INDUSTRY BRIEFS

ACQUISITIONS

PARKER & PARSLEY PETROLEUM CO., Midland, Tex., completed its tender offer for 33 of 35 Prudential-Bache Energy Income limited partnerships and is continuing its tender for the remaining two. Total accepted partnership units represent a tender offer price of more than $293 million. Parker & Parsley expects to complete the merger, which will boost its reserves about 60% to 202 million bbl of oil equivalent, in about 45 days. It initially offered $557 million to acquire all units in all the partnerships, which are the focus of investor lawsuits (OGJ, May 17, p. 26).

TERMINALS

MOBIL OIL HONG KONG opened a refined products terminal on Hong Kong's Tsing Yi Island, increasing its lube blending capacity by 50% and products storage capacity by 60% to 1.6 million bbl. The terminal includes three deepwater piers, a fully automated lube oil blending/packaging plant, a highrise warehouse, and more than 90 tanks for fuels, lubricants, chemical solvents, and liquefied petroleum gas.

COMPANIES

BRITISH GAS PLC (BG) sold gas to 102 companies that applied for a combined 200 MMBTU/day for sale to the U.K. industrial and commercial market in competition with BG. That is in addition to 400 MMBTU/day sold for release starting in October (OGJ, Jan. 11, Newsletter). Seventy companies bought gas for the first time. BG said many buyers are likely to sell their shares to other suppliers.

FRANCE'S TOTAL and Electricite de France (EDF) are pooling their know-how to participate in power generation projects in the Far East and eastern and southern Europe. Total, which seeks equity interests rather than merely a role of fuel seller, will supply technology, information on preparing and financing world scale projects, and energy market data. EDF will provide power plant design, construction. and operation technology.

NATIONAL POWER PLC, London, agreed to buy the U.S. power generation unit of Transco Energy Co. for about 105 million ($160 million). A new company, National Power America Inc., will acquire Transco Energy Ventures Co., which holds interests in seven independent power plants operating or under construction, mainly in the U.S. Southeast.

LONG ISLAND LIGHTING CO. (LIL), Hicksville, N.Y., last month completed an $18.5 million conversion of its Northport, N.Y., power plant from oil fired to gas fired. Rated at 375,000 kw, the plant had been the largest operating oil fired plant in the U.S., LIL said. The project, completed $2.3 million under budget, brings to 42% the portion of LIL power fueled by gas. Gas is supplied by Iroquois Pipeline.

INVERNESS PETROLEUM LTD., Calgary, agreed to buy oil and gas assets from Saskoil Ltd., Regina, Sask., for $12.4 million (Canadian). Properties in the Cypress-Battle Creek area of Southwest Saskatchewan include 30 bcf of natural gas reserves, processing facilities, and 148,258 acres of exploration acreage.

CIMARRON GAS COS. INC., Tulsa, signed a letter of intent to acquire the natural gas marketing, gathering, and processing plant interests, mainly in West Texas, of Stellar Cos., Houston, for $16 million. Closing is expected within the next 2 months. Cimarron, a unit of Zapata Corp., may sell Stellar's gas marketing operation.

HALLWOOD ENERGY PARTNERS L.P. settled lawsuits with Louisiana Intrastate Gas Corp. (LIG) for $15.25 million. Hallwood unit Concise Oil & Gas Partnership was a plaintiff in two lawsuits involving prices LIG paid for gas production under a long term contract for Northeast Montegut field in Terrebonne Parish, La. Hallwood will retain about 70% of the settlement after paying royalties and costs.

GAS PROCESSING

CGGS CANADIAN GAS GATHERING SYSTEMS INC. acquired Gulf Canada Resources Ltd.'s 38% interest in the 124 MMcfd Nevis gas processing plant east of Red Deer, Alta., for $37.5 million (Canadian). The purchase boosts CGGS' interest in the plant to 1 00%. Morrison Petroleums Ltd. operates the plant for CGGS.

DRILLING-PRODUCTION

ABB LUMMUS OVERSEAS CORP. let a $102 million subcontract to its Brazilian affiliate ABB Setal Lummus Engenharia e Construcoes, Sao Paulo, to supply two drilling-production platforms for an oil field development project off the Angolan enclave of Cabinda. A group made up of Agip SpA, Ste. Nationale Elf Aquitaine, Chevron Corp., and Nigerian National Petroleum Corp. let the project's basic engineering contract, worth $302 million, to ABB Lummus earlier this year. ABB Setal is to provide construction and procurement services, transportation and installation of platforms, and underwater pipelines. The facilities are to start up in first quarter 1994 and produce at peak 100,000 b/d of oil.

