INDUSTRY BRIEFS

Exploration

Gulf Canada Resources Ltd. and Talisman Energy Inc., both of Calgary, reported a significant natural gas discovery in southern Sumatra. On test, the Suban 2 well flowed at a cumulative rate of 43 MMcfd from two gas-bearing zones. The upper zone flowed 28 MMcfd of gas and 219 b/d of condensate through a 48/64-in. choke with 2,660 psi flowing tubing pressure. The deeper interval flowed 15 MMcfd of gas and 146 b/d of condensate through a 32/64-in. choke with 3,140 psi flowing tubing pressure.

Spills

The Sea Empress oil tanker was being taken into harbor by an inexperienced pilot when it ran aground on the South Wales coast, a court in Cardiff was told on Jan. 12. The Milton Port Authority was being prosecuted for causing pollution following the incident in February 1996, which became one of the U.K.'s largest oil spills (OGJ, Feb. 26, 1996, p. 34). A report 6 months ago by the Marine Accident Investigation Branch of the U.K.'s Department of Transport said the grounding was the result of a catalog of mistakes, and that port and government response measures were inadequate.

Companies

PennzEnergy Co., formerly Pennzoil Co., completed the spinoff of its products group under the name Pennzoil-Quaker State Co. The spunoff products group results from the merger of the downstream business of the former Pennzoil and all of Quaker State Corp. PennzEnergy retains the partners' exploration and production businesses (OGJ, Jan. 11, 1999, p. 38),

Parker Drilling Co.,

Tulsa, and Superior Energy Services Inc., Harvey, La., jointly agreed to terminate their $168 million merger agreement (OGJ, Nov. 9, 1998, p. 46). Superior agreed to make a cash payment to Parker to settle certain obligations under the deal. In response to press reports to the contrary, Parker said it would not pursue legal action against Superior.

Seagull Energy Corp., Houston, sold $52.5 million in oil and gas producing properties in several onshore areas in the southwestern U.S. to an undisclosed buyer to reduce long-term debt. The properties have reserves of 60 bcf of gas and produced about 20 MMcfd during 1998. In a separate deal, Seagull sold a gas gathering pipeline and processing facility for $4 million. The firm said it hopes to sell its remaining gathering and pipeline assets within a few months. The sales are part of Sea- gull's program to rationalize non-strategic assets as a result of its planned merger with Ocean Energy Inc. (OGJ, Nov. 30, 1998, Newsletter).

Apache Corp. acquired certain Gulf of Mexico oil and gas assets from Petsec Energy Ltd., Sydney, for $68.5 million (U.S.). Included in the sale are Petsec's 50% interest in 23 joint-venture leases, its 100% interest in one producing lease, and its 100% interest in 20 non-producing leases. Since October 1997, Petsec's market value has fallen from $785 million (Australian) to $53 million as a result of low oil prices, certain exploration drilling failures, and increasing bank pressures to repay debt.

Abraxas Petroleum Corp., San Antonio, said 98% of the shares of New Cache Petroleum Ltd., Calgary, have been tendered to it following its $129 million (Canadian) takeover bid for the Canadian company. Abraxas will integrate New Cache with its Canadian unit, Abraxas Petroleum Ltd., and with Grey Wolf Exploration Ltd., Calgary, in which it has a 48% interest. The takeover will add 1,700 b/d of oil and liquids production and 29 MMcfd of natural gas output to Abraxas' Canadian production.

Futures

The New York Mercantile Exchange (Nymex) set a volume record of 95,018,685 contracts for 1998. The record tops 1997's record by 13%. The 1998 volume includes more than 76 million contracts traded on the Nymex division and more than 18 million on the Comex division.

Drilling-production

U.S. Minerals Management Service and Wyoming are offering 3,810 b/d of their royalty crude as part of an MMS pilot program testing the sale of royalty in-kind oil. The crude will come from 183 properties in the Bighorn and Powder River basins for 6 months beginning Apr. 1.

Petro-Canada

spudded a $30 million (Canadian) appraisal well on Dec. 30 in the Hebron area of the Grand Banks off Newfoundland. D-94 was spudded by the Glomar Grand Banks rig and is the fourth well drilled on the Hebron structure since 1980. The rig, owned by Glomar International (Canada) Drilling Co., recently completed an extensive refit. The well is 211 miles southeast of St. John's, Newf., and about 6 miles north of the Terra Nova oil field, currently under development. Interests in the Hebron test are operator Petro-Canada 21.9%, Chevron Canada Resources Ltd. 31.9%, Mobil Oil Canada 36.8%, and Norsk Hydro Oil & Gas Inc. 9.4%.

