COURTS
A $600 MILLION LAWSUIT by Syncrude Canada Ltd. and eight other plaintiffs against Stearns Catalytic Ltd., Calgary, and parent Air Products & Chemical Inc. got under way in Edmonton. The trial could last 2 years. The plaintiffs allege a faulty pipe carrying superheated bitumen ruptured under pressure and caused a 1984 fire at Syncrude's Fort McMurray, Alta., oilsands plant. They allege a 31 day production shutdown cost Syncrude about $104 million, and lost royalty and equity interest totals more than $280 million.
COGENERATION
WESTCOAST ENERGY INC., Vancouver, B.C., signed a letter of intent with MacMillan Bloedel Ltd. for a $160 million cogeneration plant at Powell River, B.C. The 180,000 kw, gas fired plant will serve a pulp and paper mill at Powell River.
PT PETROKIMIA GRESIK let an $8.7 million contract to GE Power Generation for a 38,300 kw, GE MS6001, gas turbine generator for a cogeneration plant to provide process steam and electrical power for a petrochemical complex expansion project at Surabaja, Indonesia. Steam from the unit will be used for ammonia/urea processing. The equipment arrived at the site in April, and commercial steam generation is expected by yearend.
DRILLING-PRODUCTION
LOUISIANA LAND & EXPLORATION CO. 3-36 Big Horn in Fremont County, Wyo., began gas sales May 4 at a rate of about 5 MMcfd, likely from Cretaceous Frontier. The well blew out and caught fire 3 weeks ago (OGJ, Apr. 27, p. 30). LL&E plans to begin snubbing operations soon to determine the amount of fill in the wellbore and assess mechanical integrity of downhole equipment and tubulars.
SAGASCA RESOURCES and Arrow Petroleum, joint venture partners in Beharra Springs gas field in Western Australia's northern Perth basin, agreed to sell Alcoa of Australia's Pinjarra and Kwinana alumina refineries as much as 38.6 bcf of additional gas after 1996. Along with a contract that took effect in January, Beharra Springs will supply Alcoa a total of 76 bcf the next 15 years. Beharra Springs, discovered in the late 1980s, is producing 3.9 MMcfd of gas from two wells. Plans call for a gas processing plant to be built in the second quarter. A third well is planned for August-September. Interests are Sagasco 67% and Arrow 33%.
A GROUP led by Cabinda Gulf Oil Co., a Chevron Corp. unit, let a turnkey contract of undisclosed value to ABB Lummus Crest to supply and install two production platforms about 40 miles off Angola's Cabinda enclave in about 100 m of water. With completion scheduled for mid-1994, the platforms will handle 100,000 b/d of oil and 126 Mcfd of gas. Cabinda Gulf's partners in the project are Agip Angola Ltd., Elf Aquitaine Angola, and Soc. Nacional de Combustiveis de Angola.
BANNON ENERGY INC., Houston, plans to drill offset wells this year and next on producing leases in the Texas and Oklahoma panhandles. Bannon acquired working interest in the leases, which have 49 producing wells and undeveloped acreage, from OTC Petroleum Corp., Oklahoma City, for $8.3 million.
MAYNARD OIL CO., Dallas, will halt contract drilling operations carried out by its BDK Drilling Co. unit because of soft markets. BDK's operations are mainly in South Texas. In 1991 contract drilling accounted for about 28% of Maynard's revenues but had an operating loss of $897,521. Maynard expects to sell its six rigs and related equipment.
DI INDUSTRIES INC., Houston, moved two carrier mounted Ideco BIR800 drilling rigs from its Michigan fleet to Neuquen field in Argentina and spudded the first of 24 wells for PlusPetrol. The second rig is moving to another Neuquen location. DI plans to deploy 50 of its 108 U.S. rigs to markets outside the U.S.
TEXACO INC. let contract to Intec Engineering Inc., Houston, for a deepwater subsea system conceptual design study tailored to the Gulf of Mexico. A series of foundation studies has begun that deals with deepwater technology issues. Study results will form the design basis for commercial development of Gulf of Mexico tracts in water depths to 5,000 ft. The study is to be complete by yearend.
