTD. let a $3 million contract for well testing to Expro Group International plc, Aberdeen. The 2 year contract includes surface testing of platform and subsea wells off the U.K.

NORWAY'S Den norske stats oljeselskap AS let a $20 million contract to Aker AS, Oslo, for modifications to riser platform 16/11-E in the Sleipner area in the Norwegian North Sea. The work, to be complete in spring 1997, involves linking the platform to the Zeepipe 1113 pipeline to the Kollsnes onshore terminal. Then the new pipeline will transport Troll field gas to Europe via the 16/11-E transport hub.

JKX OIL & GAS, Guildford, U.K., obtained a license to develop Inchke-More oil field off Dagestan in the Caspian Sea. JKX is operator and 30.5% interest holder in the Caspian Oil Development venture with local and Russian partners (OGJ, Jan. 30, p. 34). The venture aims to place Inchke-More on stream early next year, making it the first western led development project to produce oil from the Caspian.

FOUNTAIN OIL INC., Houston, agreed to form a venture with Ukraine National Oil Co. to further develop four undisclosed oil fields in western Ukraine. Present production is limited to 280 b/d, mainly from one field, because of drilling restrictions in the environmentally sensitive area. Fountain intends to slant drill from outside the restricted area to tap remaining reserves in the producing field estimated at 60 million bbl.

EXPORTS-IMPORTS

JAPAN'S National Federation of Agricultural Cooperative Associations, taking advantage of Japan's coming liberalization of refined products imports in early 1996, plans to import gasoline from South Korea starting in April 1996. The wholesale price for the imported gasoline is expected to be 20% less than through existing distributors. Import requirements are estimated at 1.887 million bbl the first year.

COMPANIES

HUGOTON ENERGY CORP., Wichita, signed a definitive agreement to acquire Consolidated Oil & Gas Inc., Denver, for about $110 million in cash and stock. Reserves to be acquired total 130 bcf of gas equivalent at a cost of 73/Mcfe.

EXPLORATION

OMV (PAKISTAN) EXPLORATION GMBH and partners obtained a license to explore Southwest Miano Block 2668-3 covering 1,967.3 sq km in Pakistan's Sindh province. The group is to shoot 400 line km of seismic survey and drill one wildcat under an initial 3 year term and $12 million commitment. Interests are operator OMV 35%, Hardy Oil & Gas (U.K.) Ltd. and Pakistan Petroleum Ltd. 30% each, and Pakistan's government 5%.

TULLOW OIL PLC, Dublin, exercised an option to acquire from Sabre Petroleum Ltd. a further 7.5% interest in the East Basin extension license area in Pakistan for $1 million. This brings Tullow's stakes in the area's Blocks A, B, and C to 47%, 60%, and 47%, respectively. Tullow intends to fund the acquisition by issuing more than 1.3 million ordinary shares.

LASMO PLC, London, acquired a 25% interest in Block 2012 off Namibia under a farmout from operator Sasol Ltd., Johannesburg. The Nedrill 1 drillship was to spud by the end of May a wildcat in 680 m of water on the block. It is the only obligation well under a license issued in September 1992. The block covers 11,500 sq km, with water depths ranging from 50 m in the east to more than 1,000 m in the west.

LL&E ALGERIA LTD.'S 1 MLE wildcat on Menzel Ledjmet Block 405 in Algeria's Ghadames basin flowed 43 MMcfd of gas and 1,724 b/d of condensate from three zones. The well was drilled to 14,458 ft and suspended. Interests in the discovery are LL&E 65% and Talisman Energy Inc. 35%. State owned Sonatrach retains an option to participate in any development.

GAS PROCESSING

WESTCOAST ENERGY INC., Vancouver, B.C., will appeal to the Federal Court of Canada the dismissal by Canada's National Energy Board (NEB) of its application to build its $400 million (Canadian), 320 MMcfd Aitken Creek gas processing plant (OGJ, Oct. 31, 1994, p, 29). NEB said it has no jurisdiction over the project in Northeast British Columbia. The ruling could delay Aitken Creek start-up by more than a year to mid-1997.

TRANSOK INC., Tulsa, let contract to Pro Quip to build a 120 MMcfd gas processing plant east of Rush Springs, Okla. Start-up date is Dec. 1.

PIPELINES

U.S. DEPARTMENT ALL LABOR ruled a safety inspector working for a contractor hired by Alyeska Pipeline Service Co., operator of the Trans-Alaska Pipeline System (TAPS), was fired unfairly for pointing out TAPS safety and environmental problems. The inspector, fired by Alyeska in what federal officials ruled was retaliation for whistleblowing, also was fired by Arctic Slope Inspection Service. Alyeska will appeal the ruling, and hearings will be held this year. Several other former Alyeska employees are pressing similar firing complaints against the company.

ARCO BRITISH LTD. will use Allseas Marine Contractors SA of Switzerland early in 1996 to lay a 56 km, 20 in. gas pipeline and a 3 in. glycol line between Trent and Tyne fields in the U.K. North Sea, as well as a 1 km, 24 in. gas line from Trent to the existing Esmond trunk line. Allseas will perform detailed engineering, procure coating and anodes, lay the pipelines, and install tie-ins at Tyne, Trent, and the Esmond system. The company's Lorelay and Trenchsetter vessels will perform the offshore work.

NATURAL GAS PIPELINE CO. OF AMERICA (NGPC), Lombard, Ill., will proceed with plans to provide new transportation service from Northern Border Pipeline Co.'s delivery points at Ventura and Harper, Iowa, to Chicago and other markets (OGJ, Apr. 17, p. 30). An open season that ended May 17 netted bids for almost 800 MMcfd of firm service on NGPC's proposed 150 mile line from Northern Border's line near Ventura to NGPC's Amarillo line at Harper. It is to be in service by Nov. 1, 1997. A separate, concurrent open season drew 900 MMcfd of added firm service on NGPC's Amarillo system from Harper to Chicago.