INDUSTRY BRIEFS

SPILLS

LOS ANGELES COUNTY'S district attorney filed charges against Chevron Corp., Chevron U.S.A. Inc., Chevron Shipping Co., and a Chevron Shipping employee alleging violations of state environmental laws stemming from a March 1991 spill of about 500 bbl of light oil into Santa Monica Bay from a pipeline to Chevron's El Segundo refinery (OGJ, Apr. 1, 1991, Newsletter). The line was ruptured by the anchor of an OMI Dynachem tanker trying to moor at Chevron's offshore berth. If convicted, the defendants could face fines and penalties totaling $4.7 million.

ALASKAN NATIVE LEADERS filed claims in Anchorage federal court alleging Exxon Corp. and Alyeska Pipeline Service Co. falsified reports and covered up their inability to respond to a major spill prior to the 1989 Exxon Valdez tanker spill. The natives also allege Alyeska violated a 1969 agreement in which they assigned land for the Valdez terminal for $1 in return for Alyeska's promise to use the latest pollution control equipment and spill response techniques. Exxon and Alyeska are reviewing the claims, apparently an expansion of claims in earlier spill damage lawsuits.

COALBED METHANE

MOUNT ISA MINES HOLDINGS LTD. (MIM) let contract to Commonwealth Scientific and Industrial Research Organization (Csiro) to study the feasibility of developing coalbed methane reserves in Queensland, Australia. MIM will provide $7.5 million during the next 3 years to fund Csiro research on producing methane in the Bowen basin. Csiro said the northern part of the basin has a resource of about 134 tcf.

GAS PROCESSING

STONE & WEBSTER ABU DHABI (UAE) INC. completed basic engineering for expansion of Abu Dhabi Gas Industries Ltd.'s Bab gas processing plant in Abu Dhabi. The work included basic design of new process and associated units to compress and condition gas for export and a pipeline to move gas from the Bab plant to Habshan.

DRILLING-PRODUCTION

INTERNATIONAL DRILLING & DOWNHOLE TECHNOLOGY CENTER (Iddtc), Aberdeen, won approval for a 2900,000 ($1.548 million) horizontal well to be spudded in April and completed within about 40 days. The well will be drilled at the Aberdeen center. Iddtc claims this will be the only open access horizontal well in the world providing test facilities for the development of new technology.

MARATHON PETROLEUM INDONESIA LTD. KRA-3X delineation well in the Natuna Sea off Indonesia flowed at a combined rate of 15,600 b/d of 44 gravity oil through a 1-1/2 in. choke with 530 psi flowing tubing pressure on two drillstem tests of Tertiary sands at 7,086-7,580. The well is on the 496,800 acre Kakap block, 1.3 miles southeast of Marathon's KRA-1X discovery (OGJ, Oct. 28, 1991, p. 40) and 1.3 miles northwest of the KRA-2X delineation well (OGJ, Feb. 17, p. 43). Feasibility studies have begun for development of the KRA structure, about 12 miles southeast of Kakap production facilities.

MAYAN LP, Midland, Tex., A-5 D-A64-K reentry in Northeast British Columbia's Beaver River field had calculated absolute open flow of 106.5 MMcfd of gas from Devonian Nahanni. Deliverability is 51.8 MMcfd. United Gunn Resources Ltd., Vancouver, and Beaver River Resources Ltd., Dallas, are venture partners in a project that includes reentry of three of the seven wells in the field, formerly operated by Amoco Canada Petroleum Co. Ltd. The wells have been shut in for 10-12 years. United Gunn pegs reserves at 1.2 tcf.

PLANTATION PETROLEUM CORP., Shreveport, La., 1 Allen stratigraphic test in Clay County, Miss., is targeting coalbed methane at about 3,900 ft, marking the first test of coalbed methane in Northwest Mississippi (OGJ, Dec. 9, 1991, p. 70). As of Mar. 30, the operator was drilling below 1,780 ft and planning to reach projected depth within 1 day. State geologists estimate there is more than 700 bcf of gas and 3.5 billion tons of coal in the area.

SNYDER OIL CORP., Fort Worth, took a farmout on 71 drillsites in Colorado's Wattenberg field from an undisclosed major oil company. Snyder plans to drill most of the wells this year. The deal extends Snyder's ownership on some acreage to Cretaceous Sussex and J sands. Last year Snyder started a multiyear 500 well drilling program in Wattenberg targeting Cretaceous Codell and Niobrara (OGJ, Mar. 16, p. 32).

