INDUSTRY BRIEFS

Export-Imports

Dragon Oil plc, Dublin, secured a crude oil swap deal with National Iranian Oil Co. (NIOC) to export oil produced in the Caspian Sea off Turkmenistan. Dragon is operator of LAM and Zhdanov fields on Block II, having taken over former operator Larmag Energy NV, Amsterdam. The fields produce 7,000 b/d of oil, and Dragon is working to boost output through redevelopment (OGJ, Jan. 30, 1995, p. 36). Under the crude swap agreement, Dragon will deliver Turkmen crude to NIOC at a Caspian Sea port in north Iran for equal quantities of Iranian light crude oil to be lifted from NIOC in the Persian Gulf.

Refining

India's Oil & Natural Gas Corp. (ONGC) and Hindustan Petroleum Corp. Ltd. (HPCL) have reached a deal under which ONGC will conduct corrosion tests, install safety systems, and train operators at HPCL's Visakhapatnam refinery. The 4.5 million metric ton/year plant was partially destroyed in a fire last September (OGJ, Sept. 22, 1997, p. 42). For the last 6 months, HPCL has been installing new equipment and renovating facilities. The refinery will restart when installation of safety equipment and personnel training are completed.

U.S. Environmental Protection Agency
reduced the record keeping and reporting requirements that refiners must meet under the National Emissions Standards for Hazardous Air Pollutants (Neshap). The rule does not reduce the overall compliance standards of Neshap, however. It will be effective May 19, unless objections are filed.

Petrochemicals

DuPont Co. and BASF AG selected Dongfang, China, as the manufacturing site for their joint venture to produce and sell nylon intermediates in Asia. The two companies are equal partners in the integrated nylon venture, which was announced in April 1996. Total investment in the joint venture is expected to be $900 million. A letter of intent was signed with China National Offshore Oil Co. to supply natural gas to the manufacturing facility. China is well along in its review of the joint venture application to form a wholly foreign-owned enterprise in China.

Drilling-production

Shell U.K. Exploration & Production produced first oil from U.K. North Sea Mallard field on Apr. 2. Mallard has estimated reserves of 25 million bbl of oil and 17 bcf of gas and is expected to produce 16,000 b/d of oil and 11 MMcfd of gas at peak. The field was developed as a satellite of Kittiwake platform 15 km away, with two subsea wells. Mallard lies in 280 ft of water on Block 21/19 and is a high-pressure, high-temperature field. Interest holders are Shell U.K. Ltd. 38%, Esso Exploration & Production U.K. Ltd. 38%, and Total Oil Marine plc 24%.

Elf Exploration Angola
signed a letter of intent with the Foramer SA unit of Pride International Inc., Houston, for the construction and operation of a second new ultradeepwater drillship to operate off Angola. The initial contract term is 3 years; the contract includes two optional 1-year extensions. Pride will collect revenues of about $200 million over the initial term. Pride agreed to form a joint venture with Angolan state oil company Sonangol, to construct, own, and operate the rig. Pride will hold 51% interest. Named the Pride Europe, the rig will be rated for water depths of 10,000 ft and will begin operations late in 1999.

Cabinda Gulf Oil Co. Ltd.,
a unit of Chevron Corp., let a $30 million contract to Global Industries Ltd., Lafayette, La., to install a platform and pipelines for Phase 1 of Banzala field development off Cabinda. Work will be completed in December. Global Industries will fabricate, transport, and install 27 miles of 8-in., 10-in., and 12-in. diameter pipeline in 128-208 ft of water with its Cheyenne pipelay derrick barge.

Elf Petroleum Nigeria Ltd.
and Mobil Producing Nigeria Ltd. are negotiating joint development of Amenam field about 37 km southeast of the Niger Delta, according to Nigeria National Petroleum Corp. (NNPC). The field straddles Elf's Oil Mining Lease (OML) 99 and Mobil's OML 70. Elf was selected as operator of the field because 80-90% of the estimated 400 million bbl of oil reserves fall within its license area. NNPC holds 60% participating interest in the Elf block.

Enron Oil & Gas Co.
confirmed a discovery on Eugene Island Block 135. The A-3 well was drilled to 19,542 ft TD and encountered three gas zones below 18,300 ft. Operator Enron said the well was completed in one of the three intervals and is producing 12.5 MMcfd of gas and 725 b/d of condensate through a 25/64-in. choke with flowing tubing pressure of 8,750 psi. Current gross production from the block is 38 MMcfd and 2,200 b/d. Interests are: Enron 50%, Seagull Energy Exploration & Production Inc. 20%, CXY Energy Offshore Inc. 15%, and Remington Oil & Gas Corp. 15%.

