INDUSTRY BRIEFS
Companies
Anderson Exploration Ltd. opened a bidding war with a counteroffer for Home Oil Ltd. Anderson offered a $1.23 billion (Canadian) stock based bid to compete with an earlier $1.1 billion bid by Amoco Canada Petroleum Ltd. The Anderson offer includes assumption of Home's $400 million debt. Amoco is offering $16.50/share plus takeover of Home debt. Both offers expire Sept. 7. Home also is talking with other potential bidders. Meanwhile, Amoco's bid for Home received clearance from U.S. and Canadian regulatory agencies. All three companies have their headquarters in Calgary.
Cometra Energy Ltd., a unit of Belgium's Electrofina SA., bought the Canadian subsidiary of Hardy Oil & Gas plc, London, for $30 million. Hardy's Canadian unit holds estimated reserves of 2.3 million bbl of oil and 15.5 bcf of gas. Another $735,000 may be payable to Hardy, depending on future production.
Mobil Corp. reached a settlement with the U.S. Internal Revenue Service over claims dating to 1979-81 that Mobil should have charged its affiliates higher prices than those required by Saudi Arabia for crude oil Mobil bought from Arabian American Oil Co. The amount of additional tax paid was not disclosed, but Mobil said the settlement won't affect its earnings because it is covered by excess foreign tax credits.
Gas storage
NE Hub Partners LP, Houston, is holding an open season Aug. 9-Sept. 8 for Phase II firm storage capacity at its Tioga salt cavern gas storage project planned in Tioga County, Pa. Phase II offers 2.5 bcf of working gas capacity with initial service available in winter 1998-99. Phase I was oversubscribed threefold (OGJ, July 31, p. 42). NE Hub is a unit of Market Hub Partners, a partnership led by Tejas Power Corp., Houston.
Pipelines
Canada's National Energy Board ordered an inquiry into pipeline safety following a line rupture and explosion in Manitoba in late July (OGJ, Aug. 7, p. 36). The accident occurred near Rapid City, where six gas pipelines on the main line system of TransCanada PipeLines Ltd., Calgary, pass through the area. Four of the lines were damaged in the blast. No one was hurt, but gas deliveries were reduced. The board inquiry will focus on stress corrosion cracking, blamed for seven explosions on Trans- Canada's system since 1985.
Alberta Energy & Utilities Board ordered Nova Gas Transmission Ltd. to cut its pipeline tolls the rest of 1995 pending a final decision on Nova's 1995 general rate application, the company's first in 41 years. Producers are questioning the 12.5% rate of return Nova seeks for 1995. Nova claims the return is needed to meet producer demands for pipeline expansion. The board says Nova can charge only for toll rates set in December 1994. That rate is 25 (Canadian)/Mcf vs. the current charge of 28/Mcf.
Maersk Olie Og Gas AS, Esbjerg, Denmark, hired Allseas Marine Contractors SA, Switzerland, to install a 77 km, 24 in. pipeline and valve station as part of the Svend/Harald fields development in the Danish North Sea. The site is about 200 km west of Esbjerg in 37-65 m of water. Allseas will lay the pipeline from the existing East Tyra F platform to the planned West Harald A platform in summer 1996.
Colombia's state owned Empresa Colombiana de Petroleos (Ecopetrol) shut down indefinitely the country's main crude oil export pipeline from Cano Limon field to the Caribbean port of Covenas after an Aug. 15 explosion ruptured a section near El Carmen in Norte de Santander province. Officials suspect sabotage by local guerrillas, who have bombed the line 30 times this year.
Amoco Colombia Petroleum Co. and its partners in Colombia's Opon association contract area signed a letter of understanding with Ecopetrol to lay an 88 km pipeline from Opon in the Middle Magdalena Valley. The line will transport gas and condensate to Ecopetrol's gas processing plant at El Centro, then to Ecopetrol's Barrancabermeja refinery. Ecopetrol also agreed to buy 80 MMcfd of Opon gas the first 3 years of production and 40 MMcfd for 12 years thereafter. The 4 Opon well, drilled to 12,800 ft and scheduled to be completed this month, is to supply contract volumes.
