Dec. 7, 1998
Mexico's Energy Regulatory Commission


Mexico's Energy Regulatory Commission (CRE) issued an independent power producer (IPP) generation permit to Fuerza y Energ!a de Hermosillo, a unit of Spain's Uni?n Fenosa y Acci?n Exterior. Fuerza will build the $185 million, 253-MW thermoelectric plant at Hermosillo, Mexico. It will be fueled mainly by natural gas, using diesel as an alternative, and will consume about 11.9 bcf/year and produce 1,800 GW-hr/year. This is the second IPP permit issued by CRE. The first was granted to AES M?rida III in 1997. Mexico's Federal Electricity Commission signed a contract with Fuerza to purchase power from the Hermosillo plant.


Amoco Canada Petroleum Ltd. and Northstar Energy Corp., both of Calgary, discovered natural gas with the WeeJay d-57-G-93-I-09 well, in northeastern British Columbia. The well was drilled to 15,100 ft into the Mississippian and tested at a rate of 20 MMcfd. Further tests and delineation drilling are needed to estimate reserves. Operator Amoco 51% signed an agreement with Northstar 49% in December 1997, to explore for gas in the northern Rocky Mountain foothills of British Columbia. Amoco has rights to 600,000 acres in the area.

ARCO Alaska Inc.,
PetroFina Delaware Inc., and Murphy Exploration & Production Co. formed a North Slope exploration alliance, called the Stockton Islands Alignment Agreement. The agreement covers all or parts of 16 leases totaling more than 48,500 acres near Mikkelsen Bay, 20 miles east of Prudhoe Bay oil field. Interests in the leases are ARCO 46%, PetroFina 30%, and Murphy 24%.


Penn Octane Corp., Redwood City, Calif., let a $14 million contract to a unit of Cowboy Pipeline Service Co., Houston, for the construction, operation, and financing of two 8-in. pipelines to be laid from Penn Octane's terminal at the port of Brownsville, Tex., to a new terminal to be built at Matamoros, Mexico, about 21 miles away. One pipeline will transport LPG, terminating in a new storage and dispensing facility capable of loading more than 23,809 b/d. The second will carry refined products from a 300,000 bbl storage facility to the newly built Matamoros terminal. The project is slated for completion in late spring 1999.

Heavy oil

Caracas-based Sincor CA, a consortium of France's Total, Petroleos de Venezuela SA, and Norway's Statoil, let a 170 million deutschemark turnkey contract to Krupp Uhde GmbH, Dortmund, Germany, for the supply of a 422 ton/day hydrogen plant. The plant will be built at Jose, Venezuela, 200 km northeast of Caracas, where Sincor is building a heavy oil upgrader (OGJ, Sept. 21, 1998, p. 46). The plant is slated for operation by yearend 2001.


Enron Europe Ltd. bought the Teesside Utilities & Services (TUS) unit of Imperial Chemical Industries plc (ICI) for £300 million. TUS provides industrial customers in the Wilton, Billingham, and North Tees areas of northeast England with natural gas, electrity, steam, and water. Among TUS's customers are petrochemicals plants operated by ICI, BP Chemicals Ltd., Du Pont (U.K.) Ltd., Air Products plc, and Union Carbide Corp. The transaction is expected to be finalized by yearend. The unit's 560 employees will transfer to Enron.

A partnership
between a unit of Abraxas Petroleum Corp., San Antonio, and a unit of GE Capital Structured Finance Group, Stamford, Conn., purchased about 8,700 net acres of natural gas producing properties in the Wamsutter area of southwestern Wyoming's Green River basin from Abraxas for $60.2 million. The properties hold 44 net wells. Abraxas will continue to operate the properties, maintaining a 1% interest in the partnership, and will retain certain deep rights and unproven leasehold interests. The properties' total proven reserves, as of Dec. 31, 1997, were estimated at 76.6 bcfe.

Equatorial Energy Inc.,
Denver, acquired certain western Canada assets from Gulf Canada Resources Ltd., Calgary, for $50 million (Canadian) in cash and $20.5 million in Equatorial convertible preferred shares. The properties in Alberta, southwestern Saskatchewan, and northeast British Columbia include 340,000 undeveloped acres. Production is 5,300 boed, about 55% of which is natural gas. Gulf said the sale will allow it to concentrate on core areas and give it an equity position in Equatorial.

