March 2, 1998
Australia's High Court


Australia's High Court set aside a judgment against the Commonwealth that found Western Mining Corp. was entitled to compensation after the government revoked its 1977 permit in the Timor Gap offshore region that Australia shares with Indonesia. Western Mining contended that substitute mining rights failed to compensate the company for Elang and Kakatua oil fields and the Undan/Bayu oil field, which were discovered after the permit revocation. The permit was revoked after the Timor Gap treaty was signed with Indonesia in 1989, resolving territorial disputes that allowed oil and gas exploration in the region to proceed.


Amoco Corp. will enter into wholesale markets for unbranded gasoline and distillates in the U.S. Southwest and Mexico through its distillate business unit. Entrance into the market will coincide with the start-up of the Longhorn Partners Pipeline later this year, which will provide first-ever pipeline access to markets in the Southwest from U.S. Gulf Coast refineries (OGJ, July 21, 1997, p. 29). Amoco plans to use the 225,000 b/d capacity pipeline to ship gasoline and distillates to major end users and marketers in West Texas, New Mexico, Arizona, and northern Mexico.


Marine Spill Response Corp. (MSRC) and the Marine Response Alliance (MRA) agreed to coordinate their respective services for customers during emergency oil spill response operations and drills. MRA provides emergency towing, fendering, lightering, salvage, and firefighting services off U.S. coasts. The MSRC provides oil spill response services.


Abu Dhabi Co. let a $40 million turnkey contract to Kvaerner Energy Ltd., Clydebank, U.K., to build a gas turbine power station in Asab oil field, where it will burn associated gas and generate 70 MW of electricity from two Frame 6 gas turbines. The plant will start up in August 1999. The turbines will be fitted with NOx burners, the first time such turbines have been fitted with this technology in the U.A.E.


Sunoco MidAmerica, a unit of Sun Co. Inc., shut down one of its two 70,000 b/d Toledo, Ohio, refinery crude units for repairs following a fire late in February. Sunoco said damage is not extensive, and it expects the unit to be down for 1 week; the other crude unit is still operating. The cause of the fire is being investigated, and there were no injuries.

Kuwait National Petroleum Co.
signed a letter of intent to purchase three Procor GX sulfur granulating units from Procor Sulphur Services Inc., Calgary, for the Mina Al Ahmadi refinery in Kuwait. Installation of the units, which will have a combined capacity of 3,000 tons/day, is part of KNPC's multi-project refinery revamp. Delivery is set for late 1998.

Chinese Petroleum Corp.
(CPC),Taiwan's state-owned oil company, will postpone construction of a 400,000 ton/year capacity asphalt plant in Indonesia following anticipated feedstock supply shortages due to delays in a Pertamina oil refinery expansion project. A CPC official said the $35 million project, undertaken with partners Pertamina and another Indonesian firm, will remain on hold until Pertamina can guarantee feedstock supplies.


Air Products & Chemicals Inc., Lehigh Valley, Pa., will build, own, and operate a $50 million synthesis gas separation plant at Geismar, La., that will serve BASF Corp., Shell Chemical Co., and other petrochemical producers and refiners in the area. Construction will be completed late in 1999. The plant will produce 45 MMcfd of hydrogen, carbon monoxide, and synthesis gas. The investment will further expand Air Products' existing hydrogen pipeline capabilities in the state and establish the company as a new carbon monoxide supplier in the region. The synthesis gas separation unit will be located next to a BASF acetylene plant now under construction.

Wesfarmers Ltd.,
a Perth-based chemical company, and Dyno Nobel Asia Pacific plan to build a $235 million (Australian) ammonium nitrate production plant at Moura in east-central Queensland. The plant will be fed by natural gas from Queensland's Surat basin supplied by Allgas Energy through the AGL pipeline. Construction will start in September, and start-up is set for late 1999. The plant will supply explosives to BHP Coal and Rio Tinto.

Taiwan's Industrial Development Bureau
transferred resin production technology for the packaging of integrated circuits (IC) to three large petrochemical producers: Chinese Petroleum Corp., China Petrochemical Development Corp., and Nan Pao Resins Chemical Co. Ltd. The three firms could produce $91 million worth of resins with the new technology after production starts up. At present, Taiwan produces 10% of resins used by its domestic IC packaging industry.


