INDUSTRY BRIEFS

GOVERNMENT

YEMEN'S

Ministry of Oil and Mineral Resources did not ratify the production sharing agreement held by Red Eagle Resources Corp., Oklahoma City, covering Block 13 (OGJ, Aug. 17, 1992, p. 46) because Red Eagle refused to make an earnest money deposit of $1 million in the Central Bank of Yemen, the company said. Red Eagle said there is no such requirement in the 90 page production sharing agreement. The company recently received results of a satellite study of the Yemen block showing faults like those associated with fields discovered by Canadian Occidental Petroleum Ltd. 70 miles to the southwest.

U.K. GOVERNMENT

draft legislation proposes to save British coal mines by measures including a ban on imports of Orimulsion, a fuel based on heavy Venezuelan crude oil (OGJ, Jan. 11, p. 22). Gas fired power generation projects are not specifically targeted. BP Bitor Ltd. imports 1.3 million metric tons of Orimulsion a year to supply two power stations, about 1% of the U.K. power station fuel market.

EXPLORATION

ANADARKO PETROLEUM CORP.'S

1 EMK wildcat on El Merk Block 208 in Algeria's Ghadames basin (see map, OGJ, July 3, 1989, p. 22) flowed 1,972 b/d of 46 gravity oil and 3.7 MMcfd of gas through a 3/4 in. choke from 10 ft of perforations in Triassic sandstone. It is the deeper of two potential Triassic pay zones. Anadarko is testing the other zone. Anadarko holds a 50% interest in the 12,300 ft well with Lasmo Oil (Algeria) Ltd. 25% and Maersk Oli Algeriet AS 25%.

EXPLORATION CO. OF LOUISIANA INC.

(XCL), Lafayette, and China National Oil & Gas Exploration & Development Corp. signed a contract covering exploration and development on the Zhao Dong block in Bohai Bay. The 197 sq km tract extends from the shoreline in Dagang oil field to water about 5 m deep. XCL has a seismic survey under way and plans to begin drilling before yearend.

GLOBEX FAR EAST,

a unit of Global Exploration, Dallas, took a farmout on Block WA-209-P in the Carnarvon basin off Australia. Hadson Energy Ltd., Oklahoma City, recently became operator of the block with a 37.5% interest (OGJ, Feb. 8, p. 40). Participants Globex 37.5%, BHP Petroleum Pty. Ltd. 10%, Phillips Australian Oil Co. 6.25%, and Norcen International Ltd. 8.75% plan to drill a wildcat on the block during the second quarter. Evaluation of other prospects is in progress.

BRITISH PETROLEUM CO. PLC

signed a 9 year exploration and production agreement with Algeria's Sonatrach covering an area near Sour El Ghozlane, 160 km south of Algiers. The contract includes acquiring 600 line km of seismic data and drilling five wells. About $45 million will be spent on research and exploration during the contract period, OPEC News Agency reported. The companies agreed to set up an association to jointly develop oil reserves and sell the gas.

TRANSPORTATION

BRAZIL'S

Petroleos Brasiliero SA (Petrobras) and Bolivia's YPFB confirmed terms of an agreement calling for Brazil to import natural gas from Bolivia (OGJ, Sept. 14, 1992, Newsletter). The two decided on a route through Bolivia from Rio Grande to Puerto Suarez and in Brazil from Corumba to Campinas to Curitiba. Petrobras said gas demand in southern Brazil will require initial imports of 280 MMcfd, increasing to 560 MMcfd in 7 years. Deliveries from Bolivia are expected to begin in early 1997.

GEORGIA

completed repairs on a pipeline that carries gas from Turkmenistan to Armenia via Georgia, which was shut down since a Jan. 20 explosion (OGJ, Feb. 1, p. 24). It is the only gas pipeline in the area, supplying about 141 MMcfd of gas. The pipeline was to resume operations Feb. 16.

CALIFORNIA PUBLIC UTILITIES COMMISSION

(CPUC) approved Southern California Gas Co.'s unbundled storage services program, available to existing customers and off-system users. The services can be purchased through long term contract or rollover year to year programs. The program allows SoCalGas to structure fixed prices for long term storage service contracts subject only to a negotiated escalation clause. Services can be firm or as available. Inventory, injection, and withdrawal services will be available.

