INDUSTRY BRIEFS

EXPLORATION

GARNET RESOURCES CORP., Houston, 1 Miraflor wildcat in the Putumayo region of Southwest Colombia pumped at a rate of 2,315 b/d of oil on a 10 hr commingled test of lower Cretacous Villeta N, U, and T sands at 5,868-6,698 ft. Volume was restricted by surface pump capacity. Production from the Cretaceous Caballos sand, swab tested last October (OGJ, Oct. 21, 1991, p. 36), will be added after partial depletion of the Villeta zones.

OCCIDENTAL OF OMAN INC.'S 1 Irq al Katarah wildcat on the 2.9 million acre Suneinah block in Oman flowed at a stabilized rate of 1,150 b/d of 38 gravity oil through a 1/2 in. choke with 395 psi flowing tubing pressure from lower Cretaceous upper Shuaiba carbonate at 4,686-4,730 ft. GOR was 450:1. The well is 24 miles from Oxy's 26,000 b/d Safah field which also taps Shuaiba. Oxy holds a 65% working interest in the Suneinah block, Neste Oy 35%.

REFINING

MOBIL CHEMICAL CO. is building a $14.3 million, 2 million gal/year chemical reactor train at its Edison, N.J., additives plant to meet increasing worldwide demand for automotive fuel and lube additives. It is the second train built at the plant since 1989.

FIVE JAPANESE BANKS agreed to provide $300 million in joint financing to China National Chemicals Import & Export Corp. (Sinochem) for construction of a $470 million, 100,000 b/d refinery at Dalian in Northeast China's Liaoning province (OGJ, June 17, 1991, Newsletter). The project is a joint venture between Sinochem and Total.

PETROCHEMICALS

SAUDI PETROCHEMICAL CO. let contract to Badger Co. Inc. to provide engineering and procurement services for an incinerator and ground flare to be installed at its Al-Jubail petrochemical plant. The 30,000 kw incinerator will dispose of chlorinated hydrocarbons in waste gases and liquids from an ethylene dichloride plant. The ground flare will burn releases from an ethylene plant. The $30 million project is to start up in mid-1993.

PHILLIPS PETROLEUM CO. improved its continuous etherification process to convert more than 91% of isoamylene to tertiary amyl methyl ether. Conventional processes achieve about 70% conversion. The new technology also can convert more than 99% of isobutylene to methyl tertiary butyl ether, compared with 96% for current technology. The process uses existing refinery units. Its raffinate can be used as alkylation unit feed.

DRILLING-PRODUCTION

ORYX ENERGY CO.'S 8 Coca horizontal well in Ecuador flowed 5,400 b/d of oil through a 1 in. choke from a 1,500 ft lateral in Cretaceous Hollin sands. About 35% of the unitized Coca-Payamino field is in Oryx's 100% owned Block 7. It is north of Oryx's 1 Gacela oil discovery, its first horizontal well in Ecuador (OGJ, Oct. 28, 1991, p. 40). Oryx identified Hollins sands in five more structures on which it plans horizontal drilling.

AMOCO TRINIDAD OIL CO. will spend as much as $300 million during the next 10 years to develop West East Queen's Beach and North Southeast Galeota gas fields off eastern Trinidad to meet a new gas supply contract with National Gas Co. (NGC) of Trinidad and Tobago. The agreement calls for Amoco to increase contract deliveries to NGC to 350 MMcfd by 1996 from the current 200 MMcfd. Amoco plans to drill as many as 14 wells in the area.

BAKER HUGHES INC., Houston, agreed to buy Teleco Oilfield Services Inc. from Sonat Inc. Birmingham, Ala., for $200 million, 4 million shares of, convertible preferred stock, and a 5% royalty payment for 5 years on certain technology revenues (OGJ, Nov. 11, 1991, p. 28). Baker Hughes said the stock has an indicated market value of $140-160 million. The royalty is on revenue from the triple combo measurement while drilling system developed by Teleco.

ASTRA CIA. ARGENTINA DE PETROLEO SA bought the capital stock of Phillips Petroleum Argentina Development Co. for $32.7 million effective Dec. 31, 1991. Assets include an interest in Contract 7559, a risk service contract covering several oil producing reservoirs in Argentina with gross production of about 21,000 b/d of oil. Net production is about 3,700 b/d. The sale is part of Phillips' campaign to sell $500 million of assets by yearend 1993.

