Aug. 31, 1998
Indian state-owned refiner


Indian state-owned refiner Bharat Petroleum Corp. Ltd. (BPCL) will build a 1.8 million metric ton/year naphtha cracker in Tamil Nadu at a cost of $1.65 billion. The project will be executed in partnership with an as yet unidentified international petrochemicals major. Investment banker SBI Capital Markets is preparing to float a global tender inviting bids for the project, with the help of Engineers India Ltd. The plant, scheduled to go on stream in 2002, will use domestic and imported naphtha. BPCL is negotiating with Tamil Nadu Industrial Development Corp. for infrastructure support for the proposed plant.


The board of directors of Barrington Petroleum Ltd., Calgary, issued a directors' circular recommending rejection of Sunoma Energy Corp.'s recent takeover offer (OGJ, Aug. 24, 1998, p. 34). The board sought financial advice from Nesbitt Burns Inc., which deemed the offer financially inadequate. The board, which voted unanimously in favor of rejection, found the offer "opportunistic" and "highly conditional."

Novus Petroleum Ltd.,
Sydney, plans to sell virtually all its Western Australian exploration and production assets only a year after buying into the portfolio. Estimated to be worth $80 million (Australian), the sale is likely to draw international interest, the main attractions being 12.5% of Harriet oil field and 40% of the Airlie Island oil processing facility. Novus says the assets are a small part of a much higher-value portfolio on which it was preempted by Santos Ltd., Adelaide, during the purchase process.

EEX Corp.,
Houston, agreed to trade its Permian basin properties in West Texas and eastern New Mexico for the shallow-water properties of Birmingham, Ala.-based Energen Resources Corp. In addition to the shelf properties off Texas and Louisiana, EEX will receive $9 million in cash and interests in 24 producing blocks and 30 exploratory blocks. The properties acquired by EEX produce about 21 MMcfed and have proved reserves of 38 bcfe. Energen will receive properties with an average production of about 3,000 boed and proved reserves of 58 bcfe.

closed its acquisition of half of Dallas-based Triton Energy Ltd.'s 50% interest in Block A-18 in the Malaysia-Thailand Joint Development Area (OGJ, July 27, 1998, p. 36).

Total Guinée Equatoriale,
an 80%-owned Total subsidiary, acquired several state oil assets in Equatorial Guinea. The assets were previously owned equally by Total and the government. They include two oil terminals, three products depots, and 16 sales outlets.

Remington Energy Ltd.,
Calgary, acquired for $127.5 million (Canadian) interests in the West Stoddart and Red Creek oil and gas properties near Fort St. John, B.C., from its partner in the operations, Canadian Natural Resources Ltd. (CNR). CNR will receive Remington's nearby Buick Creek property as part of the deal. Remington will obtain net production of 4,500 boed and reserves of 14.6 million boe.

Heavy oil

Partners in Venezuela's Sincor heavy oil project signed a $1.2 billion financing agreement with a New York banking syndicate in support of the $3.6 billion project to produce, upgrade, and market extra-heavy crude from the Orinoco oil belt (OGJ, June 29, 1998, p. 40). The group comprises operator Total 47%, Petroleos de Venezuela SA 38%, and Statoil 15%. The main contracts for the production and processing facilities will be let in September, said Total, and construction will begin shortly thereafter.


Syncrude Canada Ltd. recommissioned a damaged coking unit at its oilsands plant near Fort McMurray, Alta., and resumed production of about 230,000 b/d of synthetic crude. The coker shutdown cut Syncrude's 1998 production estimate to 77.5 million bbl from 80 million bbl (OGJ, Aug. 3, 1998, p. 30).

Trans Mountain Pipe Lines Ltd.
filed an application with Alberta regulators for a $440 million (Canadian) oilsands dual pipeline project. It would build the line for Shell Canada Ltd. and BHP Petroleum Canada Inc. to serve the proposed $1 billion Muskeg River oilsands mine, 56 miles north of Fort McMurray. The Corridor Pipeline would move 215,000 b/d of diluted bitumen south to a $1.8 billion upgrader operated by Shell near Edmonton. A return line would carry 60,000 b/d of solvent north for reblending with produced bitumen.

Calgary, postponed a decision on whether to build a proposed 20,000 b/d, $220 million (Canadian) oilsands plant north of Fort McMurray. The company said low oil prices delayed the decision on the McKay River oilsands development for 1 year from its original date of June 1998.


