INDUSTRY BRIEFS

Taxes

Alaska and Exxon Corp. resolved several long-standing tax issues for $254 million in tax and interest payments-$62 million in taxes and $192 million in statutory interest. The dispute involved additional taxes owed by Exxon under Alaska's oil and gas corporate income tax during 1979-81 and under the state's oil and gas production tax for North Slope oil produced during 1979-86, a state official said.

Pipelines

Epic Energy Australia Ltd. acquired the Dampier-Bunbury natural gas pipeline in Western Australia for $2.3 billion (Australian). Epic plans to spend $850 million more to double the line's capacity by 2007. The 1,530-km line will transport gas from North West Shelf gas fields to southwestern Western Australia. Epic is jointly held by El Paso Natural Gas Co., El Paso, 30%; Consolidated Natural Gas Co., Pittsburgh, 30%; and Australian-based fund managers AMP Axiom Funds Management and Hastings Fund Management.

Gas storage

Enron Corp., Houston, will enhance performance and flexibility of its 117 bcf/year Bammel natural gas storage site in Southeast Texas and upgrade Houston Pipe Line Co.'s (HPL) capacity for moving natural gas in and out of the facility, which serves the Texas Gulf Coast industrial market and Houston gas utilities. HPL will drill four new storage wells and lay a 12-mile, 30-in. pipeline parallel to an existing HPL pipeline. Expected to be completed by yearend, the combined projects will increase withdrawal capacity nearly 20% to 1.4 bcfd.

Petrochemicals

Queensland Nitrates Pty. Ltd. let a turnkey contract to Krupp-Uhde GmbH unit Shedden Uhde Pty. Ltd., Melbourne, to build a 180,000 metric ton/year ammonium nitrate complex at Moura, Queensland. Start-up is set for early 2000. Natural gas or coalbed methane will be used as feedstock.

Petronas unit
MTBE (Malaysia) Sdn. Bhd., let an engineering, procurement, management, and construction contract to OGP Technical Services Sdn. Bhd. and SWEC Zainal Sdn. Bhd. for a propane dehydrogeneration plant in Kuantan, Malaysia. Scheduled to come on stream late in 2000, the 300,000 metric ton/year plant will be part of an integrated petrochemical complex at Gebeng Industrial Estate. The plant will take propane feed from a pipeline from Petronas Gas Bhd.'s processing plant at Kertih.

Terminals

Neste Oil Terminal Riga Ltd., Riga, started up its petroleum product terminal at the new Riga oil harbor. The terminal's annual throughput will be 350,000-500,000 metric tons; it will have six storage tanks with a total capacity of 30,000 cu m. The site includes vessel loading and unloading facilities. The terminal was designed and built by Neste Engineering, and construction began in 1996.

Refining

Syncrude Canada Ltd., Fort McMurray, Alta., selected the Synshift/SynSat technology, co-developed by ABB Lummus Global Inc., Bloomfield, N.J., and Criterion Catalyst Co. LP, for its new 75,000 b/d light gas oil hydroprocessor. The unit is part of a major expansion of Syncrude's upgrader, which will increase synthetic crude oil production to 480,000 b/d from 300,000 b/d. The Synshift/SynSat process uses Criterion's high-activity SynCat/SynShift catalyst and Lummus's integrated two-stage reactor system.

Drilling-production

U.S. Minerals Management Service scheduled meetings Mar. 26 in Albuquerque, N.M., and Apr. 1 in Lakewood, Colo., concerning its royalty rule for oil produced from leases on Indian lands (OGJ, Feb. 23, 1998, p. 27). The rule is similar to one MMS has proposed for federal leases.

MMS
scheduled a Mar. 30 workshop in Denver regarding plans to revise rules governing administrative appeals and alternative dispute resolution processes affecting oil and gas leases. The rules also include authority for MMS to disclose certain proprietary information.

Fina Italiana SpA
and partner Mobil Oil Italiana SpA tested the Tempa d'Emma No. 1 appraisal well in south-central Italy. The well apparently extended the areal limits of Tempa Rossa field, discovered in 1989. Drilled to 20,340 ft TD, the well cut a gross oil column of more than 5,320 ft and flowed on test 8,038 b/d of 16.5° gravity crude. Concession partners are operator Fina Italiana SpA and Mobil 28.23% each, Enterprise Oil Italiana SpA 23.08%, and Lasmo Italia Sud SpA 20.46%.

