INDUSTRY BRIEFS

Gas distribution

BG plc offered $75 million to Perez Companc for its 25% stake in Gas Argentino SA. Gas Argentino controls Metrogas, the gas distributor in Buenos Aires. The deal will close only if two other shareholders, Astra Capsa and Argentina Private Development Co., do not exercise options to increase their stakes in Metrogas. BG already holds a 41% stake in Gas Argentino and a 5.5% share of Metrogas. The deal would give BG a 52.1% interest in Metrogas, of which it became technical operator in 1992.

Pipelines

Total acquired a 10% stake in Gasoducto GasAndes SA, the consortium that owns and operates a 24-in., 465-km natural gas pipeline from Argentina's Neuquen basin to the Santiago, Chile, area (OGJ, Apr. 21, 1997, p. 61). Other interests in the group are now: Nova Gas International 46.5%, Cia. General de Combustibles 17.5%, Metrogas 13%, and Chilgener 13%. The line has a capacity of 315 MMcfd, but plans call for increasing capacity gradually to 700 MMcfd.

Williams Cos. Inc.'s
Transco unit is holding an open season through Aug. 24 for annual firm transportation service for its SouthCoast expansion, from Station 85 in Alabama to mainline delivery points in Alabama and Georgia. Shippers on the Cumberland Gas Pipeline-an interstate pipeline proposed by affiliates of Williams and AGL Resources Inc. that would interconnect with Transco-could use the added capacity.

Norway's Statoil AS
reported that laying of the Europipe II gas trunk line was suspended after the Solitaire laybarge dropped the line to the seabed in bad weather. A total of 1.5 km of the line had been laid by Allseas Marine Contractors SA, Chatel-St. Denis, Switz., when the pipeline broke in 40 m of water in the Danish North Sea. The accident damaged the laying machinery, but nobody was injured. The vessel sailed to Stavanger for repairs and is expected to resume work this month.

Canada's National Energy Board
approved plans by a unit of Alberta Energy Co., Calgary, for a 71.4-mile gas pipeline in southern Alberta and Saskatchewan. The line will originate near Medicine Hat, Alta., and interconnect with the TransCanada PipeLines system near Burstall, Sask. The 175 MMcfd, $22.8 million (Canadian) line is scheduled to be in service this November.

Drilling-production

Coplex Resources NL, Tasmania, advanced its development plans for Rubiales oil field in Colombia. Coplex will upgrade Rubiales crude using Canadian technology. The firm is awaiting upgrade test results before project economics can be finalized. Meanwhile, Oleoducto Central SA, operator of Colombia's Ocensa export pipeline, will allow Coplex access to 100,000 b/d of excess capacity, provided the crude meets pipeline specifications. And an unnamed international pipeline firm operating in Colombia reportedly submitted a proposal to build, own, and operate a pipeline to take Rubiales crude to the Ocensa line.

Production at Hibernia
oil field off Newfoundland was temporarily halted July 31 by an electrical problem aboard the tanker Kometik, which prevented the tanker from taking on a load of crude. Repairs were to be completed within 2 days aboard the 850,000-bbl capacity vessel. Before production was halted, Hibernia had been producing about 80,000 b/d from three wells, and the platform had reached maximum storage capacity of 1.3 million bbl.

PerminTracer Petroleum Ltd.,
a unit of Tracer Petroleum Corp., Vancouver, B.C., spudded the Ngurit-2 appraisal well on the North Tanjung production-sharing contract area off Kalimantan, Indonesia, to confirm its gas discovery there. Operator and 100% interest holder PerminTracer plans to drill to 3,050 ft TD into lower Tanjung sands-the same pay in which Ngurit-1 found sweet, high-quality gas.

Spills

Mobil Producing Nigeria Ltd. is implementing new measures for handling oil spills. Mobil plans a new round of compensation to more than 200,000 Nigerian fishermen who claimed loss of income following a spill from its Idoho production platform in the Akwa Ibom area of southeastern Nigeria (OGJ, Feb. 2, 1998, p. 38). An independent assessor has estimated damages from the spill at $60 million.

Companies

Universal Resources Corp., a subsidiary of Questar Corp., Salt Lake City, agreed to acquire 100% of the common stock of HSRTW Inc., a unit of HS Resources Inc., San Francisco, for $157.5 million. Universal Resources will obtain about 150 bcfe of oil and gas reserves in Oklahoma, Texas, Arkansas, and Louisiana. The reserves are about 80% gas and about 90% proved developed. Universal Resources will receive another 50 bcfe of probable and possible reserves. The acquired properties produce about 32 MMcfd of gas and 870 b/d of oil.