Sable Offshore Energy Project
(SOEP) scheduled two drilling rigs for exploration and development drilling off Sable Island. The Rowan Gorilla 2 jack up rig will be under contract for 2 years. The rig, now at Halifax, will drill an exploration test for PanCanadian Petroleum Ltd. on the Grand Pre prospect, 10 miles northeast of Cohasset/Panuke oil field. It is then scheduled to begin operations about June 15 at Venture field. The Galaxy 2 rig, under construction at Singapore for Santa Fe Drilling, is scheduled to arrive at Halifax in early October to begin drilling five development wells at Thebaud field and two development wells at the North Triumph location.

Pipelines

BP Exploration Co. (Colombia) Ltd. said it shut in 75,000 b/d of oil production at Cusiana and Cupiagua fields in Colombia after a terrorist attack on a pipeline leading into a pump station. Other participants in the fields are Total, Empresa Colombiana de Petroleos, and Triton Energy Ltd., which has said it may sell its stake.

Petroleos Mexicanos
let a $11.6 million contract to a unit of IPL Energy Inc., Calgary, to provide conceptual design and advisory services on modernization of Pemex's national crude oil and refined products pipeline system.

Dauphin Island Gathering Partners
let a pipeline installation contract to Houston-based TransCoastal Marine Services Inc. TransCoastal will install 9 miles of pipeline that will bring additional Gulf of Mexico gas onshore in Alabama. Five vessels from TransCoastal's marine construction fleet will be deployed to lay and bury the 24-in. pipe, beginning at a platform on Alabama Block 73 and connecting with an onshore pipeline section in Coden, Ala. The project is part of a system expansion that will add an estimated 500 MMcfd of capacity to the Dauphin Island Gathering Partners system.

India Gas Corp.
will head a consortium comprising Brown & Root International Inc., Shell Co. of India Ltd., and Cairn Energy plc to construct and operate a $2.5 billion gas pipeline to transport 28 million cu m/year of gas from Myanmar to the southern part of India. India Gas Corp. will hold a 50% share, with the remainder divided among the consortium members.

Northern Border Pipeline Co.
let contract to Willbros Group Inc., Tulsa, to construct a 94-mile, 36-in. pipeline from Harper, Iowa, to Davenport, Iowa. Work on the $25 million line will begin in the second quarter, with completion set for yearend.

Cumberland Gas Pipeline Co.,
Houston, a partnership of Williams Cos. and AGL Resources Inc., announced an open season during Mar. 30-May 29, 1998, for firm transportation capacity on its planned pipeline from the Transco main line in Walton County, Ga., to Atlanta Gas Light Co.'s interconnect with East Tennessee Natural Gas Co. in Catoosa County, Ga. About 220,000 dekatherms/day will be available at 19¢/dekatherm. The 141-mile Cumberland Pipeline will use existing pipeline infrastructure by combining the 27-mile Suwanee lateral on Williams' Transco pipeline and Atlanta Gas Light Co.'s 102-mile main line. The line is expected to be in service on Nov. 1, 2000.

Exploration

Canadian Occidental Petroleum Ltd., Calgary, will acquire Kerr-McGee Yemen Ltd.'s two exploration blocks in eastern Yemen. CanOxy will acquire a 47.5% interest in Block 50 and a 43.75% interest in Block 51. Kerr-McGee will have an equal interest, with the balance held by an affiliate of the Yemen oil ministry. Block 51 covers 2 million acres and is next to the western boundary of CanOxy-operated Masila block. Two exploration wells and 200 miles of seismic are planned on Block 51 in the western Saar basin in 1998. A 470-mile seismic program is planned on Block 50, which covers more than 8 million acres northwest of the Masila block.

Gulf Canada Resources Ltd.,
Denver, received a 3-year exploration permit on an 800,000-acre block 90 km south of Saint-Pierre and Miquelon islands off the Canadian east coast. The French republic granted the permit in a 5.4 million-acre exploration block that has been under an exploration moratorium since the 1960s. The remaining 4.6 million acres are under the jurisdiction of Newfoundland and Nova Scotia. Acquisition of 6,500 km of 2D seismic in the permit area is set for the summer. Drilling is expected in 2000. Gulf holds a 100% interest in the block.