Gaz de France International
acquired Oslo-based Saga Petroleum AS's interest in Production License 120 in the Norwegian North Sea for 530 million kroner. This transaction includes Saga's 4.2% interest in Visund oil and gas field. Operated by Norsk Hydro AS, Visund is slated to begin producing in May 1999. Saga said Visund's reserves are estimated at 305 million bbl of oil and 50 billion cu m of gas.

Deutag AG,
Bad Bentheim, Germany, plans to purchase Stavanger-based Smedvig AS's U.K. North Sea platform drilling operations for 340 million kroner. The agreement includes platform drilling contracts on six fixed installations and production services contracts on two fixed installations and one mobile production unit. This sale reinforces Smedvig's intentions to focus on the mobile units segment of the offshore drilling markets in the Norwegian North Sea and Southeast Asia, said Smedvig.


An explosion at Equilon Puget Sound Refining Co.'s Anacortes, Wash., refinery killed six people last week. The plant was recovering from a power failure caused by wind storms when the refinery's coker unit exploded, sending nontoxic black smoke several hundred feet into the air, said a witness. Two of the six killed were Equilon employees, and the other four were contract employees of Western Plant Services Inc. Refinery operator Equilon Enterprises LLC is a joint venture of Shell Oil Co., Texaco Inc., and Saudi Arabian Oil Co. At presstime, the cause of the blast was still under investigation.

Phillips Petroleum Co.
will license its Reduced Volatility Alkylation Process (Revap) to Cenco Refining Co. Revap uses an altered hydrofluoric (HF) acid catalyst system that, when used in existing HF alkylation units, makes it possible to reduce airborne HF by 60-90% in the event of an unexpected release. Cenco will use the process in its 50,000 b/d refinery at Santa Fe Springs, Calif.

A grassroots refinery
jointly owned by Bharat Petroleum Corp., IBH, and the Assam government, is expected to start up this month. The 60,000 b/d refinery, at Numaligarh, in India's Assam state, is designed for maximum middle distillate production.


Indian Oil Corp. (IOC) announced plans to build a 13 million metric ton/year crude oil import terminal at Pipavav, Gujarat. IOC also has a crude import terminal at Vadinar, Gujarat, and one at Haldia, West Bengal. Crude will be transported from Pipavav to IOC's Koya* refinery through a 305-km pipeline. The project is expected to be completed in fiscal year 2002-03.


Union Carbide Corp. and Malaysian state firm Petronas chose Kvaerner Process and Kvaerner (Malaysia) Sdn. Bhd. as project management consultancy contractors for their joint venture Ma- laysian petrochemical complex (OGJ, Apr. 13, 1998, p. 38). The partners also let a turnkey contract to Germany's Linde AG and Linde Engineering & Contracting (Malaysia) Sdn. Bhd. for engineering, procurement, and construction of the complex's olefins cracker.


Sunwing Energy Ltd., Calgary, plans to develop its third oil field project in China. The company will conduct a joint venture study of the Tuyuke oil field, near Turpan in northwestern China, together with the Tuha Petroleum Exploration & Development Bureau. Sunwing said the field has an estimated 800 million bbl of oil in place. The Tuha Bureau represents China National Petroleum Corp., with which Sunwing has two active production-sharing contracts for properties in Daqing and Dagang field areas (OGJ, Nov. 30, 1998, p. 31).

Royal Dutch/Shell
reopened five oil flow stations, restoring 30,000 b/d of flow to the Forcados terminal in southern Nigeria. The stations Egwu 1 and 2 and Odidi 1 and 2 are in complete operation, while Jones Creek station was reopened but needs further repairs. The company aims to reopen seven more stations shortly. About 230,000 b/d of Forcados oil was shut in after militant youths seized the stations over the last 2 months (OGJ, Oct. 26, 1998, p. 35).

installed Siri platform on Nov. 18 off Denmark after delays caused by bad weather (OGJ, Nov. 30, 1998, p. 34). The jack up production unit was mounted on a seabed storage tank that was installed in the field earlier this year (OGJ, Aug. 17, 1998, p. 54). First oil from Siri is anticipated in January 1999.

Cairn Energy plc,
Edinburgh, replaced a single buoy mooring (SBM) in Ravva field off India. The SBM had failed in high seas during October. Cairn said oil production resumed on Nov. 28. The field previously produced 35,000 b/d of oil, but output is expected to reach 50,000 b/d shortly.

