INDUSTRY BRIEFS

GOVERNMENT

PAPUA NEW GUINEA wants to refinance its 22.5% interest in the Kutubu oil development project to gain immediate access to its share of production. Kutubu, which started up in June, is expected to produce 100,000-140,000 b/d (OGJ, July 27, p. 46). A Chevron Niugini Pty. Ltd. group paid all up front development costs, and the government is waiving its right to production until it has reimbursed the group for its share of costs, probably late next year. The government seeks to raise about $399 million.

REFINING

SUN CO. will reconfigure and downsize its 85,000 b/cd Tulsa refinery to focus on its lubricants and wax businesses. Branded gasoline marketing will be phased out in areas supplied by the Tulsa refinery, mainly Oklahoma, Iowa, and Missouri. The changes are to occur later this year and will eliminate about 200 of the 490 jobs at the refinery. The move follows a study of strategic options for the refinery (OGJ, June 3, 1991, p. 38).

VALERO REFINING CO., San Antonio, licensed UOP technology for all processes for a world scale 500,000 metric ton/year methyl tertiary butyl ether complex at its Corpus Christi, Tex., refinery. Licensed technology includes the Merox process for mercaptan removal, Butamer for butane isomerization, Oleflex for isobutane dehydrogenation, Huls for MTBE synthesis, ORU for oxygenate removal, and Huls complete saturation processes for olefin saturation. Start-up is scheduled for mid-1993.

GIANT REFINING CO., a division of Giant Industries Inc., Scottsdale, Ariz., claimed a national safety record in operating its 21,500 b/d refinery about 17 miles east of Gallup, N.M., for 15 years without a lost workday due to accident or injury.

CALIFORNIA AIR RESOURCES BOARD (CARB) reached a $100,000 settlement with Paramount Oil Co., Los Angeles, in the small refiner's alleged failure to meet state air quality rules by selling 616,686 gal of gasoline with Reid vapor pressure of 11.53 psi, exceeding state specifications of 7.8 psi during March-October. Paramount is required to meet CARB's clean air specifications for gasoline, an effort estimated to cost $150,000, at least 60 days in advance of smog season or pay CARB $150,000 if it fails to meet that deadline.

TANKERS

U.S. COAST GUARD issued a rule requiring oil tankers built after June 1990 to have double hulls and requiring phaseout of existing single hull tankers in 25 years. The rule, required by the 1990 Oil Pollution Act, applies to U.S. and foreign tankers moving oil in U.S. waters. The older, larger vessels will be phased out first, while many of the smaller vessels will have until 2020 to be retired or refitted.

DRILLING-PRODUCTION

LASMO NORTH SEA PLC'S 16/12a-17 appraisal well in the U.K. North Sea's Pine field flowed at a rate of 7,200 b/d of 37 gravity oil and 5.8 MMcfd of gas through a 52/64 in. choke with 1,542 psi wellhead pressure from upper Jurrassic Brae. The well has been suspended for reentry, and the Sedco 706 rig has been moved to the 16/12a-18 site for further appraisal of the South Birch discovery.

AMERICAN INTERNATIONAL PETROLEUM CORP. (AIPC), New York, 3 Puli on the Puli anticline in Colombia flowed at a combined rate of 1,710 b/d of 33 gravity crude and 2.65 MMcfd of gas from three intervals at 5,016-5,360 ft in Cretaceous Villeta. AIPC plans to drill 4 Puli about 1 1/2 miles north of 3 Puli.

DON NORSKE STATS OLJESELSKAP AS licensed Mobil Corp.'s Allpak gravel packing technology. It uses several perforated rectangular metal tubes welded to conventional gravel pack screens placed in the wellbore to allow alternative flow paths for gravel slurry. Allpak gravel packing allows 100% of the required amount of gravel to be packed in the well, whereas frequently only about 60-70% of the required volume of packing material can be used, Mobil said.

ARAKIS ENERGY CORP., Vancouver, B.C., secured a private placement valued at $2.74 million (Canadian) that will be used to fund an accelerated development program of its gas reserves in the Appalachian basin. Arakis is preparing an initial 25 well development program for gas fields in Southeast Kentucky, where it has 3.5 MMcfd of gas production. Arakis expects production to increase to 6-8 MMcfd when the wells are complete. Drilling is to begin Oct. 1.