Total Offshore Production Systems

(TOPS), a joint venture of R&B Falcon Corp. and Intex Engineering Inc., will undertake what it claims is the world's first 15,000 psi subsea completion in 880 ft of water on Green Canyon Block 20 in the Gulf of Mexico. The Gyrfalcon well was drilled in March 1997 by Shell Offshore Inc., which retains a net profit interest in the field. The subsea facilities will be provided and installed by a group including the Cameron division of Cooper Cameron Corp., FSSL Controls, Kvaerner Oilfield Products, Sonsub International Inc., and Cal Dive International. Production is slated to begin in mid-1999.

Anadarko Petroleum Corp.,

Houston, let contract to Enercon Engineering Inc., also of Houston, for detailed design, procurement, and management of its Tanzanite development on Eugene Island Block 346 in the Gulf of Mexico (OGJ, Aug. 17, 1998, p. 116). The contract entails construction of a 16-slot drilling and production platform for Tanzanite. The platform will have capacity for 40,000 b/d of oil and 350 MMscfd of gas and is slated for installation in July 2000. Enercon will also design a 12-slot jacket and piles for Anadarko's Hickory project on Grand Isle Block 116 in 324 ft of water, also in the gulf.

Taxes

Imperial Oil Ltd., Toronto, received a $155 million (Canadian) rebate from Alberta on resource taxes paid during 1981-90. The settlement includes about $89 million in interest taxes. The Canadian unit of Exxon was awarded an $843 million tax refund from Ottawa in 1996 on resource tax payments during 1974-90. Several other companies have received rebates relating to an earlier court decision on a tax appeal by Gulf Canada Resources Ltd.

Pipelines

Petroleum Authority of Thailand (PTT) awarded a joint venture of Italy's Saipem SpA and Japan's Mitsui & Co. a contract to build an extension of the Myanmar-Thailand natural gas pipeline. PTT's board of directors endorsed the 5.2 billion baht ($144.6 million) award and rejected criticisms from some bidders that the selection process was not transparent. PTT Chairman Pricha Attavipach responded to those claims by stating that the selection was conducted in a transparent manner by committee, with strict compliance with the technical and commercial terms set by PTT's engineering consultant, Bechtel International Inc.

Alaska gave its preliminary approval for a proposed 14-mile natural gas pipeline that will provide gas to the North Slope village of Nuiqsut. The pipeline will link Nuiqsut with ARCO's planned central processing facility for Alpine oil field and will share the same aboveground support system as the Alpine project pipelines for the initial 8 miles. Construction of the aboveground portion is scheduled for this winter, while the underground portion is slated for a spring 2001 completion date.

KeySpan Energy Corp., New York, acquired an additional 25.5% interest in Premier Transco Ltd. natural gas pipeline for $32 million from BG plc. KeySpan now holds a 50% interest in the 24-in. system, which transports gas from southwestern Scotland to northern Ireland.

Kaneb Pipe Line Partners LP, Dallas, acquired from Amoco Oil Co. a 169-mile petroleum products pipeline between Council Bluffs, Iowa, and Sioux Falls, S.D., and a petroleum storage terminal at Sioux Falls. The purchase price was $7-10 million, said a Kaneb official. Kaneb acquired a second pipeline from General Electric Capital Corp. (GECC) for about $5 million. The 203-mile pipeline, in Nebraska, extends from Geneva to North Platte.

Rocky Mountain Ecosystem Coalition wants to halt construction of the Alliance natural gas pipeline, which has been approved by Ottawa (OGJ, Dec. 7, 1998, p. 46). The coalition alleges two government agencies failed to perform adequate environmental assessments before the pipeline was approved by the National Energy Board. Coalition official Mike Sawyer said the group has asked the federal court to issue an injunction against construction until a complete assessment is performed. Alliance said it will oppose any such injunction. It plans to begin land clearing in northern Alberta in February in order to meet an Oct. 1, 2000, in-service date.