SOUTH CHINA SEA oil production surpassed China's target by 9,530 b/d, averaging 59,370 b/d in the first quarter, Xinhua News Agency reported. Huizhou 21-1 and Huizhou 26-1, the only fields on stream in the region, are under joint development by Nanhai East Offshore Oil Corp. and ACT Operators Group. China's South China Sea oil production is expected to reach 100,000 b/d by 1995.
EAST CHINA'S Anhui Province opened three oil fields, marking first hydrocarbon production for the province. The fields in Tianchang County reportedly have total proved reserves of more than 29 million bbl of oil and will have production capacity of 800-1 000 b/d
U.S. EXPORT-IMPORT BANK will guarantee $11.8 million for the sale of $13.45 million in drilling equipment and services to Alcorn Production Philippines Inc. for use in developing West Linapacan oil field (OGJ, Feb. 24, p. 32), northwest of Philippines' Palawan Island.
U.S. SUPREME COURT accepted a case, U.S. vs. Hill, regarding calculation of the alternative minimum tax's application to oil and gas depletion deductions. The Justice Department said unless a lower court's ruling is overturned, the tax treatment could cost the government more than $1 billion/year. The case will be heard in the fall.
ENCOR INC., Calgary, completed the sale of its interests in licenses covering undeveloped South Kupe and Toru gas fields off western New Zealand to an undisclosed buyer. Proceeds from the sale total $23 million (Australian). Encor closed its office in New Plymouth May 1 as a result of the sale. Other interests in the area will be managed from Calgary.
REFINING
LYONDELL PETROCHEMICAL CO., Houston, let contract to Xytel-Bechtel Inc., also of Houston, for design engineering, procurement, and fabrication of a skid mounted benzene stripper system to conform wastewater streams at its Houston refinery to federal hazardous air emissions standards under the Clean Air Act. Design engineering is in progress with delivery expected in September. The unit is to start up by yearend.
DIAMOND SHAMROCK INC., San Antonio, let contract to ABB Lumus Crest Inc., Bloomfield, N.J., for engineering and procurement services on a 15,000 b/sd delayed coker at its 111,000 b/cd McKee refinery and gas processing complex at Sunray near Dumas in Moore County, Tex. The unit will be expandable to 25,000 b/sd and capable of producing fuel grade and anode grade green coke.
ERGON REFINING INC. started up the second phase of a naphthenic project at its Vicksburg, Miss., refinery. Capacity for very severely hydrotreated naphthenics will increase to 6,500 b/d from 3,500 b/d. Crude distillation capacity will rise to 25,000 b/d from 16,800 b/d. The $25 million expansion will start up in July. Ergon will install a second high pressure hydroprocessing unit during a third phase to be complete in fourth quarter 1993.
PETROCHEMICALS
NEBRASKA approved a law extending a 20/gal tax credit for ethanol production in the state. The credits will remain in effect until Dec. 31, 2000. The state's ethanol production tax credits have a ceiling of $5 million/plant or $25 million during a 5 year period. And for the first time the credit is available to ethyl tertiary butyl ether produced in the state. By yearend Nebraska is expected to have three ethanol plants operating with combined capacity of about 69 million gal/year.
EXXON CHEMICAL CO.'S polymers group agreed with Mitsui Petrochemical Co. to commercialize next generation ethylene polymer resins made from single site catalysis and advanced technology gas phase processes by the mid-1990s. Exxon said the agreement is a continuation of years of joint development work covering catalysts, process technology, and production applications.
EXXON CHEMICALS LTD. let contract to Snamprogetti Ltd., Basingstoke, England, to provide detailed engineering and general services for a liquids phase C4 cut butadiene-selective hydrogenation unit at its Fawley plant in southern England. The unit is part of Exxon's plan for environmental improvements at Fawley.
COMPANIES
ETHYL PETROLEUM ADDITIVES INC., Richmond, Va., agreed to buy the petroleum additives business of Amoco Petroleum Additives Co. Assets include a plant at Natchez, Miss., and related technology. Total value of the deal is estimated at more than $100 million. About 150 Amoco employees will join Ethyl. The purchase is to be complete in June.
TENNECO INC. will sell its Tenneco Minerals Co. to Solvay America Inc. for $500 million as part of its restructuring program (OGJ, Nov. 11 1991, p. 22). Tenneco said actions taken thus far in the restructuring have generated revenues or savings totaling $3 billion.