CABRE EXPLORATION LTD., Calgary, plans to buy most of the Canadian oil and gas assets of Coho Resources Ltd., also of Calgary, for $25.5 million (Canadian). Coho plans to focus on its U.S. operations, mainly in Mississippi and Texas. The purchase will increase Cabre's production by about 1,300 b/d of oil and 7 MMcfd of gas. Cabre will also gain about 50,000 net acres of undeveloped land, 2.5 million bbl of proved oil reserves, and 26.5 bcf of proved gas reserves.

BANK OF CHINA will lend $730 million to oil authorities responsible for Northwest China's Tarim basin in Xinjiang Uygur Autonomous Region, which will be used to speed oil development in the area. China's State Council approved selling the oil on world markets to repay the loan.

NAHAMA & WEAGANT ENERGY CO., Bakersfield, Calif., an undisclosed West Coast utility, and a partnership between the utility and John Hancock Mutual Life Insurance Co. agreed to acquire ARCO Oil & Gas Co.'s interest in Mist gas field in Northwest Oregon for $5.1 million. Net proved developed producing gas reserves are about 10.5 bcf. Included is ARCO's 5% royalty interest and 25% back in interest in a farmout deal to drill 25 wells in the area by yearend 1993.

DAN A. HUGHES CO., Beeville, Tex., logged about 150 ft of net pay in three sands in its 1 Rufino & Josefa Lopez in Jim Hogg County, South Texas. The well is a step-out on the south flank of Berry R. Cox field that originally was scheduled to reach total depth at 16,000 ft. Plans are to stop drilling and complete in Tertiary seventh Hinnant sand at about 14,000 ft. Exploration Co. of Louisiana Inc., Lafayette, La., holds a 50% working interest in the well.

SOUTHERN INTERNATIONAL CORP., Houston, agreed to form a joint venture with Koperasi Usaha Bersatu Malaysia, Kuala Lumpur. KUB Offshore will build and operate drilling tender barges off Malaysia and plans to have the first drilling tender ready for operation by August 1993. Drilling rig packages will be built in Houston. Tender barge construction and final assembly will take place in Malaysia. where by midyear 1992 a worker training center will be built.

INTERNATIONAL COLIN ENERGY CORP., Calgary, bought Shell Canada Ltd.'s interests in the Kidney-Senex-Panny area of northern Alberta for about $2.2 million (Canadian). The purchase, effective Aug. 1 , 1991, includes production of 250 b/d of 38 gravity oil and 28,000 acres of development land. Estimated proved reserves are 400,000 bbl. The first of several development wells planned on the acreage was to spud last week. Colin plans to buy an added $25 million of producing leases by summer 1992.

TANKERS

CHEVRON U.K. LTD let a 10 year, 85 million ($157 million) contract to Den norske stats oljeselskap AS to operate shuttle tankers servicing its Alba oil field development on Block 16/26 in the U.K. North Sea, due on stream early in 1994. Statoil will time charter a double hull, 74,000 dwt tanker from Norway's Rasmussen Management AS to be built by Mitsui Engineering & Shipbuilding Co. Ltd. and completed in November 1993.

LPG

SAUDI ARABIAN MARKETING & REFINING CO. (Samarec) signed four more 5 year liquefied petroleum gas supply contracts based on its new price formula (OGJ, Dec. 16, 1991, p. 36). Texaco Ltd. signed for a total of 2.9 million metric tons, Shell International Trading Co. for 2.312 million metric tons, Enron Gas Liquids Inc. for 1.7 million metric tons, and BP Oil for 1.2 million metric tons. Deliveries will begin this month. Signing of more contracts also is expected this month.

HONG KONG and China completed an $8 million, jointly funded liquefied petroleum gas terminal on Hainan Island early last month. The project, 3 km from Basuo, the largest harbor on Hainan, includes two 1,000 cu m LPG tanks and a 12,000 m LPG pipeline. Construction began in July last year. The project will provide about imported LPG to about 100,000 Hainan residents.

