INDUSTRY BRIEFS

GOVERNMENT

SASKATCHEWAN'S government Jan. 1, 1994, will end a 10 year policy of granting royalty holidays for new oil and gas wells. A royalty of at least 5% will be charged on all new oil and gas production. Incentives will be offered for exploratory gas wells and most oil wells. Under the new system, royalties on a nonheavy oil well producing 30 b/d would fall to 16% from a current 26%. Royalty for a comparable well in Alberta is 8-9%.

COMPANIES

HALLIBURTON CO., Dallas, and China National Petroleum Corp.'s Shengli oil field authorities formed a sister relationship to develop several initiatives to expand their existing cooperation agreement. The new agreement includes meetings between senior management of the organizations to review and enlarge current business cooperation and approve proposals on future cooperation in the area, Shengli accounts for 570,000 b/d of China's 2.8 million b/d production.

BRITISH PETROLEUM PLC paid $10 million for Maxus Energy Corp.'s 53.33% interest in Colombia's Recetor concession. BP owned 10% of Recetor before its purchase of Maxus' interest, and it will assume operatorship of the 1,137 sq km block by yearend. Recetor adjoins the block containing Cusiana and Cupiagua oil fields. Maxus is currently drilling 1 Liria, the second well on the block, 3 km west of the 1 Cupiagua discovery well (OGJ, May 10, p. 30).

OIL PRICES

LIGHT SWEET CRUDE on the New York Mercantile Exchange (Nymex) for January delivery dropped to $15.31/bbl Nov. 29, then the lowest since a Nymex West Texas intermediate next month delivery close of $15.30/bbl June 21, 1990, not $15.10/bbl June 10, 1990, as incorrectly reported (OGJ, Dec. 6, p. 26).

LNG

JAPAN'S Institute of Energy Economics expects LNG supplies in Asia to become tight about 2010, Tokyo newspaper Nihon Keizai Shimbun reported. Asian LNG demand is predicted to rise to 63-67 million metric tons/year in 2000 and 75-95 million tons/year in 2010 from 44 million tons/year in 1992. New LNG projects are said to be required, along with existing pipeline projects, to meet demand by 2010.

JAPAN'S Export-Import Bank will finance 85% of the $580 million cost of a seventh train for the Bontang LNG plant in East Kalimantan, Indonesia. The other 15% of the cost is to be financed by loans from other Japanese banks. Work on the 2.3 million metric ton capacity unit is scheduled to start in April 1994 with completion by 1998. When the train is completed, the plant will be able to produce 15 million tons/year of LNG. It currently produces 11 million tons/year.

PETROCHEMICALS

NOVA CORP., Calgary, is selling its methanol assets, which consist of three plants at Medicine Hat, Alta., to Methanex Corp., Vancouver, B.C., in exchange for 23 million shares of Methanex stock worth $190 million (U.S.). Nova will buy 15,503,876 and 6,443,000 common shares of Methanex stock from major shareholders Fletcher Challenge Ltd., Toronto, and Metallgesellschaft Corp., respectively. It will pay Fletcher $167.7 million (Canadian). Price for the MG shares isn't disclosed. Nova becomes the largest Methanex shareholder, owning a 24% interest in the company.

NORTHERN POLYETHYLENE LTD., Rawalpindi, Pakistan, let a $23.17 million contract to John Brown Engineers & Constructors By, Zoetermeer, Netherlands, for work on Pakistan's first polyethylene plant. John Brown will provide engineering and procurement for the 30,000 metric ton/year plant, which is intended to supply 25% of current local demand for high and low density polyethylene.

PIPELINES

TRANSCONTINENTAL GAS PIPE LINE CORP., a unit of Transco Energy Co.. asked the Federal Energy Regulatory Commission to approve its second U.S. Southeast expansion project. In two phases, SE95/96 will add 165 MMcfd of capacity to the company's main line from a point near Butler, Ala., to points upstream of TGPL's Compressor Station 165 near Chatham, Va. (OGJ, Oct. 4, p. 40). Construction of SE95/96 could be under way by May 1995. The company filed with FERC for SE94 Nov. 9 to add 35 MMcfd to the main line. Construction could start by May 1994.

CNG TRANSMISSION CORP., Clarksburg, W.Va., completed pipeline and compressor station construction on its $240 million, 3 year, Lebanon, Ohio-Leidy, Pa., project. The work adds 380 MMcfd of capacity to U.S. East Coast and Upstate New York cogeneration markets.