VINTAGE PETROLEUM INC., Tulsa, closed its purchase of California oil and gas properties from Conoco Inc. for about $38 million cash. Involved are leases in San Miguelito, Rincon, and Ventura fields in Ventura County that hold proved reserves of 11.7 million bbl of oil and 5.8 bcf of gas and produce about 3,000 b/d of midgravity oil and 700 Mcfd of gas.

AMERADA HESS LTD. shut down production June 27 from Angus field in the U.K. North Sea and moved Petrojarl 1 floating production, storage, and offloading vessel to place Hudson field on stream on Block 210/24a. Petrojarl's oil production capacity will be boosted to 40,000 b/d from 30,000 b/d, allowing the first 17 million bbl of Hudson reserves to be produced at about 38,000 b/d. Plans call for subsea facilities to be installed in Hudson and tied back to Tern platform on Block 210/25a (OGJ, Dec. 14, 1992, p. 26) to produce Hudson's remaining 80 million bbl of reserves. Amerada also may use Petrojarl to develop its Block 39/1 Fife discovery.

SAMEDAN OIL CORP. signed a letter of intent to acquire Freeport McMoRan Inc.'s (FMI) 70% interest in East Cameron Blocks 320, 331, and 332 in 250 ft of water 100 miles off Louisiana in the Gulf of Mexico for $100 million. FMI found oil and gas/condensate on the blocks in 1992 and has drilled seven delineation wells. Samedan will become operator. Plans call for first production in late 1 994 or early 1 995. Closing is expected by Aug. 1. Samedan parent Noble Affiliates Inc. plans to finance the purchase with available cash.

A JOINT VENTURE of Belden & Blake Corp. (B&B), North Canton, Ohio, and Deven Resources Inc., Philadelphia, agreed to purchase a Pennsylvania coalbed methane development project from O'Brien Environmental Energy Inc. for $2 million cash and $4.5 million in nonrecourse 10 year notes, Involved are about 15,000 acres in Indiana County, Pa., containing about 4.5 bcf of proved, developed gas reserves and 45 bcf of probable reserves. Development costs are pegged at $12 million during the next 4 years, B&B will be operator and hold a 60% interest in the venture.

QATAR GENERAL PETROLEUM CORP. (QGPC) let a $4.54 million contract to Engineers India Ltd. (EIL) for design engineering of production platforms for QGPC's $200 million PS-2/3 offshore field development project. Most work will be conducted in Doha, where EIL is opening an office.

PETROCHEMICALS

MARUZEN PETROCHEMICAL CO. and Asahi Glass Co. will form a joint venture to build a 200,000 metric ton/year vinyl chloride monomer plant at a Maruzen site in lchihara, Chiba prefecture, Japan. Total investment is estimated at 13 billion yen ($117 million). Start-up is scheduled for April 1995, with ethylene feedstock supplied by a new plant Maruzen expects to complete this fall.

EXPLORATION

PETROLEOS BRASILEIRO SA spudded the first wildcat in the unexplored Parecis Plateau basin of Mato Grosso and Rondonia states of Southwest Brazil. Site is on the large Fazenda Itamarati cotton plantation, about 160 km northwest of Cuaiba. The activity stirred complaints about the lack of royalties for private landowners in Brazil by plantation owner and frequent Petrobras monopoly critic Olacir de Moraes. Petrobras has budgeted $8 million for Parecis Plateau basin exploration.

AGIP SPA unit Nigerian Agip Oil Co. signed a production sharing contract (PSC) with Nigerian National Petroleum Corp. covering exploration on two deepwater blocks off Nigeria. The acreage involves 4,700 sq km in 2001,200 m of water 60-1 00 km from shore in the Gulf of Guinea. Agip will be operator of a joint venture with Exxon Corp. and Amoco Corp.

FOUR COMPANIES committed $48.5 million (Australian) during 6 years to explore four permits in the Carnarvon basin off Western Australia. Phillips Australian Oil Co. and Ampolex Ltd. plan two wells and 3,550 line km of seismic surveys on the W92-6 permit at a cost of $16.6 million. Mobil Exploration & Producing Australia Pty. plans two wells and 4,000 line km of seismic and marine gravity surveys plus an airborne magnetics survey on the W92-7 permit for $18.1 million. Discovery Petroleum NL plans one well and 400 line km of seismic surveys on W92-9 permit for $6.8 million and one well and 500 line km of seismic on W92-10 permit for almost $7 million.