MCFARLAND ENERGY INC.,

Santa Fe Springs, Calif., plans a gas storage project in Ten Section field, Kern County, Calif. A CPUC order requiring utilities to separate natural gas storage costs from transportation costs facilitates the project and authorizes McFarland to charge market rates for storage services, enabling it to negotiate individualized rates without the risk of later changes. The decision requires utilities to connect independent storage fields with intrastate transmission facilities.

SOCALGAS

agreed to provide wholesale gas transportation and storage service to Southwest Gas Corp.'s customers in southern California under a contract that is expected to save Southwest's customers as much as $3 million/year. The contract calls for transportation of about 11.2 bcf/year of Southwest's gas, Storage inventory of 1.5 bcf will be available to Southwest. Pacific Gas & Electric Co. currently supplies transportation to Southwest under a contract that expires Apr. 20.

REFINING

CONOCO INC.

and Pennzoil Products Co. started a feasibility study covering construction of a lube oil plant at Conoco's Lake Charles, La., refinery. If built, the unit would increase the refinery's capacity to process heavy sour crude by 100,000 b/d, of which 14,000 b/d would be produced as high quality base oils for lubricants manufacturing. The project would take 33 months to build.

ULTRAMAR CANADA INC.

will process about 22,000 b/d of crude oil for Statoil North America Inc. under an 18 month agreement that was effective Feb. 16. Most of the processing will take place at Ultramar's 20,000 b/d Halifax, N.S., refinery for export. The part of Ultramar's market demand supplied by Halifax will be supplied out of Ultramar's 120,000 b/d refinery at St. Romuald, Que., which is being expanded to 140,000 b/d.

AMERADA HESS CORP.

is being investigated by the U.S. Environmental Protection Agency and Federal Bureau of Investigation for allegedly shipping spent catalyst from its St. Croix, Virgin Islands, refinery to various sites throughout the U.S. The company said it is also being investigated for possible criminal wrongdoing involving the illegal shipment and disposal of hazardous waste that at the time of shipment had been improperly classified as a nonharmful material. Amerada is providing full cooperation with the investigations and has acknowledged that employee error may be to blame.

OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL

local union in the San Francisco Bay area reached tentative agreements with Tosco Corp. and Shell Oil Co., and the national union has okayed an agreement with Chevron Corp. that settles outstanding issues in the bay area. Local OCAW officials rejected offers made by Ashland Petroleum Co. covering workers at two Kentucky refineries, but negotiations were continuing there at presstime.

MOBIL CORP.

completed the $300 million expansion of its Beaumont, Tex., refinery (OGJ, Dec. 10, 1990, p. 27) enabling it to process more low cost, heavier crude. The project increased distillation capacity to 310,000 b/d from 275,000 b/d and involved expanding and modifying the coker unit, hydrocracker, and one crude unit. Mobil also installed a continuous reformer and two sulfur recovery units.

TOTAL

applied to regional authorities to restart the undamaged section of its 120,000 b/d Provence refinery at La Mede, shut down since an explosion last Nov. 9 killed six persons and injured one (OGJ, Nov. 16, 1992, p. 39). The company hopes to receive approval in time to restart the diesel fuel and gasoline storage, pumping, and dispatch systems in March. A commission set up to investigate the accident is to report its findings to authorities before the end of March.

SHELL EASTERN PETROLEUM (PTE.) LTD.

will install a $38 million sulfur emission reduction plant at its Pulau Bukom refinery in Singapore. To be on stream in 1995, the plant is designed to cut sulfur dioxide emissions by more than 20%, in line with the government's Green Plan.

DRILLING-PRODUCTION

PHILLIPS PETROLEUM CO.

replaced 125% of its 1992 worldwide hydrocarbon production on an oil equivalent basis. Total 1992 hydrocarbon production was 182 million bbl of oil equivalent (BOE). Phillips replaced 78% of its U.S. reserves. Extensions, discoveries, and improved recovery equaled 106% of production worldwide, while revisions of estimates made up the remainder of reserves replacements. Worldwide proved reserves increased 2.3% to more than 2 billion BOE in 1992.

