INDUSTRY BRIEFS

OMAN OIL CO. (OOC) is discussing with India's Petroleum Ministry two proposed 120,000 b/d joint venture refineries, one in Maharashtra state and one in Madhya Pradesh state, with Hindustran Petroleum Corp. and Bharat Petroleum Corp. The refineries likely will be fed with Omani crude. DOC reportedly is talking to Royal Dutch/Shell and Caltex about taking half of its 26% equity interest in the two proposed refineries.

Oct. 11, 1993

11 min read

REFINING

TOTAL PETROLEUM INC. started up an $80 million hydrotreater at its 45,600 b/cd Alma, Mich., refinery, The two part project included installation of the 15,750 b/d distillate hydrotreater and modifications to an existing hydrotreater. The unit will reduce diesel fuel sulfur content by 90%, a level required by amendments to the Clean Air Act of 1990.

LYONDELL-CITGO REFINING CO. LTD. chose M.W. Kellogg Co. as program manager of an $800 million heavy crude upgrade and expansion of its 265,000 b/d Houston refinery. The upgrade, scheduled for completion within 4 years, will increase heavy crude feedstock processing capacity to 200,000 b/d from 130,000 b/d.

DRILLING-PRODUCTION

SANTOS LTD. acquired all assets of Ampolex Ltd., Sydney, in the Cooper basin of South Australia and Queensland for $26 million (Australian) ($17 million U.S.), making it the region's top player. Assets include interests of 42% in Tintaburra oil field, 37.5% in East Patchawarra Block field, 15% in Nockatunga oil field, 7.5% in Jackson oil field, and 4% in South Bodalla oil field. Santos also acquired Ampolex's 3.75% interest in the Jackson-Moonie pipeline and 12.35% interest in Blina oil field in Western Australia's Canning basin. With the sale, Ampolex is withdrawing from onshore Australia and is focusing on offshore and foreign operations.

AMPOLEX acquired a 25% interest in Harriet oil and gas field complex north of Barrow Island in Western Australia from Phillips Petroleum Co. for a reported $60 million (Australian) ($39 million U.S.). Neither company confirmed the purchase price. Harriet, which started up in 1986, is producing about 10,500 b/d of oil and 27 MMcfd of gas. Ampolex is soon to begin a 120 day production test of its 100% owned Wandoo oil discovery north of the Harriet complex.

U.S. EXPLORATION INC., Independence, Kan., and Nevada companies Aztec-Talas Inc. and West Asia Co. Inc. formed a joint venture to become an operator and produce, explore, and refine oil in Kyrgyzstan republic of the former Soviet Union. Terms of an Aug. 26, 1992, agreement between Kyrgyzneft and Aztec-Talas give the JV partners access to more than 128 million acres of oil and gas acreage. The area includes Fergana Valley where 500 million bbl of oil have been produced to date. U.S. Exploration will provide as much as $20 million for exploration and development.

DUAL DRILLING CO., Dallas, will put three of its platform rigs to work during fourth quarter in the Gulf of Mexico. Dual Rigs 23, 24, and 47 will be engaged for at least 6-12 months' operation. All 10 of Dual's platform rigs are under contract.

AMOCO CANADA PETROLEUM CO. LTD., Calgary, closed its sale of 8% of the company's current production to Canadian Natural Resources Ltd. and an undisclosed buyer. Amoco's sale of its Horizon Property Group interests in British Columbia, Alberta, and Saskatchewan covers working interest volumes of 10,500 b/d of gas liquids and 63 MMcfd of gas.

SONAT INC. unit Sonat Exploration Co. completed its $133.6 million acquisition of 34 producing gas wells on 21 Gulf of Mexico blocks from Mobil Exploration & Producing U.S. Inc. Leases currently produce 80 MMcfd of gas and 300 b/d of oil and gas liquids net to Sonat. Sonat plans to drill 10 wells on the leases before yearend 1994. In three other acquisitions, Sonat paid $6.4 million for oil and gas leases with combined 15 MMcfd of gas equivalent production in East and South Texas and the Anadarko basin of Oklahoma.

MALLON RESOURCES CORP. unit Mallon Oil Co., Denver, completed its $21.4 million purchase of Delaware basin leases in New Mexico from Pennzoil Exploration & Production Co. The Lea and Eddy counties leases increase Mallon's proved oil reserves 425% to 1.439 million bbl from 337,000 bbl and proved gas reserves 350% to 38 bcf from 10.9 bcf. The package includes interests in 147 wells, 34.67 net to Mallon interests, and small interests in four large waterflood units.