Union Pacific Fuels Inc.
(UPFI), a unit of Union Pacific Resources Group Inc., Fort Worth, agreed with subsidiaries of Koch Industries Inc., Wichita, to exchange certain natural gas and liquids assets in East Texas and southern Lousiana. Koch will receive a portion of UPFI's interest in the Panola Pipeline from Carthage, Tex., to Mont Belvieu, Tex.; UPFI's interest in the Mont Belvieu I fractionator; and UPFI's interests in the Patterson and Calumet gas plants in Louisiana. UPFI will receive certain Koch gas gathering systems in East Texas and Koch's Longview and East Texas gas plants.

Marketing

Indian Oil Co. Ltd. (IOC) signed a memorandum of understanding with Essar Oil Ltd. to distribute for 10 years the products from the 180,000 b/d refinery Essar is building at Jamnagar, Gujarat. The plant is expected to start up by yearend. IOC is also negotiating with Reliance Industries Ltd. to market the output of an 18 million metric ton/year polymers plant Reliance is building at Jamnagar. The plant is also expected on stream by yearend.

Engen Ltd.,
Cape Town, formed a joint venture with Petrofina SA, Brussels, to operate a products marketing and distribution network in Congo (formerly Zaire). Engen expects to supply fuel from its Durban refinery via its distribution grids in transit territories. In separate deals, Engen bought the marketing and distribution businesses of Petrofina and BP Oil Ltd. in Rwanda and Burundi, where the two firms are partners. The moves are expected to give Engen a 30% share in the Congo market, and 25% and 30% shares in the markets of Rwanda and Burundi, respectively.

Exploration

Statoil began a seismic survey of potential drill sites on its Fylla license off Greenland with a view to drilling a wildcat in 1999. In addition to seismic data, the Geoscanner survey ship will collect soil samples. The survey is to take 3 weeks and is mainly intended to ensure that no shallow gas pockets exist at the prospective drill sites.

Santa Fe Energy Resources Inc.,
Houston, signed a production-sharing contract with Malaysian state firm Petronas for offshore Block PM 308. Interests in the block, off the eastern coast of peninsular Malaysia, are operator Santa Fe Energy 80% and Petronas Cariga* Sdn. Bhd. 20%. The two firms have the right to develop Rhu field, a potentially commercial 1992 discovery on the block. Rhu requires additional appraisal work. Santa Fe and Petronas Cariga* plan at least one additional well to bring this field on production.

Genoil Inc.,
Calgary, acquired operatorship and a 70% interest in southern Cuba's Block 22 from 100% owner MacDonald Oil Exploration Ltd., Calgary, for $700,000. Genoil will acquire additional seismic and drill a well in first half 1999. Genoil also sold its 30% interests in offshore Blocks 5, 6, and 7 to an unnamed firm for $10 million. As part of that sale, Genoil terminated Vancouver, B.C.-based St. Genevieve Resources Ltd.'s (SGV) 5% option and agreed to farm out 10% interests in Blocks 19 and 20 to SGV-reducing Genoil's interest to 72.5%-in exchange for paying 10% of incurred costs.

Tornado Resources Ltd.
and Mobil Canada Ltd., both of Calgary, will jointly explore 47 sections of land near Enchant, Alta. The majority of the acreage was obtained by Tornado in a farmout from PanCanadian Petroleum Ltd., also of Calgary. Mobil and Tornado will acquire 3D seismic data covering 231/2 sections and drill four exploration wells to satisfy the farmout agreement.

Canadian Occidental Petroleum Ltd.
received approval from Nigeria to acquire a farmout of a 20% interest in five blocks from Elf Petroleum Nigeria Ltd. As part of the deal, CanOxy will participate in drilling five exploration wells-four offshore and one onshore. Two blocks, Oil Prospect Licenses 222 and 223, comprise 700,000 acres and are in water depths of 650-3,300 ft in an underexplored area off the Niger Delta. The onshore blocks comprise 1.9 million acres and are in Nigeria's relatively unpopulated northeastern area.

Europa Oil Gas Ltd.,
London, agreed with the Ukrainian State Committee of Geology and its L'viv-area branch, Zahidukrgeologia, to jointly develop Veliki-Mosty and North Yavorivska-two gas fields in western Ukraine. The projects will boost gas production in Ukraine, which is largely dependent on Russian gas imports. First commercial production is planned for 1999, and combined peak output is anticipated to be as much as 46.6 MMcfd. Veliki-Mosty, 70 km north of L'viv, is a Devonian sandstone reservoir; North Yavorivska, 50 km northwest of L'viv, is a shallow gas deposit in Miocene Carpathian Foredeep sands.