Refining
Giant Industries Inc., Scottsdale, Ariz., agreed to buy the 18,000 b/d Bloomfield, N.M., refinery and related pipeline and other assets from Gary-Williams Energy Corp., Denver, for $55 million plus cost of crude and product inventories. The deal also calls for possible contingency payments based on refinery performance the next several years.
Exploration
Enterprise Oil plc, London, 21/20a-5 new pool wildcat near Nelson field in the U.K. North Sea found hydrocarbons in Jurassic pay at more than 14,000 ft. The Bligh prospect well, suspended as a potential producer, flowed 14.5 MMcfd of gas and 2,400 b/d of condensate.
Lasmo plc, London, and Canadian Occidental Petroleum Ltd, Calgary, won exploration rights to the Boqueron block in Colombia's Upper Magdalena Valley. Interests in the 242,000 acre tract are operator Lasmo 60% and CanOxy 40%. The block is on trend with four fields Lasmo found in the adjacent Espinal block. A 150 line km seismic survey is to begin by yearend.
U.S. Commerce Department overruled Florida's objections and found Mobil Exploration & Producing U.S. Inc. can drill a wildcat on Pensacola Block 889 1312 miles off Pensacola, Fla., in the Gulf of Mexico. Florida had complained the wildcat was inconsistent with its coastal zone management program.
Oilsands
Gibson Petroleum Ltd., Calgary, will take over Alberta's oilsands underground test facility in September. Gibson bought 8.33% of the operation in March from Conoco Canada Ltd. and now transports and markets half the oil produced from the facility, which has eight other commercial partners. It was established in the Fort McMurray area in 1984 by the Alberta government to test new methods of oilsands production.
Petrochemicals
Polimera Europa Srl, a venture of Italy's Enichem and Union Carbide Corp., let contract to Snamprogetti SpA for design, procurement, and construction of a 400,000 metric ton/year polyethylene plant at Brindisi, Italy. The plant, to be on line by August 1997, will use Union Carbide's Unipol process.
Amoco Chemicals Europe and Total agreed to conduct a feasibility study for a 350,000 metric ton/year paraxylene plant at Total's Dunkirk, France, or Flessingen, Netherlands, refineries. Ownership would be Amoco 80%, Total 20%. Amoco will supply technology. The project also will help relieve gasoline surplus capacity in Europe by diverting feedstock to another use.
Bulgaria's
state owned Neftochim hiked production from a 150,000 metric ton/year ethylene plant at its Burgas, Bulgaria, petrochemical complex to design capacity, feeding all downstream units. The Neftochim ethylene project uses M.W. Kellogg Co.'s Millisecond technology in six furnaces to crack naphtha and liquefied petroleum gas feedstock. It was carried out by Kellogg, Kawasaki Heavy Industries Ltd., and Mitsubishi Corp.
Union Carbide Corp. will build a 300 million lb/year butanol plant at an undisclosed site on the Gulf Coast, to start up in 1998 and duplicate one under construction at its Taft, La., petrochemical complex. The two plants will boost Carbide's butanol capacity to 1.2 billion lb/year.
Alternative fuels
Williams Energy Ventures, a unit of Williams Cos., Tulsa, closed its purchase of Pekin Energy Co., the second biggest U.S. ethanol producer, from a partnership led by Texaco Inc. for $167 million (OGJ, June 12, p. 46). Pekin produces about 100 million gal/year from corn.
Drilling-production
Gulf Canada Resources Ltd. and Talisman Energy Inc. reached initial agreement for $450 million in financing with Itochu Corp. and Sumitomo Bank Ltd. for the $650 million Corridor block gas field development in Indonesia. The project calls for producing, processing, and transporting 300 MMcfd of gas from Central Sumatra fields to the giant Duri steamflood project in North Sumatra. About 45,000 b/d of oil, or 20% of Duri production, is used to generate steam for enhanced recovery. Included is a 335 mile gas pipeline with a 175 mile spur to Batam that state owned PT Gas Negara will lay at a cost of $600 million.
BP Norge UA started production from South Gyda field through a single extended reach well drilled from Gyda platform on North Sea Block 2/1 off Norway. The well has a total measured depth of 7,268 m and began production at about 8,000 b/d of oil. Its horizontal section is at a depth of more than 4,000 m. Temperature in the horizontal section of the well is 154 C. BP said this is the first time an extended reach well has been drilled at such depth and temperature in the North Sea.