LNG

KOREA GAS CO. signed a memorandum of understanding with Indonesia's Pertamina to buy 500,000 tons of liquefied natural gas in 1992 and 800,000 tons in 1993. Under an agreement signed in 1991, Korea Gas will buy 4 million tons of LNG starting in 1994.

MITSUBISHI OIL CO., Chevron Corp., British Petroleum Co. plc, and Broken Hill Proprietary Co. agreed to jointly operate a 700 billion yen LNG project in Papua New Guinea, Japan's Nihon Keizai Shimbun reported. The newspaper said there are enough gas reserves in Papua New Guinea to yield about 425 tcf of LNG. Exports are to begin about 2003 to Japan and other Asian countries.

TRANSPORTATION

A NATURAL GAS PIPELINE owned by Nova Corp. ruptured Jan. 8 about 10 miles south of Caroline, Alta. Leaking gas caught fire in three places at the site, but valves upstream and downstream were closed to stop the gas flow. The incident caused a short interruption in gas exports at Nova's Alberta-British Columbia border point and its Empress and McNeill border points on the Alberta-Saskatchewan border. Cause of the rupture was not immediately known.

PERINI INTERNATIONAL CORP., Framingham, Mass., let contract to Willbros Butler Engineers Inc., Tulsa, for engineering and design of crude oil storage units, including three 750,000 bbl tanks, for the Samir refinery near Mohammedia, Morocco. Perini is providing turnkey engineering, procurement, and construction services for the project. Wilibros' engineering work will continue through mid-1992. Construction is to be complete by March 1993.

UNION PACIFIC RESOURCES CO., Fort Worth, and Rhone-Poulenc, Green River, Wyo., formed Overland Trail Transmission Co., an intrastate pipeline partnership to serve Southwest Wyoming. Overland Trail will gather and transport gas through about 215 miles of 6-12 in. pipeline in Sweetwater and Lincoln counties. Capacity will be 60 MMcfd, of which 20 MMcfd is dedicated to Rhone-Poulenc's soda ash plant at Green River.

BC GAS INC. units Huntingdon International Pipeline Corp. and Sumas International Pipeline Inc. filed applications with the U.S. Federal Energy Regulatory Commission and Canada's National Energy Board to permits to lay a cross border pipeline between Huntingdon, B.C., and Sumas, Wash. Capacity of the line, to be complete in fall 1992, will be 128 bcf/year.

TEJAS GAS CORP. signed an agreement calling for units of Acadian Gas Corp., a Tejas subsidiary, to sell and transport about 720 bcf of gas to Evangeline Gas Pipeline Co. LP for 20 1/2 years beginning June 1, 1992. Evangeline will receive 50 MMcfd in 1992, 85 MMcfd in 1993-94, and 100 MMcfd thereafter at market based prices plus predetermined margins. The gas will meet Evangeline supply commitments to Louisiana Power & Light Co.

COMPANIES

DU PONT in 1993 will adopt a new accounting standard requiring companies to account on an accrual basis the cost of health and life insurance benefits for current and future pensioners and survivors. Du Pont estimates the change will result in a $3-4 billion after tax charge, which it plans to take in first quarter 1993.

CO-ENERCO RESOURCES LTD., Calgary, plans to increase spending in 1992 by 26% to $39.5 million (Canadian). Capital spending will increase in all categories, and drilling and recompletions will make up more than 50% of spending. The company plans to drill 35 wells, about one third of them wildcats.

SPILLS

AN OIL PIPELINE owned by Chevron Corp. ruptured off Alaska Jan. 4 spilling about 400 bbl of crude into Cook Inlet about 70 miles southwest of Anchorage. No oil washed to shore as of that evening, and officials said damage to wildlife should be minimal because few animals winter in the region. Cleanup was expected to take several days. Cause of the rupture was under investigation.

A BROKEN PIPELINE spilled about 285 bbl of oil along a 7 mile stretch of beach at Grand Isle, La. Conoco Oil Co. assumed responsibility for the spill, which was first spotted Jan. 6. and originated about 20 miles east. As of Jan. 7, crews continued working to prevent the spill from harming coastal habitat, and cannons were fired along the beach to scare away shore birds.