Apache Corp.,
Houston, disclosed a gas/condensate find on Harriet production license TL-1 off Western Australia. The Rose-1 new-pool wildcat was drilled to 8,669 ft TD and flowed on test at a combined rate of 89 MMcfd of gas and 3,100 b/d of condensate from three zones. Rose is expected to be developed next year, while an appraisal well in Rose and a new-pool wildcat on nearby Lee prospect are planned this year. Interests in TL-1 are operator Apache 47.5%, Kufpec Australia 19.3%, Novus Petroleum Ltd. 12.5%, Tap Oil 12.2%, Hardy Oil & Gas plc 8.4%, and New World Oil & Developments 0.1%.

Total
farmed out 25% interests in the Gaitanas license area in Colombia's Upper Magdalena Valley to Emerald Energy plc, Epsom, U.K., and Monument Oil & Gas plc, London. The area is adjacent to Emerald's Matambo block, where it is drilling Gigante-1a well to test an oil target. In return for the interests, Emerald and Monument are funding the acquisition of 175 line-km of 2D seismic in the area by December 1999, and the drilling of the first well into any new prospect identified by the survey.

Refining

Showa Shell Sekiyu KK will close its 36,700 b/d refinery at Niigata, Japan, as part of its refinery restructuring program (OGJ, June 8, 1998, p. 30). Shell will convert the refinery to a base for importing petroleum products from Singapore, China, and South Korea. Project completion is slated for March 1999 or later. The refinery's 200 employees will be transferred to other Showa Shell refineries. Shell will incur a loss of about ?4 billion to dispose of the plant but will cover the charge with the sale of idle assets.

Qatar's National Oil Development Co.
(Nodco) let a $686 million contract to a group led by Lurgi AG, Frankfurt, and LG International Corp., Seoul, for expansion of Nodco's 57,500 b/d refinery at Umm Said, Qatar. The project will include a 28,000 b/d resid fluid catalytic cracking unit and a 65,000 b/d two-train condensate splitter. The expansion, expected to take 3 years, will boost refinery capacity to 137,000 b/d. Nodco is arranging a 100% financing scheme with a banking group led by Barclay's of the U.K.; it is expected to be signed in October. The funds will be secured through the sale of products from the expansion. Offtake agreements are being arranged by LG Corp. and Japan's Mitsui Co.

Mangalore Refineries & Petrochemicals Ltd.
(MRPL) is negotiating with Middle East oil producers for a crude supply agreement in return for an equity stake in its refinery. The cash-strapped MRPL is expanding the refinery it is constructing at Mangalore, India, to 180,000 b/d from the 60,000 b/d initially planned. Cost of the expansion is $870 million. Sources say leading Persian Gulf oil companies such as Kuwait Petroleum Corp., Saudi Aramco, and Oman Oil Co. are negotiating with Indian public-sector oil companies Indian Oil Co. Ltd. and Hindustan Petroleum Corp. Ltd. for similar equity-linked crude supply agreements.

Total
and Energy Biosystems Corp., Houston, have signed an agreement to expand their collaboration on diesel oil biodesulfurization. The French major has been testing the biocatalytic desulfurization process developed by Energy Biosystems on its own middle distillates (OGJ, Apr. 3, 1995, p. 39). Total says the process enables desulfurization at ambient temperature, instead of at high temperature as in hydrotreating, to produce lower refinery CO₂ emissions and improved product quality. Total will start building a pilot plant in 1999 and is studying the plant's design parameters.

Petrochemicals

Mobil Chemical Co. and Petroqu!mica de Venezuela SA (Pequiven) let contract to Brown & Root Engineering & Construction, Houston, to provide technology, basic engineering, and procurement for a 1 million metric ton/year ethylene unit being built as part of a major new petrochemicals complex at Jose, Venezuela. Contract value is $5 million. The unit will use technology licensed jointly by Brown & Root and Kinetics Technology International BV. Fluor Daniel Inc. is performing the balance of the engineering work for the complex (OGJ, June 29, 1998, p. 41).

Oilsands

A fire in a conveyor belt's power station July 30 slowed production at the Suncor Energy Inc. oilsands mine near Fort McMurray, Alta. The fire was put out within 45 min, and no one was hurt, but the mine's two main conveyor belts were not working at presstime; production of syncrude continued with stored bitumen. The fire's cause is unknown.