EXPLORATION

EXXON EXPLORATION CO. acquired a 47.5% interest in exploration Block PPL 138/PDL 1 and a 21% interest in Block PPL 101 in Papua New Guinea from British Petroleum Co. plc. The blocks cover a combined 2 million acres in the southern highlands, 400 miles northwest of Port Moresby. Exxon and BP recently completed 3 Hides on PPL 138/PDL 1, which cut gas deeper than two previous gas wells in the field.

ESSO CHINA LTD. agreed with China National Offshore Oil Corp. to begin exploration in the East China Sea. Esso will explore a 2,120 sq km block in water depths of 80-1 00 m 240 km east of Wenzhou, Zhejiang province. Cnooc calls it the first deal between Exxon and a Chinese company.

CNOOC let contracts to explore for oil and gas off Wenzhou to Teikoku Oil Co. and Japan Petroleum Exploration Co., both of Tokyo, and Royal Dutch/Shell Group. The Tokyo companies will explore Blocks 41/17 and 42/03 covering a combined 6,500 sq km. Work is expected to start in spring 1994. Shell units Shell Exploration (China) and Pecten Orient, each with 50% interest, will conduct seismic surveys and drill on Block 26/19 covering 3,700 sq km in 70-90 m of water 250 km east of Wenzhou.

DRAGON OIL PLC, London, spudded the 1 Dragon wildcat on Block V off South Korea. The well will be drilled to 7,850 ft by the South Seas Driller semisubmersible rig. Dragon said the prospect could hold as much as 270 million bbl of recoverable oil. The block is 150 km south of the Korean peninsula and 150 km northeast of East China Sea oil fields. Operator Dragon is 40% equity owner, Pedco, the South Korean state oil company, holds 50%, and Basic Petroleum & Minerals Inc. and Palawan Oil & Gas Inc., both of Manila, 5% each.

AMERICAN INTERNATIONAL PETROLEUM CORP., New York, agreed to farm out its acreage in Colombia's Rio Planas Contract Association to Casa Inglesa Ltda., which will pay all the cost to drill the 1 Cactus and 1 Torosentado wildcats. In return, Casa Inglesa will earn a 50% working interest in the acreage. AIPC will continue as operator. Rio Planas consists of 490,000 acres in the Llanos basin, 180 miles east of Bogota.

ESSO NORGE AS let a $1 5 million contract to Petroleum Geo-Services AS unit Geoteam Exploration Ltd. AS, Oslo, to acquire 38,500 km of 3D seismic data on the PL 072 and PL 101 licenses near Sleipner gas field in the northern North Sea. Petroleum Geo-Services says it's the first time a seismic vessel will tow six seismic streamers. The American Explorer is to conduct the work during mid-March 1994 through summer 1994.

SENECA RESOURCES CORP., Houston, a unit of National Fuel Gas Co., Buffalo, made a completion in the lowest of three gas pays discovered by its 1 OCS-G 9511 wildcat on Vermilion Block 296 in the Gulf of Mexico. Pay at 10,786-816 ft flowed 11.432 MMcfd of gas and 120 b/d of oil with 4,001 psi flowing tubing pressure through a 22/64 in. choke. Combined tests flowed more than 25 MMcfd of gas and 264 b/d of oil. Operator Seneca owns a 66.67% interest in the discovery, British-Borneo Exploration Inc. unit of British-Borneo Petroleum Syndicate plc 11.33%, and Cometra Oil & Gas Inc. and Ranger Oil Co. 11% each.

COGENERATION

ORANGE COGENERATION LP let a $45 million contract to Zurn Industries Inc., Erie, Pa., to design and build a 103,000 kw gas fired combined cycle cogeneration plant at Bartow, Fla. Steam from the plant will be sold to Orange Co. Inc., and electricity sold to Florida Power Corp. and Tampa Electric Co. Construction will begin immediately with completion scheduled for mid-1995.

ALTERNATE FUELS

ECOTRANS VEHICLE INDUSTRIES INC., Los Angeles, unveiled what it calls the U.S.'s first vehicle certified to meet the Environmental Protection Agency's inherently low emission vehicle emission standard. The natural gas powered version of General Motors Corp.'s full size, 3/4 ton pickup truck is produced by Ecotrans and certified by the California Air Resources Board to its low emission vehicle standard. Vehicle production is slated for early February 1994 at the Ecotrans assembly plant in East Los Angeles.

