Industry Briefs

Heavy oil

A joint venture of Petroleos de Venezuela SA, Mobil Corp., and Veba Oel AG chose the Sydec delayed-coking process of Foster Wheeler Corp., Clinton, N.J., for a project to upgrade more than 100,000 b/d of extra-heavy crude oil at Jose, Venezuela. The project, to start up in 2001, is the first in which Foster Wheeler and Mobil have combined their delayed-coking technologies and is one of a number of projects targeting exploitation and marketing of extra-heavy crude in Venezuela's Orinoco oil belt.

Power

Pecem Energia SA, a joint venture of Texaco Brasil SA and Brazilian firms Cia. Siderurgica Nacional and Taquari Energetica SA, agreed to sell electricity from a 240-MW, combined-cycle natural gas-fired power plant at Pecem, Brazil, to Coelce, the local utility in Brazil's Ceara state. State petroleum company Petroleo Brasileiro SA will supply gas for the plant, which is to start up in 2000.

Alternate fuels

Sogama, a Spanish waste handling company, let a $45 million contract to Kvaerner plc, London, for two circulating fluidized-bed boilers to be installed in a new waste-to-energy plant near La Coruna, Spain. The boilers will have combined capacity to generate 50 MW of electric power from waste. The plant will be completed by mid-2000.

NGL

Total will build a plant to recover natural gas liquids from its Canadon Alfa and Ara gas fields in Tierra del Fuego, Argentina. The $70 million plant is to start up in 1999 and have capacity to yield 250,000 metric tons/year of LPG and 60,000 tons/year of condensate. LPG will be exported to Chile and Brazil and sold locally. Condensate will be commingled with output from Total's Hidra offshore oil field. Project partners are operator Total and Deminex GmbH 37.5% each and Pan American Energy Corp. 25%.

Storage

Maoming Kingming Co., a 56%-owned unit of Fortune Oil plc, London, signed a letter of intent with China's Maoming Petrochemical Corp. to develop a 1 million cu m capacity crude oil tank farm at the Maoming refinery in China's Guangdong Province. The refinery's distillation capacity is to be expanded to 270,000 b/d from the current 170,000 b/d. The tank farm has a three phase expansion plan-a 400,000 cu m capacity unit followed by two 300,000 cu m capacity units-that will be completed in 2001.

Drilling-production

Sakhalin Energy Investment Co. Ltd., Tokyo, let a $40 million contract to Arctic Pacific Contractors, a joint venture of Fluor Daniel Inc. and Brown & Root Energy Services, to provide engineering, procurement, construction planning, and other associated support services for the Sakhalin II project off Sakhalin Island in Russia's Far East. The project includes offshore oil and gas production platforms, subsea pipelines, onshore oil and gas pipelines, onshore processing facilities, onshore terminals, and onshore infrastructure. Sakhalin Energy Investment is owned by Marathon Oil Co., Royal Dutch/Shell Group, Mitsui & Co. Ltd., and Mitsubishi Corp.

Chevron Corp.
and partner Nigerian National Petroleum Corp. (NNPC) started up Gbokoda oil field in the western Niger Delta area of Nigeria. Gbokoda output is slated to rise to 40,000 b/d of oil by yearend. Gbokoda, the second of four new fields that the JV is scheduled to start up this year-Opolo offshore field was the first, in February-lies on the OML-49 concession 125 miles southeast of Lagos. Gbokoda, also the JV's first zero-flare development, is one of three on the onshore concession block; Benin River-which started up in 1996-and Dibi-planned to start up this year-are the other two.

Eurosov Energy plc,
London, and Central Fuel Co. (CFC), Moscow, formed a joint venture to participate in development of Inam oil field off Azerbaijan, pending an agreement between CFC and Azeri authorities. Eurosov said State Oil Co. of Azerbaijan Republic (Socar) estimates Inam reserves at 1 billion bbl of oil. Amoco Corp. is expected to operate the project (OGJ, Apr. 13, 1998, p. 34) with partners Socar; CFC/Eurosov; and Monument Oil & Gas plc, London.

Brazil's Drillpetro,
which builds and leases production semisubmersibles to state petroleum firm Petroleo Brasileiro SA (Petrobras), ordered six drilling packages worth $55 million from Aker Maritime ASA, Oslo. The first will be delivered near yearend, and the others will follow in 6-week intervals. The packages will comprise conventional drilling derricks, drillstring compensation equipment, pipe-handling equipment, top drives, and marine riser tensioners. They will be fitted on Amethyst 2, 3, 4, 5, 6, and 7 production semisubmersibles, ordered by Petrobras for use in the Campos basin off Brazil (OGJ, Apr. 13, 1998, p. 38).