Oryx U.K. Energy Co.
renewed its drilling contract with KCA Drilling Ltd., Aberdeen, covering three U.K. North Sea platforms: Ninian, Hutton, and Murchison. The term of the contract, worth more than £13 million/year to KCA, is 3 years and 2 months, with options to extend. The scope of work includes platform drilling, provision of drilling crews, maintenance, and provision of tubulars.

Saga Petroleum
will have the hull for its Snorre B production semisubmersible built at the C diz, Spain, yard of Dragados Offshore SA. Dragados was awarded the contract by the alliance of Oslo-based Kvaerner AS and Aker Maritime AS, which is building the platform under a $750 million main contract (OGJ, May 4, 1998, p. 49). The hull will consist of a circular pontoon with four columns supporting the deck and will weigh 57,000 metric tons. Work on the hull is expected to begin in May 1999 for delivery to Aker's Stord yard near Stavanager for deck installation. Snorre B is due to begin production in second half 2001.

Texaco North Sea U.K. Co.
let a £100 million contract to Kvaerner Oil & Gas Ltd., London, for engineering, construction, and installation of a process and utilities platform on Block 13/22a Captain field. The platform will boost production to 85,000 b/d from 60,000 b/d and enable development of Captain's eastern area. It will be bridge-linked to the existing wellhead platform. Installation of the platform and start of drilling is scheduled for summer 2000, with first oil from the eastern area anticipated later that year.

Enron Oil & Gas India Ltd.
let a front-end engineering and design contract to Kvaerner Process India for two wellhead platforms to be installed in Panna field off India's west coast. The work on the PH and PJ platforms is expected to take about 35,000 man-hr and will be done at Kvaerner's Bangalore office. The work began last month and is expected to take 15 weeks.

Cabinda Gulf Oil Co. Ltd.,
a unit of Chevron Corp., let contract to Coflexip Stena Offshore Group to lead a consortium of companies for the design, construction, and installation of Kuito Phase 1A facilities on Block 14 off Angola. Other members of the consortium include Switzerland's SBM and ABB Offshore Technology Inc., Houston. The work will include engineering, supply, and installation of about 20 km of flow lines and risers and about 13 km of umbilicals. Cabinda Gulf reported its third oil discovery on Block 14 earlier this year (OGJ, July 13, 1998, p. 38). First oil is scheduled for fall 1999.


FPL Group Inc., Juno Beach, Fla., plans to acquire certain geothermal power plants, known as The Geysers, with a total capacity of 700 MW, from Pacific Gas & Electric Co. for $213 million. The transaction is expected to be completed by second quarter 1999, pending Federal Energy Regulatory Commission and California Public Utility Commission approval. The Geysers are 70 miles north of San Francisco in Sonoma and Lake Counties.

CalEnergy Co. Inc.
let two contracts to Stone & Webster Inc., Boston, for work on two geothermal power projects in the Salton Sea geothermal area of Southern California's Imperial Valley. The contracts are for engineering, procurement, and construction of a new 49-MW geothermal plant and additional facilities near existing Salton Sea Unit 3 and 4 plants, owned and operated by units of CalEnergy. The contracts are worth a combined $141 million.


Amoseas Indonesia Inc. let contract for an undisclosed price to Stone & Webster for engineering, design, procurement, and construction of a cogeneration power plant at Duri field, in Sumatra, Indonesia. The plant will produce 305 MW of electricity and steam, which will be used to enhance oil recovery in the field. Construction is planned to begin in fourth quarter 1998, with start-up slated for fourth quarter 2000.


Chevron Corp. launched a 305,500 dwt, double-hull tanker at Koje, South Korea. The tanker, named M/T Frank A. Shrontz, is the largest of Chevron's 11 double-hulled tankers and is the first of four being built for Chevron by Samsung Heavy Industries Co., Seoul. The tanker will carry 2.2 million bbl of oil from the Middle East to Chevron's U.S. coastal refineries.

The U.S. Coast Guard
may allow single-hull oil tankers that are refitted with double sides or bottoms to remain in service longer. The 1990 Oil Pollution Act allows longer life spans for double-hulled tankers than for single-hulled ships. The Coast Guard said many shippers are interested in conversions, if it would reclassify the ships as double-hulled.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.