Companies

Halliburton Energy Development, a business unit of the Halliburton Co., is negotiating with operator Amoco Corp. for purchase of its 25.77% interest in NW Hutton field on North Sea Blocks 211/27a and 211/27c. The deal would include minor interests in the Brent oil export system and the Sullom Voe terminal. NW Hutton has produced since 1982 through a single fixed-leg platform. The deal awaits approval of the U.K. government and partners Cieco 25.77%, Petroleo Brasileiro SA 28.46%, and Mobil Oil Corp. 20%.

Schlumberger Ltd.,
New York, acquired Coastal Management Corp. Coastal Management is a leading provider of integrated project management services to North American oil and gas industry and employs 160 workers in offices in Bryan and Midland, Tex. The new unit will merge into Schlumberger Oilfield Services. Terms of the acquisition were not disclosed.

Inventory Management & Distribution Co. Inc.
(Imdci) and Koch Energy Trading Inc. will form a new company to provide asset optimization and city-gate wholesale energy merchant services to the natural gas industry. The new company-IMD Storage, Transportation & Asset Management Co. LLC (Imdst)-is successor to Inventory Management & Distribution Co. LLC, which was owned by Marathon Oil Co., Nipsco Energy Services Inc., and Imdci. Imdst will be owned equally by Imdci and Koch Energy Trading.

Shell U.K. Exploration & Production,
the operating joint venture of Shell U.K. Ltd. and Esso Exploration & Production U.K. Ltd., agreed to swap some North Sea assets with ARCO British Ltd. Shell/Esso has acquired ARCO's 50% interest in Blocks 49/8a and 49/14a in exchange for Shell/Esso's 100% equity in Blocks 47/20 and 48/16b.

DNO Heather Ltd.,
U.K. subsidiary of Norwegian independent DNO ASA, acquired U.K. North Sea Block 210/29a from Elf Exploration plc, Enterprise Oil Production Ltd., Texaco Britain Ltd., and Union Texas Petroleum Ltd. DNO took over operatorship of nearby Block 2/4 Heather field, where DNO was a minor shareholder, from Unocal U.K. Ltd. last year. DNO plans to acquire 400 line-km of 2D seismic near Heather. DNO said a discovery was made on Block 210/29a in 1990.

Vastar Resources Inc.,
Houston, and Shell Deepwater Development Inc. will trade acreage interests covering six contiguous deepwater blocks in the Atwater Valley in the Gulf of Mexico. Vastar also receives a 25% interest in Atwater Valley 136 No. 1 wildcat well, currently operated by British Borneo Exploration Inc. The agreement involves trading various acreage holdings between Vastar and Shell in Blocks 134, 135, 136, 137, 178, and 179, which lie 145 miles south of New Orleans in 3,500 ft of water. The prospect is called Paricutin by Vastar and Star by Shell.

Cue Energy Resources NL,
New Zealand, withdrew from its planned acquisition of Saga Petroleum AS's 50% interest in Jambi Merang block off Indonesia. The sale had an agreed price of $27 million plus a nonrefundable deposit of $5 million, which Cue has already paid. The Norwegian independent said, "Saga disputes that Cue has the right to withdraw from the agreement and is now considering legal proceedings to secure its interests in this case."

The merger of
Ocean Energy Inc. and United Meridian Corp. has been completed (OGJ, Dec. 29, 1997, Newsletter).

Terminals

SHV Energy Ltd., Mumbai (formerly Bombay), a unit of Dutch LPG major SHV Inc., plans a $15.2 million LPG terminal in Kochi (formerly Cochin), India. Kerala State Industrial Development Corp. (Ksidc) will have an 11% equity stake in the terminal. SHV Energy is purchasing 50 acres for the facility from the Cochin Port Trust. It also will build an LPG bottling plant on the property. LPG from the Kochi terminal will be distributed only in Kerala state.

Financing

Desire Petroleum plc, London, will raise $24.2 million through a placement of shares on London's Alternative Investment Market. Desire is an independent exploration company that bid for acreage in the Falkland Islands licensing round, securing two licenses outright and a working interest in two more (OGJ, Nov. 4, 1996, p. 42). The money raised will fund Desire's share in drilling on Tranches C & D and be used to acquire seismic data on Tranches I & L. Tranche C & D operator Lasmo plc, London, is one of a group that has chartered a rig to drill north of the Falklands beginning next month (OGJ, Feb. 23, 1998, p. 30).

Copyright 1998 Oil & Gas Journal. All Rights Reserved.