Nov. 2, 1998
BP Oil International Ltd.


BP Oil International Ltd. was fined for manipulating the price of Brent crude in trading on London's International Petroleum Exchange (IPE). While describing the case as "very embarrassing," BP said the four staffers involved were not aware that they had done wrong, adding that there was "no question of personal gain." The misdemeanor, related to IPE's July 1998 Brent crude futures contract, occurred near closing May 18, when a BP trader made a false cross trade reducing the price of July Brent crude by 1¢/bbl, to BP's benefit. BP was fined £125,000 total for the incident, paying IPE an additional £16,760 to cover the exchange's costs. The staffers were reprimanded for misconduct; three of them were reassigned to other jobs.


South Africa's Petronet discovered a rupture in its 600-km refined products pipeline from Durban to Johannesburg that leaked 1,550 bbl of fuel oil onto farmland in South Africa's KwaZulu-Natal province. The sharp drop in pipeline pressure caused by the break prompted Petronet to shut down the line. The Department of Water Affairs is conducting tests in the area to determine potential contamination of nearby water sources.

Two tankers collided
near Bad Salzig, Germany, spilling the entire cargo of a Dutch tanker barge-about 1,200 bbl of gasoline-into the Rhine River. A German tanker's rudder jammed, causing the vessel to hit the Dutch tanker, slashing a 13 ft gash, 2 ft below the waterline. The collision disrupted river traffic for hours.


An explosion and fire killed seven contractor employees working on a Sonat Exploration Co.-owned rig in Bryceland, La., 45 miles east of Shreveport. The incident occurred as a natural gas well was being drilled, but, at presstime, the cause of the explosion was still undetermined. Of the dead, four worked for Cudd Well Control, Oklahoma City, and three for Key Energy Services, Kilgore, Tex.


Petroleum Syndicate plc, London, produced 15,000 b/d of first oil from its newly installed Seastar monohull tension-leg platform in Morpeth field in 1,700 ft of water in the Gulf of Mexico (OGJ, Aug. 24, 1998, p. 35). British-Borneo expects Morpeth TLP production to reach 35,000 b/d of oil and 36 MMcfd of gas. The company also intends to use Morpeth TLP as a hub processing facility.

Unocal Corp.
and PTT Exploration & Production plc reached a 50-50 joint venture agreement to build a $18 million petroleum service/supply base on the southern Songkhla coast of Thailand that will support oil and gas exploration and production off Thailand. The new base, which will replace current supply bases on Songkhla Lake, is scheduled to come on line by 2000.

Venture Production Ltd.,
Aberdeen, acquired a 55% interest in Brighton Marine field off Trinidad under a joint operating agreement with Trinidad and Tobago state oil firm Petrotrin Ltd. Venture said the 60 sq km field had original oil reserves of more than 500 million bbl and was developed with 9 platforms and more than 200 wells. Most of the wells are currently idle, and production stands at 350 b/d. The company plans to redevelop the field, with a view to increasing output to 15,000 b/d of oil. First new production is expected by early 1999.

China Offshore Oil Bohai Corp.
(Coobc) expects to produce 20,000 b/d of oil by 2004 through two oil fields being developed simultaneously in China's Bohai Bay. The project, estimated to cost 7.29 billion yuan, involves installing seven fixed platforms, laying two subsea pipelines, and building terminals at Jingtang port. The first field, Qinhuangdao 32-6, is 100 km east of Tanggu, Tianjin, and has 1.24 billion bbl of original oil in place. The second, Nanbao 35-2, is 20 km south of Tangshan, and has estimated OOIP of 803 million bbl.

Cabre Exploration (Cyprus) Ltd.'s
Rabeh 2 well in Egypt's West Esh El Mallaha region initially flowed 1,630 b/d of 28.4° gravity oil through a 1/2-in. choke with minimal water and gas. Afterward, the well was logged, cased, and tested through 50 ft of perforations in pre-Miocene Matulla sands, but the Calgary company did not disclose the latter flow rates. The well is 500 m from Naftex Energy Corp.'s Rabeh 1 discovery, which found structurally lower pay (OGJ, Mar. 23, 1998, p. 34).

