Industry Briefs

Spills

Mobil Producing Nigeria said that 90% of the oil spilled as a result of a pipeline rupture off Nigeria late last month had evaporated or dispersed naturally. A rupture in the pipeline connecting the Idoho production area to the Qua Iboe export terminal in southeastern Nigeria caused a 40,000 bbl oil spill last month. Clean-up of the shoreline is under way, and environmental officials found no significant contamination in the region. Mobil said it will compensate people and communities affected. The pipeline's closure has reduced Mobil's 700,000 b/d Nigerian oil output by 100,000 b/d.

Two oil spills
in the Gulf of Mexico off Texas were being cleaned up at presstime. The U.S. Coast Guard sealed a hole in one tank of the Gibraltar-flagged Seagull tanker, which had leaked 460 bbl of oil south of Galveston after the unexplained loss of a 1-in. docking plug. Separately, workers had mopped up the remnants of a 2,500 bbl spill from a rupture in the High Island pipeline system operated by Amoco Corp. Texas officials say wind and wave action are breaking up the resulting 4-mile-long oil slick 50 miles south of Galveston and that no oil is expected to reach land. Investigations were under way at presstime to determine the causes of both spills.

Oilsands

Suncor Energy Inc. let contract to the Conoco-Bechtel Coker Technology Alliance for its Project Millennium, a $2.2 billion oilsands project expansion at Fort McMurray, Alta. The program will increase light crude oil production to 210,000 b/d from 85,000 b/d by 2002. With a capacity of 100,000 b/d of fresh bitumen feed, the new unit will be one of the largest cokers in North America, Suncor claims.

Drilling-production

Oryx Energy Co., Marathon Oil Co., and Murphy Oil Co. Ltd. entered into a 5-year contract for a Noble Drilling deepwater semisubmersible rig, rated to 6,000 ft of water. Delivery is slated for second quarter 1999. In a separate deal, Oryx plans a 5-year contract with Statoil for 50% use of a newly built drillship rated for water depths to 7,500 ft, beginning late in 1999. Oryx also secured a 6-month contract for Diamond Offshore Drilling Inc.'s Ocean Lexington semi, rated for water depths to 2,200 ft. The rig will drill Oryx's Legacy prospect on Mississippi Canyon Block 29 and begin Phase II development drilling in Neptune field in Viosca Knoll.

State-owned Sakhalin Energia
and Rosneft-Sakhalinmorneftegaz, a group of western and Japanese companies, signed a $12.8 million contract for delineation drilling in Piltun-Astokh field on the continental shelf off Sakhalin Island. Drilling will commence this summer.

Rosshelf,
a Russian joint-stock company owned 51% by Gazprom, claims reserves in the country's Prirazlomnoye oil field in the eastern sector of the Barents Sea are closer to 100 million metric tons than to previous estimates of 65 million tons. Rosshelf said a 60,000-ton ice-resistant drilling platform being built at Severodvinsk, Russia, will be used for delineating the field.

Tesoro E&P Co. LP,
a unit of Tesoro Petrolum Corp., San Antonio, completed the 8 Gonzalez well in the Wilcox trend of Webb County, Tex. The well tested at a rate of 33.7 MMcfd from L-1 sand. When Tesoro purchased its 100% interest in the Gonzalez unit for $3.2 million, the unit had two wells producing 1.8 million MMcfd and three shut-in wells. Development began late in 1996 and included drilling the 7 Gonzales exploratory well and the 8 Gonzales development well and the recompletion of one well.

Transocean Offshore Inc.'s
dynamically positioned drillship Discoverer Enterprise was damaged after being torn from its moorings during a storm late last month at the Astilleros Espa?oles shipyard at Ferrol, Spain. The hull, which ran aground, was refloated and returned to its berth at the shipyard. The drillship is under contract to Amoco Corp. for deepwater drilling in the Gulf of Mexico until 2003, with delivery due in mid-1998. Meanwhile, Unocal Corp. signed a 5-year contract for Transocean's planned $318 million Discoverer Enterprise-class drillship, rated for water depths to 10,000 ft.

Companies

Union Texas Petroleum Holdings Inc. Houston, acquired Occidental Petroleum Corp.'s. Venezuelan unit Cia. Occidental de Hidrocarburos Inc. (COH) for $204.5 million. COH operates the 1 million-acre Desarrollo Zulia Occidental (DZO) block. The oil field development project, west of Lake Maracaibo, is under an operating service contract with Petroleos de Venezuela SA. DZO is estimated to have 190 million bbl of oil reserves. The block produces about 23,000 b/d of oil from 50 wells in eight fields. Union Texas development plans include spending $400-450 million in 9 years.