Marathon Petroleum Gabon LDC and partners began production from Tchatamba Marine field in the Kowe Permit area about 100 miles southeast of Port Gentil, Gabon. The field, under development in 150 ft of water by a converted jack up linked to a 750,000 bbl capacity floating storage vessel, is producing 15,000 b/d of 45° gravity oil. Field reserves are estimated at 20 million bbl. Operator Marathon 56.25% added that Tchatamba South predevelopment work has begun, with first oil expected in second half 1999. Partners include Energy Africa Gabon SA 25% and Santa Fe Energy Resources of Gabon Ltd. 18.75%.

EEX Corp.
agreed to acquire Risjad Salim Petroleum (Tuban) Ltd.'s (RSP) 25% share in the Tuban block production-sharing contract on the island of Java, Indonesia. This transaction will increase EEX's interest to 50% in the block, which contains Mudi oil field. Mudi started producing late in 1997 and is expected to reach 20,000 b/d in the first quarter. In return for the RSP interest, EEX will pay $40 million plus a portion of future net profits.

Three U.K. operators
joined three existing partners of the Aurora project to evaluate gas field development potential for U.K.'s Atlantic Margin region. BP Exploration Operating Co. Ltd., Mobil North Sea Ltd., and Shell U.K. Ltd. joined with original members Texaco Britain Ltd., Conoco (U.K.) Ltd., and Total Oil Marine plc. Elliott Dubuisson, Aurora project manager, said, "Gas development on the Atlantic Margin will require a combined approach."

A Chevron Corp. group
approved a $400 million budget to fund the first phase of redevelopment of LL-652 oil field on Venezuela's Lake Maracaibo beginning in May. Group members include operator Chevron Corp. and Norway's Statoil 30% each and Phillips Petroleum Co. and ARCO 20% each. Over the life of the 20-year agreement, development will cost about $2 billion to recover reserves of more than 500 million bbl. The first phase includes installation of facilities and drilling of wells for a reservoir pressure maintenance program.

Atlantic Caspian Resources plc unit completed a production test of its first development well in Kamenistoye field in Kazakhstan's Aktau region. The well flowed at a rate of 552 b/d through a 20/64 in. choke with 275 psi flowing tubing pressure. Following the test, the well was shut in for pressure build-up and built to the initial shut-in pressures in less than 12 hr. Production from the well is expected to reach 1,250-2,250 b/d, with sales to begin in the first quarter.

Gas processing

Williams Cos. signed an agreement with Exxon Co. USA to process 300 MMcfd of natural gas at a Williams natural gas liquids extraction plant to be constructed near Coden, Ala. The plant, expected to be in service by first quarter 1999, will have 600 MMcfd inlet capacity. The gas from Exxon represents dedicated production from leases in the Mobile Bay area. The remaining capacity will be filled through an offshore expansion project (OGJ, Feb. 16, 1997, p. 39).

Syntroleum Corp.,
Tulsa, will partially fund Catalytica Advanced Technologies Inc.'s research project to develop an advanced process for conversion of natural gas to liquid fuels. Catalytica claims its new class of catalysts could be complementary with and potentially less expensive than some current Fischer-Tropsch technologies. Syntroleum will earn exclusive rights to market the technology, for which Catalytica and its original partners, Mitsubishi Oil and Petro-Canada, will receive royalties. Catalytica received a $2 million, 3-year grant for its methane conversion project from the U.S. Department of Commerce's advanced technology program.

Enron Corp.
unit Enron Capital & Trade Resources Corp., and SLH Corp. signed definitive agreements to develop a $240 million gas-to-liquids plant in Sweetwater County, Wyo. Syntroleum will operate and hold a majority stake in the 8,000 b/d GTL plant. The group contributed $3 million for detailed studies, and Enron may contribute $14.5 million more for a minority interest in the plant. The GTL plant will utilize Syntroleum's proprietary process (OGJ, June 23, 1997, p. 25) and generate more than 50 MW of electricity for sale. Bateman Engineering Inc. is project contractor. Construction starts late in 1998, and the plant will be operational in 2001.