CNG PRODUCING CO. tested a gas/condensate discovery on South Marsh Island Block 154 in the Gulf of Mexico, about 170 miles southwest of New Orleans, that flowed more than 20 MMcfd and 1,100 b/d from the lower of two pay zones. The well cut more than 225 ft of net gas pay in two sands. A platform is available for immediate installation, and CNG expects the well to be on stream by Oct. 1. Added seismic work is being considered to assess offset potential. Operator CNG and Nerco Oil & Gas each own a 50% working interest in the well.

RAM PETROLEUMS LTD., London, Ont., signed an association contract with Empresa Colombiana de Petroleos covering about 336,000 acres in the Rio Putumayo region near Colombia's border with Ecuador. Ram's work obligation calls for shooting 60 line km of seismic survey and reprocessing 100 line km of seismic data the first year and drilling one wildcat a year during the contract term.

REFINING

EXXON CO. U.S.A. let contract to Ralph M. Parsons Co., Pasadena, Calif., for engineering, procurement, and construction of a $200 million project at is Benicia, Calif., refinery. The goal is to enable the refinery to meet new California and federal standards for reformulated gasolines. Involved are construction of new process facilities and modifications to existing units. The project is to be complete by yearend 1995.

SHELL INTERNATIONAL PETROLEUM CO. acquired Burmah Castrol plc's 15% interest in Pakistan Refinery Ltd. (PRL), doubling its interest in PRL, which operates a 30 year old, 47,000 b/d refinery at Karachi. Remaining interests are held by Pakistan government entities 58% and Caltex 12%. Shell is expected to press for a modernization of the 31 year old refinery. An expansion program is under study. Burmah also is shedding its 63.91% stake in upstream unit Pakistan Petroleum Ld.

PIPELINES

ARCO PIPE LINE CO. will expand its Texas City, Tex., to Cushing, Okla., pipeline light crude capacity by 40,000 b/d to 160,000 b/d to meet growing demand for light and heavy crude shipments from the U.S. Gulf Coast to the Midcontinent. The system, last expanded in 1991 to 120,000 b/d from 50,000 b/d, has been essentially filled for several months. The expansion is to be compete by yearend.

TRANSOK INC., Tulsa, signed a long term agreement with MidCon Texas Pipeline Co. to lease all pipeline facilities and assume related business of MidCon Texas unit Palo Duro Pipeline Go. Terms are not disclosed. Palo Duro consists of a 153 mile gas gathering system in Wheeler and Hemphill counties, Tex., and a 218 mile, 16 in., 90 MMcfd transmission line from Wheeler County to a point near Sweetwater, Nolan County, Tex. Palo Duro has a 30 MMcfd interconnect with Transok's Texas and Oklahoma Western Anadarko Gas Gathering System.

TRUNKLINE GAS CO. signed a firm gas transportation agreement with Peoples Gas Light & Coke Co. to deliver 60 MMcfd to Champaign County, Ill., under a 5 year term. The agreement is Trunkline's first long term transportation contract with Peoples.

EXPORTS-IMPORTS

KUWAIT will double crude oil supplies to Brazil to 60,000 b/d under a contract signed last month, making the emirate Brazil's second biggest supplier after Saudi Arabia. Saudi Arabia recently cut its oil shipments to Brazil to 150,000 b/d from 200,000 b/d, and Iran slashed its oil supplies to Brazil 40,000 b/d from 120,000 b/d. Argentina agreed earlier this year to sell Brazil 40,000 b/d of crude as part of a bilateral trade accord to trim Brazil's trade surplus with its neighbor.

OILSANDS

SUNCOR INC., Toronto, reported settlement of a damage claim in which it sued 20 companies after an October 1987 fire at its oilsands plant near Fort McMurray, Alta. The fire shut down the plant until January 1988, and full production was not resumed until March 1988. Suncor at the time estimated damage at $50-60 million. It filed suits against companies that included Canadian Wire & Cable, Northern Telecom, and Alcan Wire and Cable. Suncor alleged defendants failed to warn that PVC jacketed cable, grouped in configurations, constituted a fire hazard. The Alberta Court of Queen's Bench dismissed the suit under a settlement that included an agreement to keep the settlement amount confidential.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.