INDUSTRY BRIEFS

ALTERNATE FUELS

CALIFORNIA PUBLIC UTILITIES COMMISSION issued guidelines for utilities to create refueling and service infrastructure needed to meet the state's order to require by 1998 that 2% of all new autos offered for sale in the state are zero emission vehicles, 5% by 2001, and 10% in 2003. CPUC also set guidelines for state gas and power utilities covering development of low emission vehicles (LEVs). State utilities have 60 days to file special applications to fund current LEV programs.

EXPLORATION

WESTERN GEOPHYSICAL unit of Western Atlas International Inc., Houston, took delivery of the 255 ft Western Patriot seismic survey ship from builder Ulstein Verft AS, Ulstein, Norway. The $30 million vessel, the fifth seismic ship added to Western's fleet since 1991, is working off Norway. Western Geophysical this fall is to receive a sixth seismic vessel capable of conducting 2D and 3D seismic surveys.

TRI-VALLEY CORP., Bakersfield, Calif., signed a letter of intent with Ural Mining Institute's Geophysical Systems Laboratory (GSL), Ekaterinbourg, Russia, to form a joint venture that will pursue exclusive use and sale worldwide of proprietary seismic interpretation software developed by GSL. The JV will be based in Bakersfield and operated by Tri-Valley.

TRACER PETROLEUM CORP., Vancouver, B.C., acquired exploration rights from Tunisia's government for the 697,000 acre Sud Nefta block in Central Tunisia. Tracer and its partners have 30 months to spend $4 million for exploration. They plan to obtain 200 km of seismic and drill a 4,500 m well to an Ordovician target. Tracer has identified a gas prospect near the trans-Mediterranean pipeline, which moves gas to Italy from North Africa. Operator Tracer owns 50% interest in the block.

HONDO OIL & GAS CO. unit Hondo Magdalena Oil & Gas Ltd. reached preliminary understanding on a farmout under which Amoco Colombia Petroleum Co. will acquire an interest in Hondo's Opon association contract in Colombia's Middle Magdalena Valley. Amoco will pay $3 million to acquire a 45% interest, with Hondo retaining a 35% interest. Amoco also will pay Hondo's costs related to fifth and sixth year exploration program obligations under the contract. The deal is subject to Colombian authority approval and other conditions.

BP EXPLORATION OPERATING CO. LTD. began a 3D seismic survey on 1,500 sq km of its Lombok license in Indonesia. Data will be processed by November with a view to spudding a well in mid-1994.

COMPANIES

UNION TEXAS PETROLEUM HOLDINGS INC., Houston, cut 1993 capital spending to $200 million from a planned $253 million. It attributed the drop mainly to reduced redevelopment costs for U.K. North Sea Piper field and lower exploration outlays in the sea.

PATRICK PETROLEUM CO., Jackson, Mich., shareholders approved a proposal July 28 to issue company common stock for a merger with American National Petroleum Go., Houston. More than 7 million shares are to be issued based on an exchange ratio of 1 .231 shares of Patrick stock for each share of ANPC stock. Patrick also is paying cash of $3.40/ANPC share for about $19.9 million. The merger was to be effective July 29.

GAZ DE FRANCE and Petroleos de Venezuela SA agreed to pool technical knowledge in gas research, underground gas storage, gas distribution, and liquefied gas technology, transportation, and marketing. Venezuela, with about 124 tcf of mostly undeveloped natural gas reserves, is about to implement a gas development policy for internal utilization and medium term exports of LNG, mainly to Europe.

FRANCE'S TOTAL and Taiwan's Chinese Petroleum Corp. (CPC) signed a heads of agreement covering possible joint ventures for exploration in Viet Nam, Algeria, Libya, and the Middle East, as well as prospects for sale of Total's Qatari and Indonesian natural gas to Taiwan. Total and CPC are in a group that bid last year to conduct a feasibility study for a proposed $1-1.5 billion, 130,000 b/d grassroots refinery in Viet Nam, which has yet to make a final decision.