Elf Petroleum Nigeria Ltd. started a $300 million development program in Ofon field on Block OML 102, about 50 km off Nigeria. The project calls for two drilling platforms with 24 wells, one production platform, and one flare platform. Production is to start in early 1998 and peak at 55,000 b/d by 2000. Ofon crude will move to the existing Odudu terminal through a 40 km pipeline. The project almost completes Elf's $1.7 billion Offshore Nigeria development program, expected to plateau after 1998 at 170,000 b/d and recover 500-700 million bbl of oil.
Benton Oil & Gas Co., Carpinteria, Calif., boosted production from Uracoa oil field in Monagas, Venezuela, to 17,000 b/d from 6,700 b/d a year ago. Benton-Vinccler, the company's 80% owned Venezuelan venture, is reactivating and further developing Uracoa, Bombal, and Tucupita oil fields in the South Monagas Unit under Venezuela's marginal fields program. Benton drilled 21 wells and reactivated 15 others, with plans for another 65 development wells. A second 3D seismic survey, costing $4 million, is under way in Uracoa field.
Shell U.K. Exploration & Production resumed oil production from U.K. North Sea Brent Bravo platform Aug. 11. Flow is to be built to about 45,000 b/d by yearend. The plaform had been shut down since July 1994 as part of Shell Expro's $2.08 billion redevelopment of Brent oil field (OGJ, Aug. 7, p. 32). Commissioning work will continue to allow start-up of gas deliveries from the platform in September. The next platform marked for shutdown in connection with the redevelopment project is Brent Charlie, where work is under way with an eye to shutdown in spring 1996.
Belden & Blake Corp., North Canton, Ohio, completed its purchase of most of Quaker State Corp.'s upstream assets, mainly in the Appalachian basin, for $59 million (OGJ, June 5, p. 28).
Marathon Petroleum Indonesia Ltd. started production from KRA field in the Natuna Sea off Indonesia at a rate of 5,700 b/d of oil. Production is to peak late this year at 35,000 b/d. The project is part of concurrent development of KG field, 712 miles away, which is producing more than 25,000 b/d.
BDM-Oklahoma Inc., Bartlesville, Okla., is seeking proposals on behalf of U.S. Department of Energy from independent producers to conduct field projects involving use of gas to repressure oil reservoirs. Each contract will be cost shared and funded to a maximum of $150,000 by DOE. Deadline for proposals is Dec. 29, contracts are to be awarded within 90 days of that date, and all projects are to be complete by June 30, 1997.
LPG
Japan's Ministry of International Trade & Industry plans to draft a bill to deregulate in 1996 the country's retail liquefied petroleum gas market. About 60% of Japanese homes use LPG, and while there are 35,000 gas retailers, many of them small businesses, there is no competition among them.
Meghalaya Fuels, a unit of India's Modi LPG Ltd., plans to import, bottle, and market LPG in northern and southern Bangladesh through the port of Mongla in that country. It plans to acquire bulk LPG from the Middle East and Southeast Asia and bottle it at a plant to be built near Khulna.
Safety
Training workshops are scheduled Sept. 21 in Kenner, La., and Sept. 26 in Houston to train operators in the American Petroleum Institute's recommended practices for developing safety and environmental programs for Outer Continental Shelf operations. The workshops are sponsored by API, Minerals Management Service, National Ocean Industries Association, and U.S. Coast Guard.
Terminals
Alyeska Pipeline Service Co., operator of the Trans-Alaska Pipeline System, will spend $93 million to install vapor recovery systems at the two of four loading berths at the Valdez, Alas., tanker loading terminal by February 1998. The move is prompted by an Environmental Protection Agency rule that aims to reduce volatile organic compounds.
Labor
Workers for Azerbaijan's biggest oil and gas producer, May 28th Oil & Gas Enterprise, went on indefinite strike Aug. 15 over nonpayment of wages. The company, a unit of State Oil Co. of Azeri Republic (Socar), accounts for 65% of Azeri oil production. The local trade union said Socar owes both of its producing associations the equivalent of about 53 billion Russian rubles. Socar in turn is owed the equivalent of more than 730 billion rubles by the Azeri State Fuel & Energy Committee, the only marketer of refined products in Azerbaijan.
More news on p. 74
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