MARKETING

BP OIL CO. plans to rescind its June 1992 notice of withdrawal from branded gasoline retail marketing in California. BP cites the inability to sell its assets for full value. The company will continue trying to sell stations to its own dealers and others.

EXXON completed its withdrawal from the southern California gasoline market. It stopped supplying fuel to its remaining dealers in the region this month as part of a settlement of a lawsuit brought by dealers. Exxon held a 3.4% market share there. It continues to operate several hundred service stations and a 128,000 b/cd capacity refinery in northern California.

GAS PROCESSING

WILLIAMS FIELD SERVICES GROUP, Tulsa, will build a 30 MMcfd capacity natural gas turboexpander plant near Canadian in the Texas Panhandle. It's scheduled to start operation Oct. 1, 1994. Elsewhere, the company expects its 80 MMcfd coal seam gas treating plant in New Mexico to start up in January 1994, and a 120 MMcfd processing plant in South Central Wyoming's Wamsutter field is scheduled to start up early in 1994.

GPM GAS CORP., Houston, a unit of Phillips Gas Co., acquired East Goldsmith gas processing System in the Permian basin of West Texas from affiliates of American Oil & Gas Corp., Houston. Assets include a 45 MMcfd lean oil absorption process unit, 16 MMcfd cryogenic process unit, two booster stations and related equipment, and more than 60 miles of gathering line. The deal adds more than 12.5 MMcfd of capacity to GPM's Ector County, Tex., gathering system and allows the company to lower operating pressures for producers in the area.

DRILLING-PRODUCTION

SNYDER OIL CORP., Fort Worth, agreed to develop part of Union Pacific Resources Corp.'s uncommitted, undeveloped acreage in Colorado's greater Wattenberg area. Terms of the proposal give Snyder drilling rights on an estimated 1,800 potential locations in 72 townships. it has as many as 6 years to develop the leases, and has committed to drill at least 300 wells in the first 3 years. As compensation, UPRC receives warrants to buy 2 million shares of Snyder common stock at $25-27/share.

BP EXPLORATION LTD. evacuated 77 nonessential workers from Forties Delta platform in the U.K. North Sea on Dec. 13. This followed shutdown of the platform after a suspected ignition in flare boom pipework. No injuries were reported.

SHELL OFFSHORE INC. began towing the deck and hull of its Auger tension leg platform (TLP) from Freeport, Tex., to Garden Banks Block 426 in the Gulf of Mexico, where it is to be installed this month in 2,860 ft of water, a drilling and production platform water depth record (OGJ, Dec. 6, p. 25). Auger production is expected to peak in 2001 at 46,000 b/d of oil and 125 MMcfd of gas. Its water depth record will fall in 1996 when Shell and BP Exploration Inc. install their Mars TLP in 2,933 ft of water on Mississippi Canyon Block 807 in the gulf (OGJ, Oct. 11, p. 28).

FOREST OIL CORP., Denver, agreed to pay $60 million to acquire a 35.65% working interest in Loma Vieja/Martinez gas field in Zapata and Jim Hogg counties of South Texas. The acreage currently produces a combined 61 MMcfd from 11 wells. Closing is expected by Dec. 30.

HOME OIL LTD., Calgary, completed acquisition of the remaining 12% interest in Scurry-Rainbow Oil Ltd., also of Calgary, for $42 million (Canadian), Home held an 87% interest in Scurry since 1975. It has been operated since then by Home employees under a management agreement. Scurry-Rainbow started up in 1954.

AMOCO (U.K.) LTD. received U.K. Department of Trade and Industry (DTI) approval to develop Baird field in North Sea Block 49/23. Amoco plans to bring Baird on stream as a single well tied back to Indefatigable field facilities (OGJ, Nov. 1, p. 28). DTI estimated Baird will produce 50 bcf of gas during a field life of 11 years.

CAIRN ENERGY PLC, Edinburgh, received DT] approval to develop Albury gas field southeast of Guildford, Surrey, U.K. Field reserves are estimated at 4.3 bcf. First production is scheduled for January 1994 to fuel a 2,000 kw electrical power generating plant.