ARKLA INC. approved plans to intensify a cost cutting program, increasing cuts to at least $40 million/year from $30 million/year. The company plans to sell nonstrategic assets valued at $190 million, which it expects will trim debt by more than $150 million in 1992.
EXPLORATION
UZBEKISTAN'S oil well blowout is under control after more than 2 months of flowing at rates reported to be as much as 35,000-62,000 b/d (OGJ, Apr. 27. p. 25). About 2.19 million bbl of oil have been recovered, and Reuters reported the well was to start supplying refineries last week. Some officials speculated the discovery may have tapped a reservoir capable of supplying about half of Uzbekistan's oil demand.
WATANA SOPHONPANICH CO., a private Thai firm belonging to Bangkok Bank's Sophonpanich family, acquired a farmout on a 5% interest in the 10,664 sq km B8/32 concession in the Gulf of Thailand from a group led by Denmark's Maersk Olie og Gas AS. The group shot 4,430 line km of 2-D seismic on the block, near gas fields operated by Unocal Thailand, and plans to spud a wildcat by yearend. Other interests are held 31 /3% each by operator Maersk, Pogo Producing Co., and Rutherford/Moran Oil Corp.
ARGENTINA'S Bridas Co. acquired the right to explore for and develop oil in a 10,000 sq km area near Yashlar in Turkmenistan. Bridas will hold a 75% interest in a joint venture with the republic's Turkmengeologiya.
ASAMERA OIL (INDONESIA) LTD.'S 1 Kuala Langsa wildcat on Block A in Sumatra cut a net gas pay zone of about 705 ft at a depth of about 10,825 ft (OGJ, Apr. 6, p. 39). The gas zone is believed to be a reefal buildup in lower Miocene Peutu limestone with average porosity of 14%. Preliminary data show the reservoir is overpressured. Mechanical problems while running casing delayed operations, but the company expects to drill deeper and complete drilling operations by mid-May, then begin production testing. The well is the second in a six well program. The third well was spudded Mar. 11.
AMOSEAS INDONESIA INC.'S 1 Gajah Abu Abu wildcat on Block A in the Natuna Sea off Indonesia flowed at a rate of 3,563 b/d of 50.11 gravity oil and 8.8 MMcfd of gas through a 1.95 in. choke with 335 psi flowing tubing pressure from Tertiary sand at 3,827-89 ft. The well was plugged and the rig moved off location while Amoseas considers further exploration in the area. Site is about 32 miles southeast of Anoa field, placed on production in November 1990 by Amoseas (OGJ, Dec. 3, 1990, p. 52).
MAXUS ENERGY CORP. plans to spud a wildcat on the Recetor block in Colombia's Llanos basin by the end of the month. The well is projected to 17,000 ft, and the company expects to reach the first target at a depth of 10,000 ft. Maxus said the well will take at least 9 months to drill and evaluate. It holds a 90% interest in the block and British Petroleum Co. plc the remainder.
FIRST EXCHANGE CORP.'S Right to acquire, process, and market seismic data covering Equatorial Guinea's unlicensed areas (OGJ, Mar. 9, p. 42) does not cover seismic data currently deposited with Petroconsultants SA, Geneva, official marketing agent for all existing seismic data covering Equatorial Guinea.
PIPELINES
EASTEX ENERGY INC., Houston, completed pipeline interconnects and began offering third party transportation and exchange services through the Houston Hub regional market center at the Rotherwood gas storage site in Harris County, Tex. Houston Hub consists of main line interconnects with Natural Gas Pipeline Co. of America, Trunkline Gas Co., Tennessee Gas Pipeline Co., United Gas Pipe Line Co., and Enercorp Gas Transmission System Inc. Eastex as operator of Rotherwood and the Houston Hub, is arranging fixed rate transportation fees to exchange gas with Henry Hub in South Louisiana through common interconnects.
TRANSCANADA PIPELINES LTD., Calgary, let two contracts for expansion of its natural gas system. Majestic Pipeliners Ltd. received a $47 million (Canadian) contract to lay 98 miles of 48 in. pipeline in Saskatchewan. Bannister Pipelines Ltd. was awarded a contract to lay 70 miles of 48 in. line in Manitoba. Both projects are to be complete this fall. Meantime, Canada's National Energy Board approved a 13.25% rate of return for TransCanada in a negotiated settlement with gas shippers.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