BP Exploration Operating Co. Ltd.
let a £35 million ($56 million) contract to Bond Helicopters Ltd., Aberdeen, for use of two new-design helicopters for 5 years. From September, Bond will deploy the two new Eurocopter Mk. 2 Super Pumas, mainly on longer flights from Aberdeen to BP's West of Shetland area fields and North Sea Bruce field.

Apache Corp.
agreed to swap its 86% working interest in West Texas' Cogdell Canyon Reef unit to Altura Energy Ltd. for that company's interests in the New Mexico Federal and Drinkard units of Lea County, N.M. Apache will gain reserves of 18.2 million boe. Altura, a joint business unit of Amoco Corp. and Shell Oil Co., estimates implementation of a CO2 flood in the unit could yield more than 30 million boe in incremental reserves. Current net production of 1,200 b/d is estimated to increase to 10,000 b/d with CO2 flooding.

Patterson Energy Inc.,
Houston, will acquire Robertson Onshore Drilling Co., Dallas, for $30 million cash and $10 million in shares of Patterson common stock. Robertson has 15 drilling rigs-10 working in East Texas and five in Mississippi-and a yard in Liberty City, Tex. Patterson claims this acquisition will boost its fleet to 114 land drilling rigs, making it the third largest provider of onshore contract drilling services in the U.S.

Forest Oil Corp.,
Denver, will issue 6.17 million shares of common stock to Anschutz Corp. for certain U.S. oil and gas assets, all of its undeveloped Canadian acreage, and 10 undeveloped international concessions. Included are four producing oil and gas fields in Utah and Wyoming with net proved developed reserves of 7.1 million bbl of hydrocarbon liquids and 48 bcf of gas. Anschutz also has 170,000 net acres of undeveloped Canadian land and will contribute 10 international concessions covering 11 million net acres. After the transaction, Anschutz will hold about 40% of Forest's outstanding shares.

BG Exploration & Production Ltd.
agreed to supply 275 bcf of gas from its U.K. portfolio over 15 years to Enfield Energy Centre Ltd (EECL). North London-based EECL is a 50-50 joint venture of independent power provider Indeck and the NRG unit of U.S. utility Northern States Power. The venture is building a 396-MW combined-cycle gas turbine power plant at Brimsdown, North London, which is due to begin operation in fourth quarter 1999.

ARCO British Ltd.
exchanged interests in acreage adjacent to U.K. North Sea Gawain field with Mobil Oil Corp. affiliate Superior Oil (U.K.) Ltd. ARCO acquired a 50% working interest in Block 49/29a, to the southeast of Gawain, in exchange for a 50% working interest in Block 49/24, which lies to the northwest of Gawain.

Russia's Gazprom
plans to increase annual output for the next 3 years, Deputy CEO Pyotr Rodionov said. He said 1997 production would be 533 billion cu m (bcm), rising to 548 bcm in 1998, 550 bcm in 1999, and 563 bcm in 2000. Gazprom also announced plans to raise $9-12 billion during 1998-2000.

Safety

U.K. Health and Safety Executive (HSE) published guidance on design, construction, operation, and maintenance of installations for storage of flammable liquids in fixed tanks. The booklet is aimed at managers and supervisors of new and existing installations and helps in assessment of risks and determination of methods to control risks. The booklet includes advice on compliance with legislation for storage of flammable liquids and LPG.

Refining

Middle East Oil Refinery (Midor), composed of Egyptian group H. Salem 40%, Israe* investment group Merhav 40%, and state oil company Egypt General Petroleum Corp. 20%, will use the jointly owned Conoco-Bechtel delayed coking technology for a 22,800 b/d coker (OGJ, July 14, 1997, p. 28). Midor will use the technology at its $1.2 billion 100,000 b/d refinery, under construction at Alexandria. The refinery is scheduled to start up in 2000.

Petrochemia Plock SA,
Poland, started up what it claims is Europe's largest hydrocracking unit at its Plock, Poland, refinery. The 55,000 b/sd unit uses the Unicracking process, licensed by UOP LLC, Des Plaines, Ill. The unit will partially convert vacuum gas oils to distillate products.