SAUDI ARABIAN OIL CO. let a $21 million contract to a joint venture of Offshore Pipelines Inc. (OPI), Houston, and Maritime Industrial Services Co. Ltd., United Arab Emirates, for undisclosed offshore construction work in the Middle East. OPI's DB Hercules derrick barge will perform all offshore installation work, and its WM 7 jack up barge will perform all hookup and in field modification work.

PETROCHEMICALS

METHANEX CORP., Vancouver, and Hoechst Celanese Chemical Group, Dallas, plan to form a joint venture to restart and own Hoeschst Celanese's methanol plant at Clear Lake, Tex. Gulf Coast Methanol Co. will be owned 49% by Methanex, which will contribute about $70 million to the restart. Hoechst will own the remainder. Production capacity of 1,800 metric tons/day is expected on line in fourth quarter 1993.

METHANEX plans to acquire Metallgesellschaft Corp. and affiliates' interest in a joint venture with a unit of American Cyanamid that will redesign and convert American Cyanamid's idle ammonia plant near New Orleans to a 1,645 metric ton/day methanol plant. Methanex will fund the conversion for about $97 million and own about a 70% interest of the plant, with Cyanamid holding the remainder. Start-up is scheduled for yearend 1993. Methanex also plans to acquire Metalgesellschaft's methanol marketing and trading operations with volume of about 600,000 tons/year in Frankfurt.

ICI TAIWAN LTD.. started up its purified terephthalic acid plant at Kuan Yin, Taiwan. The plant is expected to reach full production of 350,000 metric tons/year by mid-1993. Taiwanese chemical industry officials predicted the start-up of a major new supplier could sharply lower area PTA prices. ICI reportedly is quoting a price almost $40/ton less than that set by China American Petrochemical, Taiwan's top PTA producer.

EXPLORATION

JAPAN PETROLEUM EXPLORATION CO. found oil and gas find with a wildcat in Northeast Japan's Akita prefecture that is producing 3,491 b/d of crude and 1.6 MMcfd of gas from five zones at 1,650-1,950 m. Total depth is 2,000 m.

AMERICAN INTERNATIONAL PETROLEUM CORP., suspended testing its 1 Maranon wildcat on the 960,000 acre Rio Planas association contract in Colombia's Llanos basin after encountering a 22 gravity oil column. AIPC said attempts to isolate a water zone were unsuccessful due to high permeability of the formation and proximity of an aquifer. AIPC is acquiring 108 km of additional seismic data and reprocessing 214 km of seismic covering eight other areas in the western part of the block. Another wildcat is to be drilled in December.

MALAYSIA'S Tongkah Holdings and Petrovietnam are completing arrangements for a joint venture that will process Vietnamese seismic data, OPEC News Agency reported. A seismic processing center is to be set up in Ho Chi Minh City, but most of the data is to be processed in Malaysia. Malaysian news agency Bernama reported Tongkah unit Tecknosif is to increase data processing capacity by 100% to 12,000 line km/month.

MINERALS MANAGEMENT SERVICE identified 761 blocks totaling 3.7 million acres it may offer in a Cook Inlet/Shelikof Strait lease sale in September 1994 (see map, May 11, p. 22). The tracts are 3-38 miles off Alaska in 1-1,300 ft of water. Next step in the process is preparation of an environmental impact statement.

LASMO PLC and C. Itoh Energy Development Co. signed an agreement with Petrovietnam to explore Block 04-2 between Dai Hung and Bach Ho fields off Viet Nam, about 160 km southeast of Ho Chi Minh City, Asahi News Service reported. C. Itoh and Lasmo recently signed a heads of agreement for the 50-50 partnership (OGJ, June 22, p. 38). Drilling is to begin in 1993 with Lasmo operating.

MOBIL NORTH SEA LTD. acquired a farmout from Aran Energy plc, Dublin, calling for Mobil to join Aran in its wholly owned Blocks 50/12, 50/16, 50/17, and 50/18 in the Celtic Sea. A well is planned for 1993.