Exxon Exploration Co.
let a deepwater drilling contract to Global Marine Inc., requiring the Houston-based driller to build a second Glomar 456 Class dynamically positioned drillship. Global Marine said the 3-year contract will generate $208 million in revenues. Exxon has an option by the end of June to reduce the contract term to 2 years. Since Jan. 1, Global Marine has approved more than $800 million to expand its fleet. Rated for 8,000 ft of water, the rig will be delivered early in 2000.

EEX Corp.
signed a letter of intent with Oxy USA Inc. to sublease the Sedco semisubmersible to deepen and appraise the Llano discovery on Garden Banks Block 386 in the Gulf of Mexico. Operator EEX said drilling will begin by the end of the first quarter. Block 386 partners are EEX and Enterprise Oil plc 30% each and PanCanadian and Mobil 20% each.

Shell U.K. Exploration & Production
let a £25 million ($40 million) contract to the Centrilift unit of Baker Hughes Ltd., Aberdeen, for supply of electrical submersible pumps (ESPs). Shell will use 14 pumps to boost gas production from Brent field under a depressurization program intended to give the giant oil field new life as a gas producer (OGJ, Apr. 12, 1993, p. 28). Centrilift is designing the ESP systems for Brent and expects to begin testing in the second quarter. Project start-up is expected Jan. 1, 2000.

Shell U.K. Ltd.
bought all equity interests in part of U.K. North Sea Block 49/23 to increase its stake in Corvette field, which extends into the block from Block 49/24a. Shell and Esso Exploration & Production Ltd. recently secured U.K. Department of Trade and Industry approval to develop Corvette (OGJ, Feb. 16, 1998, p. 28). Shell acquired the partial block for an undisclosed sum from the previous owners: operator Amoco U.K. Petroleum Ltd. and BG Exploration & Production Ltd. 30.77% each, Amerada Hess Ltd. 23.08%, and Enterprise Oil plc 15.38%.

Naftex Energy Corp.'s
Rabeh-1 well in Egypt's West Esh El Mallaha (WEEM) development lease is flowing 2,000 b/d of oil through a 1/2-in. choke. Production is being trucked to the nearby Gebel Zeit terminal on the Gulf of Suez. The Vancouver, B.C.-based company is negotiating for the lease of a rig to start a four-well program. Naftex will start 3D and 2D seismic programs on WEEM in mid-April.

Companies

Dominion Resources Ltd., Richmond, Va., made a cash offer of $183 million (Canadian) for Archer Resources Ltd., Calgary. Dominion would also assume $29 million in Archer long-term debt. Archer produces 57.1 MMcfd of natural gas and 1,755 b/d of crude oil and natural gas liquids. Dominion said the acquisition would increase its natural gas production capacity by about 50%. The offer is expected to close in late April and is contingent on regulatory approvals and two-thirds of Archer shares being tendered.

CXY Energy Inc.,
Dallas, a unit of Calgary-based Canadian Occidental Petroleum Ltd., will acquire 50% of Fina Oil & Chemical Co.'s interests in 64 lease blocks, netting 65,000 acres in the deepwater Gulf of Mexico. Thirty-two prospects were identified on the blocks. Some prospects are near recent discoveries, including the Macaroni discovery. Twenty-one of the prospects are in water depths less than 4,000 ft, while 11 are in deeper water. One or two wells may be drilled in 1998. The majority of the leases have 10-year terms and will qualify for royalty relief.

Gulf Canada Resources Ltd.
and Kerr-McGee Corp. signed a definitive agreement for Gulf Canada to sell its U.K. North Sea operations to Kerr-McGee for $590 million (Canadian). Kerr-McGee claims the acquisition will add proved and potential reserves of 100 million boe, with upside potential. The transaction will be completed in mid-May. The assets to be sold comprise all of Gulf's holdings in the U.K. North Sea and include 28 licenses, including interests in Wytch Farm, Gryphon, Andrew, and Ross fields.

Anadarko Petroleum Corp.
acquired producing properties and related assets from OXY USA Inc. in a transaction valued at about $120 million. The properties are in central Oklahoma's Anadarko basin. Anadarko will purchase working interests in five oil and gas fields covering 37,000 acres with 370 production and injection wells. Current net production from the fields is about 2,600 b/d of oil and 5.4 MMcfd of gas. The acquisition also includes interest in a 120 mile, 8-in. pipeline that delivers CO2 to the fields. Anadarko estimates that the properties contain proved reserves of about 20 million boe.

Columbia Natural Resources Co.,
Charleston, W.Va., acquired 24 oil and gas wells and 5,000 acres of leases in Ontario, from Paragon Petroleum Ltd., Calgary, for $3.6 million.