GOVERNMENT

ALASKA filed a $29 billion lawsuit July 22 against the U.S. government seeking revenue it claimed it lost in Washington's lockup of federal land. The suit said Washington broke the law that granted Alaska statehood in 1959 by designating millions of acres of mineral and oil rich federal land as national parks and wildlife preserves where mining and drilling are banned.

LNG

PHILLIPS PETROLEUM CO. received a second ruling from the U.S. Tax Court, which favorably affects Phillips's income tax liability for 1975 through 1978. The decision also affects its tax liability for all subsequent years. The ruling stems from income received from sales of LNG to Japanese utilities from the Kenai, Alas., LNG plant in which Phillips holds a 70% interest. The court held that more than 50% of the income at issue was from a foreign source, just as Phillips said it was.

GAS PROCESSING

WILLIAMS COS. INC. unit Williams Field Services Group reports fabrication began on its $30 million, 120 MMcfd capacity gas processing plant that will serve Wamsutter field of South Central Wyoming. The project includes installation of gathering pipelines and compressor equipment. Start-up of the plant, near Riner, Wyo., is scheduled for Jan. 1. Darnell Engineering Corp., Houston, will build the plant. Site work started in mid-July.

WESTERN GAS RESOURCES INC., Denver, agreed to buy Nerco Oil & Gas Inc.'s Black Lake gas processing plant and related production for $156 million, subject to regulatory approval. The purchase includes a 68.9% working interest in a production unit in Louisiana's Black Lake field, a 180 MMcfd gas processing plant, and a 500,000 bbl salt dome storage site, as well as a 50% interest in the 240 mile Black Lake liquids pipeline from Cotton Valley, La., to Mont Belvieu, Tex. Closing is expected Sept. 1 . Other Nerco assets are being sold to Louisiana Land & Exploration Co. (OGJ, July 26, p. 42).

OIL SPILLS

WASHINGTON STATE'S Department of Ecology imposed a $1 million fine for the July 1991 oil spill stemming from a collision of a Chinese freighter and a Japanese fish processing vessel in international water 22 miles northwest of Cape Flattery, Wash. The penalty, the largest issued for an oil spill in the state, was assessed to China Ocean Shipping Co., owner of the Tuo Hai freighter. State officials believe the Tuo Hai was mainly responsible for the sinking of the 365 ft Japanese vessel Tenyo Maru, which was carrying more than 10,700 bbl of bunker C and diesel fuel when it sank in 500 ft of water, spilling contents and killing sea birds, contaminating tribal and national park beaches, and damaging kelp beds.

U.S. COAST GUARD will hear comments Aug. 27 in Arlington, Va., on its draft voluntary guidelines for oil pollution response training. The guidelines are intended to be a framework from which detailed instructions can be given to persons who fight oil spills at deepwater ports, other marine facilities, or tankers. Meeting details were published in the July 16 Federal Register.

PETROCHEMICALS

MITSUBISHI CORP. plans to build Indonesia's first polyethylene terephthalate resin plant at a cost of $80 million. Construction of the 40,000 metric ton/year plant will begin this year with production start scheduled for mid-1995.

DRILLING-PRODUCTION

BRASPETRO OIL SERVICES CO., an affiliate of Brazil's state owned Petroleos Brasileiro SA, plans an international tender in late August for bids to convert the Petrobras XXV semisubmersible drilling rig to a production unit to be installed in giant Albacora field in the deepwater Campos basin off Brazil. Scope of the work is to include engineering design, procurement, construction, and commissioning of oil and gas processing facilities with capacities of 100,000 b/d and 114 MMcfd.

OCCIDENTAL PETROLEUM CORP. started production of 2,100 b/d of oil and 22 MMcfd of gas from its Ratana discovery in the Potwar region of Pakistan (OGJ, May 31, p. 26). State owned Oil & Gas Development Corp. started production of about 2,500 b/d of oil and 15 MMcfd of gas from Sadkal field in the Margalla Hills area south of Islamabad (OGJ, June 21, p. 36). In both instances, oil moves to the Attock refinery at Rawalpindi and gas to the Sui Northern gas system at Lahore.