ARAKIS ENERGY CORP., Vancouver, B.C., paid a $1 million signature bonus to the government of Sudan under terms of a production sharing agreement covering a 12.2 million acre block with an option to develop an additional 30 million acres in Central Sudan. The block encompasses three currently developed oil fields with 280 million bbl of proved reserves. Estimates indicate as much as 3.5 billion bbl of recoverable oil may lie under the block (see map, OGJ, May 3, p. 48).

WISER OIL CO., Dallas, paid $58.8 million to Mobil Exploration & Producing U.S. Inc. for oil and gas leases in 16 fields in the Permian basin of West Texas and New Mexico. Production on the leases averaged 2,250 b/d of oil and 10.5 MMcfd of gas last May. The acquisitionincreases Wiser's oil and gas production 60% and 70%,respectively. Wiser will start development programs on the leases in the fourth quarter.

NOBLE DRILLING CORP., Houston, will spend $150 million to buy nine jack up drilling rigs from Western Co. of North America. It will spend another $41 million to pay in full the rest of what a subsidiary owes Transworld Drilling Co. for 12 offshore rigs acquired in January 1991.

COMPANIES

ANDERSON EXPLORATION LTD., Calgary, plans to pay cash for Amax Petroleum of Canada Inc., a unit of Amax Inc., New York. Amax owns leases in western Canada, mainly in Alberta. Anderson production on the Amax acreage in 1994 will be about 2,800 b/d of oil and natural gas liquids and 15.9 MMcfd of natural gas.

AMERADA HESS LTD. cut its work force by more than 10% Oct. 5 to reduce costs. The job losses were all onshore and affected all departments. The company now employs 140 persons off the U.K. and 430 onshore in Aberdeen and London.

PENNZOIL CO. will sell its West Virginia gas operations to focus on oil production. Assets in 22 counties in the state's western part include a utility that serves 5,000 customers, gas wells, reserves, leaseholds, and most of its gas gathering system.

CABOT OIL & GAS CORP., Houston, closed its purchase of oil and gas leases and related assets in West Virginia and Pennsylvania where production is 13 MMcfd and reserves are pegged at 80 bcf. Cabot plans to drill 100 development wells on the leases during the next 4 years. It increased the 1993 capital program by $6.4 million stemming from the acquisition and expects to drill 35 more development wells this year.

FM PROPERTIES INC. affiliate FM Properties Operating Co. completed its $305 million oil and gas lease sale to Noble Affiliates Inc. unit Samedan Oil Corp. (OGJ, Sept. 13, p. 40). Proceeds will be used to reduce debt.

ANGOLA'S Sonangol national oil company will use Oceaneering International Inc. division Oceaneering Production Systems' Ocean Producer floating production, storage, and offloading system in Block 4 about 17 miles off northern Angola. The FPSO will receive, process, store, and offload crude produced from two seabed wells. Contract length is 1 year, which is expected to start early in January 1994. with options for two 1 year extensions.

DORSET EXPLORATION LTD., Calgary, acquired Solex Jayar Ltd. and all units of Gas Processing Ltd. Partnership 1989 for $11 million (Canadian). Assets are in Alberta and include 2,365 acres, 20 wells, a gas processing plant, field facilities, and pipelines. Current production is 240 b/d of oil and 2.4 MMcfd of gas.

GAS PROCESSING

MESA NC., Dallas, started up its $43 million, 250 MMcfd capacity Hugoton field gas processing plant in Satanta, Kan. Current output from Hugoton field averages 170 MMcfd. Mesa plans to sell an annual average of 16,000 b/d of natural gas liquids and as much as 235 MMcfd of residue gas from Satanta and its other gas processing plants. A unit at Satanta will extract 375 MMcf/year of helium.

USX-DELHI GROUP unit Tonkawa Gas Processing Co. acquired for an undisclosed price a cryogenic gas processing plant and associated contracts from Pettus Gas Plant LC, Houston. The 30 MMcfd capacity Pettus plant in Bee County, Tex., is near a Delhi gas gathering system.

GAS STORAGE A natural gas explosion Oct. 1 at a Pacific Gas & Electric Co. underground storage site near Stockton, Calif., caused damage estimated at $2 million. There were no injuries. The facility is on McDonald Island, northwest of Stockton. The explosion caused about $50,000 in additional damage to personal property in the area. Cause of the explosion is not known.