INDONESIA and PT Caltex Pacific Indonesia agreed on a new formula to extend their production sharing contract on the Kangaroo block in Central Sumatra. The formula extends the contract 20 years and gives Indonesia's Pertamina 90% and Caltex 10% of the oil produced in the contract area. The current contract, to expire in 2001, gives Pertamina 88% and Caltex 12%. Caltex Indonesia produces 700,000 b/d of oil, about 40% of Indonesia's total.

DEN NORKSE STATS OLJESELSKAP AS increased its reserves estimate for Veslefrikk oil field on Block 30/3 in the Norwegian North Sea to 275 million bbl from 229 million bbl. The field produces about 70,000 b/d. Total Marine Norsk AS, Norsk Hydro, Svenska Petroleum Exploration AS, and Deminex (Norge) AS are Statoil's partners.

MOBIL NORTH SEA LTD. won approval from U.K. Department of Energy for its proposed $350 million development of Lancelot and Guinevere gas fields in the U.K. North Sea. The fields, on Blocks 48/17a, 48/17b, and 48/18a, have reserves estimated at 290 bcf. Production is to start at 120 MMcfd in July 1993 via two unmanned platforms and move through a 20 in., 40 mile pipeline from Lancelot to processing facilities at Bacton, U.K. Interests in Lancelot are Mobil 99%, Total Oil Marine unit Industrial Scotland Energy Ltd. (ISE) 0.72% and Brabant Oilex Ltd. 0.28% and in Guinevere Mobil 75%, ISE 18%, and Brabant 7%.

REFINING

KAZAKHSTAN was scheduled late last month to award a contract to build a refinery at the port city of Aktau, reported BizEkon News, Moscow. Iranian and Turkish firms have expressed interest in the project, and a joint stock company has been set up at Eralievo in the Mangistauz region to refurbish the port. BizEkon said the regional administration of the former Soviet republic hired an undisclosed Dutch company to help rebuild the port in exchange for Kazakhstan oil.

OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION charged BP Oil Co.'s Toledo, Ohio, refinery with 43 safety violations and ordered BP to pay $514,000 in fines. The charges cite failure to adequately inspect high pressure lines.

GREAT LAKES CHEMICAL CORP., West Lafayette, Ind., completed the purchase of Shell U.K. Ltd.'s interest in Octel Associates and Associated Octel Co. Ltd. for about $138 million (OGJ, Nov. 4, 1991, p. 47). Great Lakes now holds an 87.8% interest in Octel, with Chevron Corp., British Petroleum plc, and Texaco Inc. holding the remainder.

COMPANIES

LOUISIANA LAND & EXPLORATION CO., New Orleans, set its 1992 capital and exploration budget at $162 million, compared with $201 million spent in 1991. The company said decreases in gas related U.S. exploration and development spending account for most of the budget cut.

TAIWAN'S CHINESE PETROLEUM CORP. is seeking to establish a special fund of about $200 million to be used for foreign investment. CPC sent the proposal to Taiwan's Commission of National Corporations for approval. CPC said the fund will give it greater flexibility in its current program of foreign exploration and other ventures.

UNICORP ENERGY CORP., Toronto, is seeking a buyer or joint venture partner for its 60% interest in Union Gas Inc., Chatham, Ont. Union is the major gas distributor in Southwest Ontario. Market analysts say the selling price of the utility likely will be more than $300 million (Canadian). British Gas plc, which owns Consumers Gas Co. Ltd., Toronto, and 54% of Bow Valley Industries Ltd., Calgary, is seen as a likely buyer.

PETROCHEMICALS

CONSTRUCTION is under way at a petrochemical complex in the Weihe Economic Development Zone, Shaanxi province, China (OGJ, Jan. 27, p. 44). The plant will use feedstock from gasified coal to produce 300,000 metric tons/year of ammonia and 500,000 tons/year of urea. Start-up is scheduled for September 1995.

EXPLORATION

ASAMERA OIL (INDONESIA) LTD 1 Kuala Langsa wildcat on the Block A production sharing contract in Sumatra found a significant gas zone as indicated on well logs. Asamera plans to test the well, the second of a six well program on the block. Asamera completed testing 1 Bata in February and spudded 1 Kuala Muku Mar. 11. Asamera, a unit of Gulf Canada Resources Ltd., holds 50% interest in the block with Japan's Aceh Gas & Oil Co. Inc. 50%.