Pipelines

Pembina Pipeline Income Fund, Calgary, completed expansion of its condensate gathering system in central Alberta. The expansion adds 10,000 b/d of capacity to the system, which moved 15,000 b/d in 1997. That volume is forecast to increase to 21,000 b/d in 1998.

Interprovincial Pipe Line Inc.
(IPL), Calgary, reached a long-term tolling agreement with Alberta crude oil producers that will increase prospects of approval for a $1.4 billion (Canadian) pipeline expansion to Chicago. IPL agreed with the Canadian Association of Petroleum Producers (CAPP) to increase fixed tolls by no more than 3.5%, or 5¢/bbl, for 15 years. CAPP said the agreement provides IPL an incentive to lower operating costs over the term of the agreement. IPL plans capacity increases of 95,000 b/d in January 1999 and 170,000 b/d late in 1999. Additional expansions will add 350,000 b/d by the end of 2001.

Exploration

A group led by a unit of Repsol SA drilled a significant oil discovery on a producing block in eastern Venezuela, reported Mobil Corp., whose Ampolex Venezuela Inc. unit holds an interest in the block. Operator Astra Produccion Petrolera SA's discovery well TAG 12 E flowed oil from three zones at a combined rate of 16,000 b/d through chokes of 1/2-3/4 in. The strike lies on Quiamare-La Ceiba block, which produces 15,000 b/d. Interests are held 25% each by: Astra Produccion, a unit of Repsol's Argentine firm Astra Capsa; Ampolex; Chile's Sipetrol SA; and Tecpetrol SA.

Apache Corp.
gauged hefty flows from two zones in its Caribou 1 gas/condensate discovery in the Dampier subbasin of the Carnarvon basin off northern Western Australia. The lower zone was tested on a sole-risk wildcat basis by Apache and Global Exploration Inc. and flowed 16.7 MMcfd of gas and 681 b/d of 49° gravity condensate through a 1-in. choke from North Rankin pay at 10,639-678 ft. The upper zone, which confirmed last year's Reindeer 1 strike 2 miles north, flowed 35.2 MMcfd of gas and about 150 b/d of condensate through a 60/64-in. choke with 1,753 psi wellhead pressure from Legendre pay at 7,985-8,021 ft. Interests in the block are operator Apache 45%, Santos Ltd. 36%, and Global 19%.

Elf Aquitaine
and Romanian state oil company Petrom agreed to conduct seismic surveys and drill two exploration wells in 80-1,600 m of water in a 10,000 sq km area in the Black Sea off Romania, under a $15 million initial exploration program.

Snyder Oil Corp.,
Fort Worth and Houston, found gas and condensate on Main Pass Block 260 in the Gulf of Mexico. The Main Pass Block 260 No. 1 was drilled to 12,400 ft TD and cut 31 net ft of pay, discovering a new field in a lower Miocene sand between two producing fields in the same area. On test, the well flowed 25.8 MMcfd of gas and 2,745 b/d of condensate through a 28/64-in. choke with flowing pressure of 5,013 psi. The well was drilled in 314 ft of water.

Mobil Oil Canada Ltd.
and Compton Petroleum Corp. announced a joint exploration venture for natural gas on 250,000 acres in the High River/Mazeppa/ Nanton area of southern Alberta. Any commercial production would be processed at Compton's Mazeppa plants.

Canadian Occidental Petroleum Ltd.,
Calgary, will not explore on two blocks off southern Viet Nam. The company said Block 12 West was relinquished to the government, and it will sell Block 12 East to U.S. firm Opeco Inc. in a deal to close June 1. Terms of the block assignment were not disclosed. State-owned Petrovietnam said CanOxy drilled one test on each block and found traces of natural gas on only one block. Both blocks are just south of an area where a South Korean group confirmed a 1.2 tcf gas discovery on Block 11-2 of the Nam Con Son basin that is expected to produce 900 bcf over 20 years.

Companies

Occidental Petroleum Corp. completed deals valued at $376 million in its effort to divest or redeploy nonstrategic properties. The company completed the sale of certain onshore oil and gas properties in Louisiana and Mississippi to Petro-Hunt LLC, an affiliate of Petro-Hunt Corp., Dallas, for $194 million. Also completed were the sale of interests in Wyoming oil and gas fields and assets in Louisiana's Austin chalk trend to an affiliate of Petroleum Strategies Inc. (PSI) for $62 million and the sale of Oklahoma oil properties to Anadarko Petroleum Corp. for $120 million. These deals are part of Oxy transactions to date that will net it $4.5 billion, or 95% of its goal to fund purchase of Elk Hills oil field in California and to repurchase common stock. Union Pacific Resources Group Inc., Fort Worth, later agreed to pay PSI $59 million for certain of the Wyoming and Louisiana assets.