Gas marketing

Mobil Oil Canada Ltd. agreed to sell the first natural gas to Nova Scotia buyers from the Sable Offshore Energy Project (OGJ, Oct. 19, 1998, p. 27). The company signed a 5-year contract with Duke Energy Marketing LP and Stora Port Hawkesbury Ltd., a pulp and paper mill operator, for 10.5 MMcfd of gas. Duke also will sell 1 MMcfd to CGC Inc., Port Hawkesbury, N.S. Sales will be 21 bcf over the contract term. Mobil now has Canadian sales commitments of more than 97 MMcfd, about 40% of Mobil's share of initial production from the fields off Nova Scotia. Deliveries are expected late in 1999 from Sable to markets in Canada and the U.S. Northeast.


Vitol SA Inc. unit North Atlantic Refining Ltd. bought the first shipment of 430,000 bbl of crude oil from Hibernia oil field off Newfoundland, which started up in November (OGJ, Oct. 26, 1998, p. 86). Petro-Canada, Norsk Hydro AS, and Canada Hibernia Holding Corp. (Ottawa's Hibernia holding) sold the shipment to the Come by Chance, Newf., refinery. The remaining 420,000 bbl aboard the shuttle tanker M/T Mattea was offloaded at Portland, Me., for pipeline delivery to Petro-Canada's Montreal refinery.


Saba/Koch consortium, composed of Wichita-based Koch Industries Inc. and Imasab SA de CV, controlled by Mexico City's Isaac Saba, agreed to buy Frankfurt-based Hoechst AG's majority holdings in its polyester fibers and resins business for an undisclosed amount. The new venture, KoSa, will be headquartered in Houston and have polyester capacity of 4 billion lb/year. The purchase is expected to close by mid-December.

IPL Energy,
New York, changed its name to Enbridge Inc. The Enbridge name will be applied to 20 company-owned businesses, including Interprovincial Pipe Line, over the next 18 months.

Portland, Ore., plans to divest some of its noncore investments over the next year. The company will divest its natural gas storage and marketing unit, TPC Corp.; its eastern U.S. electrity trading business, PacifiCorp Power Marketing; and its joint venture with Bechtel Enterprises, EnergyWorks. The company also plans to terminate energy development activities in Turkey and the Philippines. These divestments will result in job cuts in 1999.


ARCO Alaska Inc. and Anadarko Petroleum Corp. gauged a flow rate of 10.6 MMcfd of gas in its 1 Lone Creek Moquawkie discovery well through a 33/64-in. choke with 925 psi flowing tubing pressure from 53 ft of perforations at 2,400 ft (OGJ, Sept. 7, 1998, p. 28). The well is in 18s-12n-11w, in Alaska's Cook Inlet area, 40 miles west of Anchorage.

Medusa Oil & Gas,
a unit of Aberdeen-based Ramco Energy plc, and partner Moravske Naftove Doly AS (MND), the former Czech state oil company, plan to purchase more land and drill an exploration well in the Brezi-Mikulov license area, along the Czech-Austrian border. It is expected that the well, Brezi 3, will be drilled before yearend. Medusa and MND completed testing of the Krumvir 2 well in the Karlin license area of the Czech Republic earlier this year (OGJ, Feb. 16, 1998, p. 38).

Elf Aquitaine
unit Elf Congo and partners found oil in a third appraisal well in the Haute Mer deepwater area off the Congo. The well, drilled in 812 m of water, flowed on test 6,800 b/d from two Tertiary zones. Partners in the Haute Mer block include operator Elf 51%, Chevron Overseas Ltd. 30%, state firm Hydro Congo 15%, and Energy Africa Haute Mer Ltd., Cape Town, 4%.

Gas processing

A royal commission headed by Jeff Kennett, Premier of Australia's Victoria state, will investigate the September explosion and fire at Esso Australia Ltd./BHP Petroleum Pty. Ltd.'s Longford natural gas treating plant. It is estimated the inquiry will cost $2 million (Australian). The commission will probe possible cause of a September blast that killed two Esso employees and severed gas supplies to Victoria for almost 2 weeks (OGJ, Oct. 19, 1998, Newsletter). The inquiry will also look into a June ice blockage in a pipeline from Bass Strait fields to the plant that briefly disrupted supplies. Investigations are expected to be completed by February 1999.