OCCIDENTAL TUNISIA INC. acquired a 50% working interest in the 544,000 acre Gabes Meridional permit, 25 miles off Tunisia in the Gulf of Gabes, via farmout from BHP Petroleum (Tunisia) Inc. Oxy and BHP, which will explore the permit on an equal basis, plan to drill one wildcat in mid-1993. Evaluation of other prospects will continue (OGJ, Aug. 6, 1991, p. 80).

MARKETING

HYDRO OLJE AS, a unit of Norsk Hydro AS, agreed to buy Mobil Oil Corp.'s Norwegian downstream company, Mobil Oil AS Norge, for 200 million kroner ($30.86 million) effective Apr. 1. The deal includes 215 service stations, 14 diesel outlets, and marketing of heating oil, kerosine, and diesel fuel. Mobil will retain its lubricants business in Norway, and Mobil lubes will be available through Hydro's Scandinavian outlets. The purchase increases Hydro's Scandinavian market share to about 10%.

TRANSPORTATION

MOBIL CORP. ordered 10 double hull barges at a total cost of about $10 million to transport crude and products on the Mississippi River and intracoastal waterways. The barges will be operational by yearend. Mobil has 25 barges on the Mississippi, and the new units will replace 10 single hull barges. In anticipation of emerging state rules, Mobil will install vapor recovery piping, inert gas systems, cargo gauging, and high level monitor/alarm systems.

OILTANKING HOUSTON began operations at its Malta tanker terminal, the seventh link in Oiltanking's international deepwater terminal system. The first of three phases is complete, providing storage of about 1 million bbl of light petroleum products. The second phase, to go on stream later this year, will accommodate 850,000 bbl of heavy ends and another 315,000 bbl of light products. The terminal can handle tankers of as much as 120,000 dwt.

TOKYO GAS CO and Mitsui & Co. agreed to form a joint venture gas company in Kuala Lumpur in April capitalized at 10-15 billion yen, provided 20% by Malaysia's Petronas, 55% by Malaysia Mining Corp. Bhd., and 25% by Tokyo Gas and Mitsui. Tokyo Gas will manage pipelines to supply gas to 17 cities in Malaya state, Mitsui will handle financing and equipment procurement, and Petronas and Malaysia Mining will supply gas from fields off Kuantan. Deliveries, to begin in 1994, are to reach about 50 bcf/year by 2011.

INTERNAL REVENUE SERVICE filed a claim against Columbia Gas Transmission Corp. in federal bankruptcy court in Wilmington, Del., for $553.7 million in back taxes. According to press reports, IRS documents show about $433 million of the claim covers corporate taxes and interest from 1984, 1986, and 1987. The IRS is one of thousands of creditors filing claims that total nearly $10 billion in the bankruptcy cases of Columbia Gas Transmission and parent Columbia Gas System Inc., Wilmington, Del. (OGJ, Aug. 12, 1991, p. 41).

U.S. BANKRUPTCY COURT for the District of Delaware extended until Apr. 13 the period in which Columbia Gas System and Columbia Gas Transmission have to file Chapter 11 reorganization plans (OGJ, Aug. 12, 1991, p. 41). The period was to expire Mar. 30. On Apr. 13 the court will consider a joint motion by Columbia Transmission and its unsecured creditors committee to extend the period to Apr. 30.

PETROLEOS DEL ECUADOR completed a $70 million expansion of its 503 km trans-Ecuadorian crude oil pipeline, increasing capacity to 325,000 b/d from 300,000 b/d (OGJ, Mar. 25, 1991, p. 25). The pipeline transports crude from the Amazon region to Balao on the Pacific coast. Ecuador's current production capacity is about 320,000 b/d.

GOVERNMENT

RUSSIA'S SUPREME SOVIET passed an underground mineral resources law that earlier was reported as taking effect Mar. 1, 1992 (OGJ, Mar. 16, p. 21). The new law has not been formally published, and two similar but competing drafts have been circulating. One is proposed by Russia's Committee on Ecology and Rational Use of Natural Resources, the other by the Committee on Industry and Energy. It is not clear how the law conforms with existing laws and other measures under consideration.