Mobil Oil Canada Ltd.,
Calgary, agreed with Irving Oil Ltd., Saint John, N.B., for sale of up to 18% of gas production from the Sable Offshore Energy Project. Irving will purchase up to 86 MMcfd, or 471 bcf under a 15-year contract. The gas will be marketed to Irving by Duke Energy Marketing LP, a unit of Duke Energy.

Tarragon Oil & Gas Ltd.,
Calgary, will purchase western Canada assets from Unocal Canada Ltd. for $309 million (Canadian). The purchase includes 21 million Tarragon shares and a $100 million debenture. Unocal has a 27% interest in Tarragon.

Canadian 88 Energy Corp.,
Calgary, paid $45 million (Canadian) to Talisman Energy Ltd. for oil and gas assets near Rocky Mountain House in west-central Alberta. The purchase includes production of 10 MMcfd of gas and 200 b/d of oil. The deal also gives Canadian 88 a 12.5% interest in the Strachan gas plant operated by Gulf Canada Resources Ltd.

Chauvco Resources International Ltd.,
Calgary, is taking a $16.4 million (Canadian) writedown of assets for the first quarter due to revision of reserves estimates in Gabon. The company said an independent analysis indicated its working interest share of proven reserves should be cut to 904,000 bbl. Production levels from Remboue field declined to 2,700 b/d from more than 10,000 b/d. Chauvco is looking for a joint-venture partner to help realize value on its Gabon acreage. Chauvco was acquired in December 1997 by Pioneer Natural Resources Co., Dallas.

Unocal Corp.'s
Spirit Energy 76 unit acquired an additional 9.2% working interest in Van field in Van Zandt County, Tex., from Shell Western Exploration & Production Inc. The acquisition raises operator Spirit Energy 76's average working interest in the five units comprising Van field to 91% and adds nearly 1.4 million boe to Spirit Energy 76's total potential resource. The acquisition includes more than 1.2 million boe in proved reserves.

Precision Drilling Corp.,
Calgary, disclosed a $46 million takeover bid for Inter-Tech Drilling Solutions Ltd. The deal is expected to close in June. Precision recently completed the acquisition of Northland Energy Corp., Calgary, a specialist in underbalanced drilling.

Refining

Phillips Petroleum Co. will install a 36,000-b/d continuous catalyst regeneration reformer at its Sweeny, Tex., refinery. Start-up is set for mid-2000. The catalytic reformer will improve refining margins by increasing yield of higher-value aromatics, with only a small reduction in motor fuel production. The project will also result in increased supply of hydrogen, which will be used for a new coker planned for completion at Sweeny in 2000.

M.W. Kellogg Co.
Houston, a unit of Dresser Industries Inc., signed an agreement with Exxon Research & Engineering Co. (ERE) to assist in marketing of hydroprocessing technology and in preparing process design packages for ERE-licensed units. This agreement covers these ERE technologies: Hydrofining for treating naphtha and distillate boiling-range streams; a diesel oil deep desulfurization process for cutting sulfur to very low levels; and GO-Fining and ResidFining processes for upgrading gas oils and residua for catalytic cracking and low-sulfur fuel oil.

LNG

Indonesia's Pertamina chartered its first membrane-type liquefied natural gas carrier, which will be built and supplied by Japan's NKK Corp., Mitsui OSK Lines Ltd., and Nusantara Shipping Ltd. NKK said the ship will have capacity to transport 22,500 cu m of LNG and is scheduled for delivery in October 2000. Pertamina has so far chartered only independent-sphere Moss-type LNG carriers. The new ship will carry LNG from Pertamina's Bontang export terminal to Hiroshima Gas Co. Ltd. and Nippon Gas Co. Ltd.

Amoco Power Resources Co.,
Repsol, Basque state energy firm EVE, and Spanish electric utility Iberdrola will study feasibility of a proposed 2.7 billion cu m/year capacity LNG regasification plant and combined cycle power plant at Bilbao, Spain. The consortium will form two project companies to complete separate studies on the LNG terminal and on the power plant. The 1,150-MW power complex, comprising several trains, will consume 1.7 billion cu m/year of regasified LNG, with the balance being dedicated to Spain's natural gas transmission system.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.