Gas distribution

Gaz de France will purchase a 38.16% interest in Berlin gas distributor Gasag. Gaz de France won approval from the German Cartel Office after agreeing to cut its nearly 50% holdings in gas distributor Erdgas Mark Brandenburg GmbH to 20%. Erdgas operates in the Brandenburg region near Berlin. Berlin electricity company Bewag, which already held an 11.95% stake, will boost its share to 24.99%. The deals are worth a total of 1.41 billion deutschemarks.

Exploration

Apache Corp.'s Alamein West 1 new-field discovery well on its 3-million-acre West Mediterranean concession in Egypt flowed on test a combined 8,277 b/d of oil and 4 MMcfd of gas from three zones. The middle zone flowed 6,547 b/d of 38° crude and 3 MMcfd of gas through a 1-in. choke with flowing tubing pressure of 645 psi after acid treatment. Log results show a high-porosity, fractured Alamein dolomite structure 300 ft thick, at least half of which is believed to contain oil. The uppermost zone flowed 1,066 b/d of oil and 500 Mcfd of gas through a 3/4-in. choke with flowing tubing pressure of 135 psi from 8,832-42 ft in the Dahab formation. The lowest zone flowed 664 b/d and 400 Mcfd from the AEB (1) formation at 9,324-40 ft. Apache has a two-thirds contractor working interest in the well.

Esso Exploration Angola Ltd.'s
Kissanje well on deepwater Block 15, about 225 miles northwest of Luanda, cut three oil-bearing intervals, two of which flowed at a combined rate of 10,000 b/d of oil. The well was drilled in 3,318 ft of water. Appraisal work is being planned. Kissanje is the first well drilled on the block by operator Esso 40%, BP Exploration (Angola) Ltd. 26.67%, Agip Angola Ltd. 20%, and Statoil 13.33%.

Woodside South East Asia Pty. Ltd.
and partner Cambodian Resources Co. NL signed a production-sharing agreement with Cambodia allowing operator Woodside to acquire 2D seismic on Blocks 5 and 7 over 2 years. The blocks are in the eastern Gulf of Thailand. Cambodian Resources holds 55% interest in the blocks; Woodside South East Asia, a unit of Australian-based Woodside Petroleum Pty. Ltd., holds 45%.

Shell Development Pakistan BV,
a unit of Shell Pakistan Ltd., will sign a deepwater exploration license with Pakistan for Block 2365-1, more than 150 km south of Karachi, according to Pakistan's Petroleum and Natural Resources Ministry. Water depths on the block are 200-2,000 m.

A four-company group
awarded a seismic contract on acreage on the Grand Banks off Newfoundland to Geco-Prakla, a unit of Schlumberger. Geco-Prakla will use the marine vessel Geco Orion to acquire 386 sq miles of 3D seismic over 2 months this summer near Hibernia and Terra Nova oil fields. The survey will cover new leases held by Petro-Canada Ltd., Chevron Canada Resources, Mobil Oil Canada Ltd., and Norsk Hydro Canada Oil & Gas Inc.

Anadarko Petroleum Corp.'s
Sugg/Scott 1208E No. 1 new pool discovery well in Ketchum Mountain field, Irion County, Tex., flowed 960 b/d through a 3/4-in. choke with flowing tubing pressure of 255 psi from an interval at 6,700-31 ft. The Houston-based operator and 100% owner said the horizon is located in a Wolfcamp limestone structure about 3,000 ft below the Clear Fork formation. Anadarko has drilled 195 Clear Fork wells in 4 years. Anadarko also plans to acquire 67 sq miles of 3D seismic in the Ketchum Mountain area this year.

NGL

Four companies signed a letter of intent to form a joint venture to fractionate natural gas liquids produced in the Mobile Bay/Pascagoula, Miss., area. Amoco Oil Co., Enterprise Products Co., Exxon Chemical Co., and Williams Field Services plan to form Baton Rouge Fractionators LLC to build and operate a 60,000 b/d NGL fractionator near Baton Rouge, La. Start-up is scheduled for March 1999. Enterprise will operate the plant and manage fractionation services.

Financing

Hungary's MOL Rt. secured a 125 million ecu ($115 million) loan from the European Investment Bank, Frankfurt. The money will be used to help fund installation of a delayed coker and a hydrogenation plant at the 161,000 b/d refinery at Szazhalombatta, along with modernization of MOL's domestic retail station network. The total investment required is estimated at 49 billion florints ($235 million).

Copyright 1998 Oil & Gas Journal. All Rights Reserved.