DOLPHIN TITAN INTERNATIONAL INC., a unit of Reunion Resources Co., Houston, received an offer from Offshore Rigs LLC to purchase for $8 million cash the three jack up workover rigs owned and formerly operated by Dolphin. The rigs are operated by Sundowner Offshore Services Inc. under a bareboat charter that gives Sundowner the right of first refusal in the offer. The sale is subject to a definitive agreement and other conditions.

INDIA'S Oil & Natural Gas Commission started up Neelam 2 platform in the Bombay offshore area, boosting field production to 7,000 b/d.

ECOPETROL declared Mary and Miraflor fields on the Santana block in southern Colombia commercial and agreed to pay 50% of development and production costs. Argosy Energy International, the Colombian operating unit of Santana operator Garnet Resources Corp., Houston, is to develop the two fields this year and next, subject to government approvals. Until a pipeline is completed across the Caqueta River about mid-1994, Mary and Miraflor production will be shipped by truck and ferry.

ARCO BRITISH LTD. completed its 43/24-3 appraisal well on the Trent discovery in the North Sea's southern gas basin, using the Cecil Provine jack up rig to drill to 12,504 ft in 150 ft of water. The well flowed a combined 48 MMcfd of gas from two Carboniferous sandstone intervals.

ARCO BRITISH claimed the record for the longest step-out development well in the North Sea with a 34 1/2 km link laid between the Orwell field template in Block 50/26a and Thames platform in Block 49/28. Contractor Rockwater Ltd., Aberdeen, laid the umbilical using the Discovery cable ship, followed 300 ft later by the Rockwater 1 vessel that performed trenching.

TENGIZCHEVROIL, Tengiz, Kazakhstan, a 50-50 venture of Chevron Overseas Co. and Tengizneftegas, awarded Bechtel Petroleum, Chemical & Industrial Co. a 3 year contract to participate in an integrated management team that will oversee initial capital construction in Kazakhstan's Tengiz and Korolev oil fields on the northeast coast of the Caspian Sea. Production target is 700,000 b/d of oil by 2010. The fields hold a combined estimate of 6-9 billion bbl of oil.

PARAMOUNT RESOURCES LTD., Calgary, agreed to buy Mobil Oil Canada Ltd.'s interest in Liege gas field in Northeast Alberta for $22.5 million (Canadian). Production there averages 24 MMcfd. Mobil plans to sell 50% of the acreage to J. Aron Resources Co., affiliated with Goldman Sachs & Co.

NORSK HYDRO AS let a 534 million kroner ($73 million) contract to Stolt Comex Seaway AS, Haugesund, Norway, to install and tie in subsea lines for the Troll field oil development project. Amethyst, Seaway Condor, Seaway Pelican, and Seaway Commander construction vessels will carry out the work during 1994-97.

LPG

RUSSIA is stepping up research aimed at making LPG the main alternative to conventional motor fuel. About 300,000 vehicles have been converted to use liquefied gas, and several hundred filling stations are in operation. Increased use of liquefied gas for railway, river, and air transportation is being promoted, and tests are under way on an experimental airliner and helicopter fueld with butane, according to Moscow newspaper Delovoi Mir (Business World).

PIPELINES

PORTLAND NATURAL GAS TRANSMISSION SYSTEM group members expanded their interstate gas pipeline project route and added J. Makowski Co. Inc., Boston, as the line's fifth sponsor. Portland will extend 240 miles from the U.S.-Canada border at Jay, Vt., to the New Hampshire-Massachusetts border at Haverhill, Mass., where it will hook up with the Tennessee Gas Pipeline system. The revised project, estimated to cost $300 million, is expected to start delivering at least 250 MMcfd by Nov. 1, 1997.

GAS STORAGE

OUACHITA RIVER GAS STORAGE CO. LLC (Orgasco) plans to develop an independent gas storage and exchange site with 27 bcf of working gas capacity near the Monroe pipeline hub in North Louisiana. The South Downsville gas storage project is to have peak withdrawal rate of 450 MMcfd and injection of 250 MMcfd. The site could connect with as many as 10 major interstate gas transmission systems via a header system to be built near Monroe. Orgasco is owned jointly by Leucadia National Corp., New York, and Ouachita River Partners LLC, Houston. Matrix Partners Inc., Houston, is sponsor, developer, and manager of the venture.