Power

Japan's Marubeni Corp., a partner in the consortium building a 330-MW gas/naphtha-fired power plant in Pillaiperumanallur, Tamil Nadu, India, let a $60 million contract to Stone & Webster Inc., Boston, for engineering, procurement, start-up, and testing services. Marubeni is the main contractor for the project. The plant, slated for start-up in 2001, will operate initially on 100% tanker-delivered naphtha. After gas becomes available from two offshore wells, a 30% gas/70% naphtha mix will be used to fuel the plant.

Dynegy Inc., Houston, and Nicor Inc., Naperville, Ill., will jointly build a 250-MW natural gas-fired, peak-demand power generation plant at East Dundee, Ill. The companies will start construction of the Rocky Road power plant in first quarter 1999. Service is slated to begin sometime this summer. The partners will sell the power on the wholesale market.

Refining

Tosco Refining Co. brought a new 7,500 b/d Butamer unit on line at its Los Angeles refinery. UOP LLC provided the basic design for the unit, which isomerizes normal butanes. The project was completed in only 8 months, said Jacobs Engineering Group Inc., which performed design, procurement, and construction of the unit.

Poland's R.N. Jedlicze licensed the used oil re-refining technology, Revivoil, from Institut Fran?ais du P?trole (IFP), Rueil-Malmaison, France. R.N. Jed- licze will build an 80,000 metric ton/year re-refinery based on the process at its refinery near Krakow. Revivoil, codeveloped by IFP and Viscolube, produces high-quality lubricant base oils from used oil. Construction will begin in 2000.

Gas processing

BOC Gases, Murray Hill, N.J., will build a 500 ton/day CO₂ purification and liquefaction facility in El Segundo, Calif. The BOC plant, slated to come on stream during first quarter 2000, will recycle raw CO₂ from Chevron's El Segundo refinery under a long-term supply agreement. Due to growth in food preservation and carbonated beverage markets, demand for CO₂ has risen in recent years, said BOC.

Oilsands

Shell Canada Ltd. let contract to a group including Krupp Uhde GmbH, Parsons Corp., Tri Ocean Engineering Ltd., and H.A. Simons Ltd. for the construction of a 558 metric ton/day hydrogen plant near Edmonton. The hydrogen will be used to treat and condition bitumen from Shell's Athabasca oilsands. The plant is slated for start-up in 2002.

Terminals

Enbridge Inc. unit Enbridge Venezuela SA, Williams International Inc., and Northville Industries Corp., Melville, N.Y., plan to acquire a storage and ship-loading terminal at Jose, Venezuela, for $385 million from Pdvsa Petroleos y Gas SA. Enbridge and Williams will each hold a 45% interest in the venture, while Northville will hold 10%. The terminal has a capacity of about 800,000 b/d of oil.

Total unit Total Petroleum Philippines Corp. plans to spend $29 million to upgrade its storage facilities in the Philippines. Total's depot in Bataan province will be upgraded and expanded to 240,000 bbl of capacity from 100,000 bbl. Total also will open a 400,000 bbl depot in the Batangas Bay area, south of Manila. Total plans to establish at least 15 service stations in the Philippines this year. The first service station owned by Total was opened this month in San Fernando, north of Manila.

Tankers

Qatar Liquefied Natural Gas Co. (Qatargas) chartered its sixth tanker built by Japan's Mitsui Engineering & Shipbuilding Co. The carrier, called Zekreet, has the capacity to transport 135,000 cu m of LNG.

LNG

Qatar's Ras Laffan LNG Co. (Rasgas) completed work on the offshore facilities in North field that will feed its $3.4 billion LNG plant. Drilling began in April 1997; 10 of the 15 planned wells have been drilled. The LNG plant will treat and liquefy more than 1 bcfd of gas. LNG production is expected to begin in mid-February, 6 weeks ahead of schedule. As part of a 25-year take-or-pay purchase agreement, Rasgas will export 4.8 million metric tons/year of LNG to South Korea's Korea Gas Corp. beginning in August. A 25-year, 7.5 million ton/year deal was recently firmed up to supply LNG to India's Petronet (OGJ, Dec. 21, 1998, p. 36).

Products marketing

South Africa's Engen Petroleum Ltd. plans to construct a petroleum retail network and lubricants supply facility in Ghana. As part of its attempt to obtain a 15-20% market share in Ghana, Engen recently opened an office in Abelenkpe, Accra.

Copyright 1999 Oil & Gas Journal. All Rights Reserved.