EXPLORATION

LEBANON'S Ministry of Industry & Petroleum completed its first offshore survey in more than 20 years. Geco-Prakla, Crawley, U.K., acquired 500 line km of data off northern Lebanon using the Bin-Hai 511 survey vessel. Geco-Prakla plans to present results at a series of meetings early in 1994. The ministry will announce exploration licensing arrangements at those seminars.

SEAGULL ENERGY cut 72 ft of net productive sands in two zones in its 1 OCS-G-9509 gas discovery in 186 ft of water on Vermilion Block 288 in the Gulf of Mexico, One zone flowed 9.1 MMcfd of gas and 192 b/d of condensate through an 18/64 in. choke with 4,907 psi flowing tubing pressure, the other zone 9.5 MMcfd and 100 b/d through a 22/64 in. choke with 3,130 psi flowing tubing pressure. The well is 125 miles south of Lafayette, La.

WAINOCO OIL & GAS CO. unit of Wainoco Oil Corp., Houston, 1 High Island Block 93 wildcat 30 miles off Texas in the Gulf of Mexico flowed 12.1 MMcfd of gas and 215 b/d of condensate through a 19/64 in. choke with 4,750 psi flowing tubing pressure. Production is from Miocene perforations at 9,253-88 ft. The well, in 45 ft of water, marks discovery of a new field on the Outer Continental Shelf off Texas. Wainoco holds a 25% working interest in the well and the rest of the block.

MAXUS ENERGY CORP. unit Maxus Colombia Inc. suspended work to evaluate its 1 Volcanera on the Llanos basin Recetor Block, 100 miles northeast of Bogota. Drillstem tests established a Mirador hydrocarbon column more than 350 ft thick. The well flowed 7.2 MMcfd of gas and 240 b/d of liquid hydrocarbons from 18,520-695 ft through a 1/2 in. choke with 1,450 psi flowing wellhead pressure. An interval at 18,752-797 ft flowed 2.2 MMcfd, 86 b/d of liquid hydrocarbons, and 1,410 b/d of water through a 1 1/2 in. choke with 1,028 psi flowing wellhead pressure.

PIPELINES

TUSCARORA GAS TRANSMISSION CO. plan to lay a 229 mile, 20 in. gas pipeline from Malin, Ore., across northeastern California to Reno, Nev., not a 141 mile line as reported earlier (OGJ, Sept. 20, p. 36).

TRANSTEXAS TRANSMISSION CORP a pipeline unit of TransTexas Gas Corp., began laying a 70 mile, 30 in. transmission extension of its 1, 000 mile Texas intrastate gas gathering and transmission system to transport gas from Lobo trend wells in Webb and Zapata counties to a point near Agua Dulce, Tex., in Nueces County. The $20 million project, which will increase capacity of the TransTexas system to more than 1 bcfd from 570 MMcfd, is to be complete by early 1994. TransTexas Gas is a unit of TransAmerican Natural Gas Corp., Houston.

A VENEZUELAN government commission began work to determine responsibility for a 20 in. gas pipeline explosion under a highway near Caracas (OGJ, Oct. 4, p. 39). At last tally, more than 50 persons died and at least 40 were injured when a tractor plow operated by contractor Abengoa for state telephone company Cantv cut through the pipe while laying fiber optic cable. The gas line is operated by Pdvsa unit Corpoven SA.

CANADA'S National Energy Board set an Oct. 22 deadline for filing gas export applications. The board will begin hearings on export bids in January.

LNG

CABOT LNG CORP. established new subsidiary Cabot LNG Trinidad LNG Corp. to facilitate completion of feasibility studies related to a $1 billion, 300 MMcfd liquefied natural gas export project in Trinidad and Tobago. Work stems from a memorandum of understanding signed earlier this year by Cabot, National Gas Co. of Trinidad and Tobago and units of Amoco Corp. and British Gas plc (OGJ, Feb. 15, p. 30).

COGENERATION

WESTCOAST ENERGY INC. unit Westcoast Power Inc. teamed with China National Petroleum Corp. unit Changqing Petroleum Exploration Bureau to build, own, and operate a $20 million, 15,000 kw gas fired cogeneration plant in China. The Sino-Canadian Cooperative Changhai Gas Electric Generation Co. joint venture plant will be built in Jingbian County, Shaanxi province, 400 miles west of Beijing. After scheduled start-up in fall 1995, the plant will supply electrical power, and process steam to the bureau's gas processing plant serving Jingbian gas field and Ansai oil field, both in the Shaan Gan Ning (Ordos) basin.