Sable Offshore Energy Project (SOEP) let contract to Baker Oil Tools, Houston, for monobore completions for the first 12 wells of SOEP, which will comprise Phase 1 of the Sable Island gas fields development off eastern Canada. The completion systems will be rated for a maximum pressure of 12,000 psi at 300° F. The system will use Baker Oil Tools' Flex Lock liner hangers with JMZXP packer technology and snap-in/snap-out shear release tie-back seal assembly technology.

A Superior Court judge
found Vintage Petroleum Inc., Tulsa, responsible for the deaths of three workers killed by poisonous gases encountered while they were converting an idled producing well to one for solid waste disposal (OGJ, Aug. 22, 1994, p. 22). The judge said Vintage wrongly assumed there would be no gas and no pressure from the well, and that a Vintage supervisor did not hook up a safety flow line. The judge placed 10% of the blame on one worker for his own death, saying he violated standard safety practices by attempting a rescue without testing for gases or wearing proper equipment. The case entered the penalty phase. Vintage is expected to appeal.

Cultus Petroleum NL,
Gordon, Australia, completed a cased-hole wire line test of appraisal well Tenacious West 1 on Permit AC/P4 in the Timor Sea, recovering 19.5 l. of 49.4° gravity oil plus solution gas at 2,753 m from the top of the primary target Tithonian sandstone. The well was completed as a future producer. Melbourne's Woodside Petroleum Ltd., originally 80% owner of the Tenacious discovery well on Permit AC/P17, sold its stake to 20% owner Cultus when mechanical problems arose during drilling. Woodside also relinquished its interest in Tenacious West, but holds 80% of the remainder of AC/P4.


A private consortium is commissioning the 700-MW Samalayuca II power plant at Ciudad Juarez, Mexico. The plant is owned by GE Power Systems, GE Capital Structured Finance Group, El Paso Energy International, InterGen (a joint venture of Bechtel Enterprises and Shell Generating Ltd.), and ICA of Mexico City. It will supply power to about 1 million residents and 300 factories. Two of Samalayuca II's three GE STAG 107FA gas-fired modules have started up. The turbine generators can use natural gas or distillate fuel and employ dry, low-NOx combustion systems, which limit NOx emission to 25 ppm.


Chinese Petroleum Corp. and Ho Tung Chemical Corp. are studying a joint plan to supply petroleum products to China. Under the proposed scheme, CPC will sell its products to Chinese firms, while Ho Tung will build and operate storage facilities. Ho Tung is currently cooperating with Chinese partners to build storage tanks for petroleum and petrochemicals at Lianyun, Tianjin, and Shanghai. When completed in the first half of 1999, the three facilities will be capable of handling a combined 3 million metric tons/year.


Conoco (U.K.) Ltd. encountered a significant oil and gas column with a wildcat drilled in U.K.'s West of Shetland offshore area, according to license partner British-Borneo Petroleum Syndicate plc, London. British-Borneo said the 204/14-1 well has been logged and cored. Conoco will drill another well on Block 204/14 to target the nearby Onslow prospect. Alan Gaynor, British-Borneo chief executive, said, "We are extremely pleased with the 204/14-1 results so far and look forward to an appraisal drilling program."

Unocal Indonesia Ltd.'s
West Seno 2 deepwater discovery well in Kutei basin off Indonesia flowed 10,069 b/d of 39° gravity oil and 9.5 MMcfd of gas through a 11/2-in. choke with flowing tubing pressure of 830 psi. The well tested an interval at 8,007-64 ft TVD subsea. Unocal said a recent drill stem test of a deeper interval was successful, but equipment problems prevented a high-rate test. In total, West Seno 2, drilled in 2,800 ft of water, cut 172 ft of net pay in two zones at 7,300-8,600 ft. Operator Unocal owns a 50% working interest in the Makassar Strait PSC; Mobil Makassar holds the remaining 50%.

BG plc
and Texaco Inc. made a "significant" gas/condensate discovery on Block 5a in the East Coast Marine Area off Trinidad. Dolphin Deep 1 discovery well, operated by BG, is about 60 miles off Galeota Point, Trinidad, in 650 ft of water. The well cut 546 ft of net gas pay in three zones and, on test, flowed at a rate of 36 MMcfd of gas and 430 b/d of condensate through a 44/64-in. choke with flowing tubing pressure of 3,550 psi. BG and Texaco expect the gas associated with Dolphin Deep 1 to be produced through the existing facilities of nearby Dolphin field, allowing for rapid development of the discovery.