SPILLS

TEXAS' GENERAL LAND OFFICE

(GLO) audits of coastal oil handling facilities show many sites have unworkable spill contingency plans and many workers are inadequately trained in the use of plans to properly deal with spills. Starting early last January, auditors visited five facilities from the Beaumont-Port Arthur area to Brownsville. GLO officials said of the five, only the Baytank Inc. facility in Seabrook showed it can effectively implement its spill plan. GLO plans to audit more than 600 sites along the coast.

PETROLEUM ASSOCIATION OF JAPAN

is preparing to establish an oil containment boom and skimmer storage base in Malaysia facing the Strait of Malacca. Plans include storing 500 m of boom and two oil skimmers that will be ready for hire in the event of a spill. Site of the base has not been chosen.

U.S. ENVIRONMENTAL PROTECTION AGENCY

wants to revise a rule under the Oil Pollution Act to require better contingency plans against oil spills from storage tanks. Operators of aboveground tanks larger than 660 gal or underground tanks larger than 42,000 gal would be required to reevaluate their contingency plans to determine if a leak would cause "substantial harm" to the environment.

PETROCHEMICALS

CHINA

began building a 300,000 metric ton/year ethylene plant and a 300,000 ton/year ammonia plant in Jilin, Jilin province (OGJ, Jan. 18, p. 12). Officials said completion of the projects will make Jilin Asia's largest chemical manufacturing center.

CHINA NATIONAL TECHNICAL IMPORT & EXPORT CORP.

let a $35 million contract to Snamprogetti SpA to provide licensing, basic and detailed engineering, materials, start-up supervision, and personnel training for a 1,760 metric ton/day urea plant at Jiujiang, Jiangxi province.

SAUDI BASIC INDUSTRIES CORP.

affiliate East Petrochemical Co. secured a $350 million loan to double production from two plants at Al-Jubail, Saudi Arabia. Capacity of its ethylene glycol plant will be raised to 660,000 metric tons/year, while its linear low density polyethylene plant output will be boosted to 280,000 metric tons/year. The plants will go on stream in late 1993 and early 1994, respectively.

TAIWAN'S TUNTEX PETROCHEMICAL CO.

let contract to Grontmij NV of Netherlands to design and build a $12 million wastewater treatment unit at its Tainan, Taiwan, purified terephthalic acid plant. The contract is to cover cooperation on design, engineering, and equipment.

COMPANIES

FIVE PRIVATE INVESTORS

from Hong Kong agreed to buy Westcoast Petroleum Ltd., Calgary, from parent Westcoast Energy Inc., Vancouver, B.C., for $247.5 million (Canadian). The sale, expected to close May 5, is part of Westcoast Energy's plan to focus on its natural gas business.

BP EXPLORATION (ALASKA) INC.

reached a settlement with Alaska calling for BP to pay the state $630 million in added taxes and interest June 30 for Alaska's worldwide unitary apportionment income tax. The settlement resolves several issues, including characterization of foreign taxes, deductibility of the "windfall profits" tax, and constitutionality of worldwide combination as applied to foreign companies.

FRANCE'S

Institut Francais de Petrole (IFP) and Total and Stone & Webster Engineering Corp. (S&W), New York, signed an agreement to jointly develop a new generation of catalytic cracking technology intended to improve catalyst selectivity and efficiency. Each of the three currently licenses a proprietary fluid catalytic cracking technology. In a first stage, plans call for defining a joint process that combines advantages of Total/IFP and Stone & Webster technologies. That in turn will lead to an eventual commercial scale demonstration of an advanced process to be marketed and licensed by IFP and S&W.

FREEPORT-MCMORAN INC.,

New Orleans, plans a downsizing program designed to provide $33 million/year in savings. Plans include outside sources for the research and engineering, environmental, and safety departments, which will include laying off 94 employees. The company also will lay off 90 persons in a streamlining program.

ENRON GAS SERVICES CORP.,

Houston, plans to buy Louisiana Resources Co. and other Louisiana gas and gas liquids operations from Williams Cos. Inc., Tulsa, for $170 million. The deal includes a 540 mile gas pipeline that provides the basis for sales and transportation service totaling about 730 MMcfd, a gas processing business, and a gas storage site near Chacahoula, La., that is to be operational this fall. The deal is expected to close by Mar. 31.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.