Amerada Hess Ltd. signed two production sharing contracts with Malaysia's Petronas Cariga* Sdn. Bhd. for Blocks PM304 and SK306 off Malaysia. Malay basin Block PM304 covers 10,200 sq km; license obligations include 2,000 line- km of 2D and 50 sq km of 3D seismic and one wildcat and two appraisals. Block SK306 covers 4,400 km off Sarawak, where Amerada will acquire 2,000 line-km of 2D and 100 sq km of 3D seismic data and drill two wildcats. Operator Amerada holds interests of 70% in PM304 and 80% in SK306, with Petronas holding the remainder. Seismic work is planned to get under way in the third quarter.

Elf Congo,
a unit of Elf Aquitaine SA, and partners confirmed a new crude oil discovery in the Haute Mer deepwater area off the Congo. The Bilondo Marine No. 1, 10 miles southwest of N'kossa field, cut 85 ft of net oil-bearing Tertiary sands in two intervals. Operator Elf 51% said the well, drilled in 1,755 ft of water, flowed at a combined rate of 8,520 b/d on drill stem tests of both zones below 5,500 ft. Delineation drilling will follow. Partners include Chevron Oversea Ltd. 30%, state firm Hydro Congo 15%, and Energy Africa Haute Mer Ltd., Cape Town, 4%.

Vastar Resources Inc.,
Houston, cut about 200 ft of net Miocene pay in an exploratory well testing the King prospect in 3,285 ft of water on Mississippi Canyon Block 764 in the Gulf of Mexico, before it had to suspend the well as a result of a fire on the rig drilling the well. Diamond Offshore Drilling Inc.'s Ocean Victory submersible sustained a fire in its engine room Feb. 20; the fire was contained, and non-emergency personnel were evacuated. There were no injuries reported. Vastar is suspending the well while the rig is being repaired.

BHP Petroleum Pty. Ltd.'s
Bir Sir Fatima 1 discovery well on Block 402a in the Berkine basin of eastern Algeria flowed 1,960 b/d of 48° gravity oil through a 1/2-in. choke with 2,334 psi. Operator BHP 45% plans an appraisal well to the southwest and another to the east. Partners include Anadarko Petroleum Corp. 27.5% and Lasmo plc and Maersk Co. Ltd. 13.75% each.


Conoco Asia Ltd. signed a letter of intent with Malaysia's Petronas and Norway's Statoil for a feasibility study of Malaysia's first lubricant base oil facility. The letter establishes a four-party joint venture to construct a 7,500 b/d integrated lubricant base oil plant at Melaka, near two adjoining Petronas refineries, by 2002. Interests are Petronas 40%, Conoco 35%, and Statoil 10%. The remaining 15% is for an unnamed fourth party awaiting confirmation of its interest in the joint venture.


Cross Timbers Oil Co., Fort Worth, will pay $265 million for 260 bcf of proved gas reserves and 1.6 million bbl of proved oil reserves in 88,000 acres in the East Texas basin to EEX Corp. Current net production is 80 MMcfd from 900 wells. Proved developed reserves represent 82% of the value of the properties.

J. Ray McDermott S.A.
a unit of McDermott International Inc., and ETPM, a unit of Group G.T.M. of France, will dissolve their McDermott-ETPM joint venture. J. Ray McDermott (70%) will receive $105 million in cash, the derrick lay barge DLB-1601, and ownership of McDermott-ETPM East and McDermott-ETPM Far East. ETPM (30%) will receive the LB-200 semisubmersible lay barge and acquire Teesside, England-based McDermott Subsea Constructors Ltd. and McDermott-ETPM West.

Gas storage

Ontario Energy Board ruled that Canadian-based CanEnerco Ltd. can operate a natural gas storage facility. The ruling makes CanEnerco the province's first non-utility gas storage operator. The gas that CanEnerco withdraws from the Chatham 7-17-XII storage pool will be transported through the Union Gas system to the Dawn, Ont., hub.


Montell Polyolefins BV plans to boost production capacity for catalysts at its Ferrara, Italy, plant. Here, Montell makes catalysts for its polyethylene and polypropylene processes. Montell said capacity of its Ziegler-Natta catalyst plant will be expanded to more than 600 metric tons/year in January 1999 with start-up of a new 270 ton/year production line. A new catalyst-support production line will be completed at the same time, doubling capacity of support products from 1,400 tons/year.

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