GAS PROCESSING

C&L PROCESSORS PARTNERSHIP, a joint venture of Conoco Inc. and Mitchell Energy & Development Corp.'s Liquid Energy Corp. unit, completed the purchase of Oryx Energy Co.'s interests in 11 Oklahoma and two Texas gas processing plants for $127.5 million. In June C&L said it planned to buy Oryx interests in 14 plants (OGJ, June 22, p. 35). However, Trident NGL Inc., Houston, a majority interest holder in the Rodman gas processing plant in Garfield County, Okla., purchased all of Oryx's and Sun Operating LP's interest in that plant, making it sole owner.

COMPANIES

TENNECO INC. completed its $3 billion restructuring program, selling its pulp chemicals business to Sterling Chemicals Inc. for about $202 million. Tenneco's restructuring included selling noncore assets valued at $1.5 billion, issuing $716 million of new equity, capital spending cuts of $350 million, other cost reductions of $300 million, and improved cash flow and retained earnings of $250 million from a reduction in the common stock dividend.

BP AMERICA INC. said 1,575 employees accepted parent British Petroleum Co. plc's voluntary severance plan offer designed to cut as many as 600 jobs in Cleveland (OGJ, June 29, p. 47). BP employs about 3,400 persons in Northeast Ohio, and officials left open the possibility they might offer severance packages to more than the number of workers outlined in the original proposal.

DEUTSCHE BP AG plans to reduce its work force by more than 25% to less than 3,000 by yearend 1993 in a cost cutting move. The cuts will be mainly in refining operations and be implemented where possible through early retirement and nonreplacement. BP said Deutsche BP's oil operations would be spun off into a new unit, BP Oil Deutschland GmbH, effective Jan. 1.

AUSTRIA'S national oil company OMV AG plans to cut its work force of 6,000 employees by 1,000, OPEC News Agency reported. A rationalization program got under way in July after the company reported a loss of $45 million in the first half.

SHELL OIL CO. tentatively agreed to pay former shareholders $7.8 million to settle a dispute over a dividend paid after it became a wholly owned unit of Royal Dutch/Shell Group. If approved by a Delaware judge in October, it will be the third payment won by shareholders. Shell was ordered to pay $110 million to about 1,000 former stockholders that asked for court appraisal of Shell's stock at the time of the merger and to pay $37 million to 20,000 former shareholders for allegedly failing to fully disclose oil and gas reserves said to be worth more than $1 billion during the merger (OGJ, May 4, p. 54).

PETRO-CANADA agreed with a syndicate of Canadian underwriters to sell to the public all of its 21,071,908 common shares of natural gas pipeline operator Westcoast Energy Inc., Vancouver, B.C., for about $342 million (Canadian), representing about 37% of Westcoast's outstanding common shares. The sale price is $16.25/share payable in installments, with the first $8/share payable on closing, about Sept. 15, and the final $8.25/share payable 1 year later.

PIPELINES

ANR PIPELINE CO. chose not to renew its letter of intent with United Pipe Line Co. to build the SunCoast pipeline (OGJ, Dec. 9, 1991, p. 44) but said it will build its own intrastate line to move Mobile Bay gas to Florida. ANR's SunShine line will have initial capacity of 300-400 MMcfd and likely extend from the Florida Panhandle to Polk County in Central Florida. Meantime, United said it is committed to the SunCoast project and its size would be determined by customer demand.

COGENERATION

BRITISH GAS PLC and Tractebel of Belgium plan to build, own, and operate a $340 million gas fired cogeneration plant at Thai Olefins Co.'s petrochemical complex at Mab Ta Phud, Thailand. The plant will produce 160,000 kw of electricity and 360 tons/hr of steam. Petroleum Authority of Thailand will supply gas for the plant, which will be owned by British Gas 39.2%, Tractebel 9.8%, and Thailand 51%. Mab Ta Phud Cogeneration Co. will be established to develop the project.

ENVIRONMENT

U.S. ENVIRONMENTAL PROTECTION AGENCY issued rules setting standards for handling used motor oil but not under strict hazardous waste handling rules. EPA said only 10% of the nation's 190 million gal/year of used motor oil is recycled. The rest is spilled on land, in dumps, or sewers.

SPILLS

MINERALS MANAGEMENT SERVICE plans to propose sweeping rules to protect offshore areas against oil spills. The 1990 Oil Pollution Act requires MMS to set rules to prevent spills in all offshore areas, including state submerged lands. The rules will apply to owners of offshore oil facilities, including associated pipelines.