Concord Oil & Petrochemicals Holdings China Ltd.
licensed UOP's reduced-crude conversion technology to process 45,100 b/sd of untreated or hydrotreated atmospheric residue at Concord's refinery at Ningbo, Zhejiang, China. The unit is scheduled for operation in late 2000. The technology features elevated Optimix distributors, lift gas, VSS riser termination system, two-stage regeneration, catalyst coolers, and UOP's selective recycle scheme to maximize light olefins.

Exports-imports

Ukraine abolished its 20% value added tax (VAT) on gas imports. The State Oil and Gas Committee said the decision to drop the VAT on gas imports for all industrial consumers could lead to price cuts in a sector heavily dependent on gas.

Petrochemicals

Esso (Thailand) Public Co. Ltd., an affiliate of Exxon Corp., finalized plans to invest about $400 million in a major aromatics plant at its Sri Racha refinery on the east coast of Thailand. The plant will be fully integrated with the refinery and produce 770 million lb/year of paraxylene. Construction will be completed in 1999.

Equistar Chemicals LP,
a joint venture of Lyondell Petrochemical Co. and Millennium Chemicals Inc., let contract to Bechtel Corp., Houston, for expansion of its high-density polyethylene plant at Matagorda, Tex. Bechtel will provide engineering, construction, and procurement services on the 480 million lb/year expansion. Start-up is slated for third quarter 1999.

Pipelines
European Fund for Regional Development will provide financial assistance of 62.9 million ecu (10.2 billion pesetas) to Spain's Repsol SA for the construction of the 350-km Cartagena-Puertollano pipeline. The oil pipeline is planned to be on line late in 1999. Total investment is estimated at 26 billion pesetas. The project will produce a threefold increase in the amount of oil unloaded at the Cartagena terminal and supply both the Cartagena refinery and Puertollano industrial complex.

U.S. Department of Transportation's
Research and Special Programs Administration (RSPA) assessed 1998 user fees at $67.98/mile for gas transmission pipelines and $59.59/mile for hazardous liquids pipelines. Hazardous liquids pipelines will fund 45% of general program costs and gas lines 55%. Meanwhile, a shift in RSPA resources to the hazardous liquids program shows assessments for oil lines have doubled since 1990.

Exploration

Gulf Canada Resources Ltd., Denver, and Roc Oil Co. Ltd., Australia, acquired interests in the East Gobi basin in southeast Mongolia. The companies purchased Nescor Energy Co. for $14.25 million, with Gulf taking a 75% share and Roc 25%. The acquisition includes 6 million bbl of proved oil reserves and 6.5 million acres in Tsagaan Els oil field. Gulf Canada is planning to lease another 10 million acres on contiguous blocks. The partners will begin producing from existing wells and will drill development wells in the second quarter. Oil will be moved to the Chinese border by rail and sold to Sinochem International Oil.

Tullow Pakistan Development Ltd.
of Ireland and Pakistan's Government Holdings were granted an exploration license from the Pakistan government in the Mirpurkhas Sindh province, Nawabshah Khairpur district. As operator of the 7,401 sq km Nawabshah Block No. 2568-2, Tullow will conduct a 100 line-km seismic survey and drill an exploratory well during the contract's initial 3-year period. The company estimates exploration costs at $4.2 million.

Canadian Occidental Petroleum Australia Ltd.
acquired from BHP Petroleum Pty. Ltd. half of BHP's 100% interest in WA-260-P exploration permit and Buffalo oil discovery in the Bonaparte basin off Northwest Australia. BHP retains operatorship. BHP said the farmout deal commits CanOxy to a specified level of future exploration expenditure and of field development costs for Buffalo. The farmout does not include the nearby Laminaria East extension of Laminaria oil field, currently under development. BHP aims to seek board approval this year for a plan to develop Buffalo.

Oryx Energy Co.,
Dallas, cut 110 ft of net pay in one of three zones found by its Yuralpa discovery well on Block 21 in Ecuador's Oriente basin. Operator Oryx 50% will drill two additional wells on the Yuralpa structure this year to establish commerciality. The well hit oil-bearing sands in three zones at 6,400-7,400 ft. The company is attempting to test the main Cretaceous Hollin horizon and may test two additional zones.

Power

Tornado Resources Ltd., Calgary, signed a memorandum of understanding with Tanzania for development of natural gas to be used in a $32.5 million power project in southern Tanzania. The Mnazi Bay project involves development of the 500 bcf Mnazi Bay field, construction of a pipeline, and power generation for the town of Mtwara and other centers.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.