Fina Oil & Chemical Co., Plano, Tex., let contract to Jacobs Engineering Group Inc. unit Jacobs Serete, Paris, for an undisclosed amount to provide basic engineering for a 380,000 ton/year polypropylene production line at its Feluy, Belgium, plant. The new line, the third at Feluy, is expected to come on line by yearend 2000.

Chevron Chemical Co. LLC
let a contract to Jacobs Engineering Group Inc. for the engineering and construction of a polyisobutylene train to its Oak Point Oronite additives plant at Belle Chasse, La. The $70 million expansion will increase capacity to 60,000 metric tons/year of highly reactive polyisobutylene.

Nova Corp.,
Calgary, and Huntsman Corp. agreed to exclude Huntsman's North American expandable polystyrene (EPS) assets from Nova's proposed acquisition of Huntsman's styrenics operations (OGJ, Aug. 3, 1998, p. 28). The deal, valued at $744 million (Canadian) plus working capital when announced July 21, will now exclude Huntsville EPS plants in Quebec and Illinois. A plant in France will remain part of the agreement. The companies said an agreement will close by yearend, subject to approval. The changes are being made to facilitate a U.S. Federal Trade Commission review of the deal.

Alternate fuels

BC International Inc., Dedham, Mass., completed a plant at Jennings, La., to convert sugar refinery waste into about 25 million gal/year of ethanol. The U.S. Department of Energy provided $11 million of the funds under a program to demonstrate production of ethanol from biomass resources.


PP&L Global Inc. unit PP&L Resources Inc., Allentown, Pa., plans to develop and construct a $250 million, 500-600-MW gas-fired power plant in eastern Pennsylvania, near Martins Creek. Expected to be in service by early 2002, the plant will be located near an existing generating station owned by PP&L Resources' electric utility subsidiary, PP&L Inc. The new power plant will serve as a merchant plant for the region.

El Paso Energy Corp.
unit El Paso Energy International Co., Houston, along with partners Ogden Energy Group and W?rtsila NSD North America Inc., started construction of a $120 million, 115-MW oil and gas-fired power plant at Haripur, Bangladesh. Under a 15-year power purchase agreement, the plant will sell power to the Bangladesh Power Development Board. The new plant, expected to be in service by May 1999, is the second private power plant to be build in Bangladesh.

Gas supply

Chevron Nigeria Ltd. and Nigeria National Petroleum Corp. (NNPC) signed a 20-year agreement with a consortium led by KMR Power to provide 40 MMcfd of natural gas for KMR's 220-MW power plant at Tema, Ghana. The agreement lays the groundwork for the construction of Chevron and NNPC's West African gas pipeline project, which will supply Nigerian gas to Ghana by late 2001. Until the pipeline is completed, oil will be used to generate the facility's electricity.

Russia's Gazprom
signed a 15-year, $10 billion deal to supply 283-318 bcf/year to the Czech-owned Transit gas pipeline beginning January 1999. Talks will continue on using part of the gas supplies to resolve Russia's $3 billion debt to the Czech Republic.


U.S. Minerals Management Service (MMS) and the Norwegian Petroleum Directorate (NPD) signed a memorandum of understanding outlining the exchange of information regarding offshore oil, gas, and mineral resources between the two organizations. This is the fifth year MMS and NPD have signed such an agreement.


Talisman Energy Inc., Calgary, drilled a gas appraisal well in Alberta's Lovett River area that flowed 17.4 MMcfd. In addition to the newly drilled Cordel well, the Lovett River pipeline project will double the company's gas sales from the central Alberta foothills area to 57 MMcfd from 24 MMcfd. Talisman's Lovett River step-out, in 3-1-47-19w5, was drilled to 14,235 ft-including a 2,348 ft horizontal open hole section in the Turner Valley.

Conoco (U.K.) Ltd.
let a £12 million contract to Coflexip Stena Offshore Ltd., Aberdeen, to install pipelines in 35 m of water in Europa gas field on North Sea Block 49/22. Europa is being developed with a minimum facilities platform tied back to the nearby Lincolnshire Offshore Gas Gathering System pipeline (OGJ, June 20, 1994, p. 31). Coflexip Stena will supply and install a 4.5-km, 12-in. pipeline and piggybacked 3-in. methanol line. The pipeline will be installed by the CSO Apache pipelay ship over 10 days during March-September 1999.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.