Unocal Corp.
and Mitsui Oil Exploration Co. Ltd., Tokyo, agreed to acquire from Thailand's PTT Exploration & Production plc (Pttep) a 20% stake in three gas-prospective blocks-B14, B15, and B16-adjacent to the Thai-Vietnamese boundary in the Gulf of Thailand. In return, the combine agreed to fund all exploration costs, estimated at $60 million, for the 3,900 sq km area. Pttep Pres. Prajya Phinyawat said Unocal and Mitsui also will provide Pttep with technical support for the project, overseas investment opportunities, and additional financial considerations. Pttep will operate the blocks and retain an 80% share.

Corridor Resources Inc.,
Halifax, began a 497-mile seismic survey of its licenses in the Gulf of St. Lawrence. Geophysical Services Inc., Calgary, is conducting the survey with the Polar Duke seismic vessel. Results are expected in mid-September. Exploration could begin as early as 1999, based on survey results.

Taiwan's Chinese Petroleum Corp.
(CPC) and China National Offshore Oil Corp. (Cnooc) agreed to form a joint venture to explore a 15,400 sq km block southeast of the Zhu Jiang River estuary off China's Guangdong Province. The venture-the first between oil producers in Taiwan and China-is based on an agreement signed in April between Cnooc and CPC subsidiary Overseas Petroleum Investment Corp. (OPIC). By entering the venture through OPIC, CPC will bypass government restrictions that ban it from directly cooperating with mainland Chinese oil and gas firms. Each company will invest $450,000 in the project.


Repsol acquired National Gaz, a Moroccan butane distributor with a 30% market share in northeastern Morocco (mainly Oujda, Nador, and Fez). The company's 1997 turnover was more than 1 billion pesetas. Repsol is reportedly negotiating with other Moroccan butane distributors.

Gas marketing

A group of seven Alberta natural gas producers, led by Paramount Resources Ltd., Calgary, agreed to acquire Pan-Alberta Gas Ltd., the gas brokerage unit of TransCanada PipeLines Ltd., Calgary, for $5 million (Canadian). The sale would turn Pan-Alberta into a producer cooperative. The same producers are involved in a $155 million class-action suit against Pan-Alberta, a former unit of Nova Corp., Calgary. They claim that producers' gas as far back as 1986 was diverted from the sales stream to help Nova's pipeline network meet delivery commitments. The producers are asking that the new Pan-Alberta be split into two entities, one to continue operations and one to handle the lawsuit.


Canada's National Energy Board approved routing for an extension of the Trans Quebec & Maritimes Pipeline from Lachenaie, Que., to the Canada-U.S. border near East Hereford, Que. The 132-mile extension and associated facilities will connect with the Portland Natural Gas Transmission System. The $273.8 million (Canadian) line is scheduled to be in service Nov. 1, 1998. Initial capacity will be 152.2 MMcfd to U.S. markets and 33.7 MMcfd to Quebec markets. The volumes would increase in the second year to 210 MMcfd and 48.7 MMcfd, respectively.

Iraq and Syria
signed a memorandum of understanding to restore and return to service an oil pipeline between northern Iraq and Syria's Mediterranean port of Baniyas. The pipeline was last in service in 1982. A restart date has not been set.

Midcoast Energy Resources Inc.,
Houston, entered a definitive agreement to purchase El Paso Field Services Co.'s Anadarko pipeline system in Oklahoma and Texas for about $35 million. The system comprises more than 696 miles of 16-in. and 20-in. pipeline. It has a total capacity of 345 MMcfd and an average throughput of 151 MMcfd. The acquisition includes 11 compressor stations and interconnections with eight major pipelines.


Chinese firm Concord Oil & Petrochemicals Ltd. let a $300 million contract to Samsung Engineering Co., Seoul, to construct a refinery at Ningbo, China. Samsung will provide engineering, procurement, and construction on a turnkey basis. Included in the contract, for Phase 1, are a crude distillation unit and 100,000 b/d catalytic cracking unit. Completion is scheduled for yearend 2000. Phase 2 of the project will involve other processing units.

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