Jan. 4, 1999
An Iranian tanker collided with a jetty at the port of Bandar-Abbas in southern Iran, spilling a reported 100 metric tons of crude oil in the Persian Gulf. The tanker was transporting 60,000 tons of oil. At presstime, the incident was still under investigation. The Gas Industry Standards Board


An Iranian tanker collided with a jetty at the port of Bandar-Abbas in southern Iran, spilling a reported 100 metric tons of crude oil in the Persian Gulf. The tanker was transporting 60,000 tons of oil. At presstime, the incident was still under investigation.


The Gas Industry Standards Board (GISB) executive committee approved the first part of a series of standards for U.S. natural gas interstate pipelines with regard to Internet-based electronic commerce and title-transfer tracking. Standards outlining Internet-based commerce will be implemented by September 1999. Title-transfer tracking standards will be implemented by June 1, 2000. Standards related to flowing gas, invoicing, capacity release, and contracting are expected to be approved and implemented by October 2000, said GISB.

TransCanada PipeLines Ltd.,
Calgary, filed with Canada's National Energy Board to build a $161.8 million (Canadian) natural gas pipeline across Lake Erie (OGJ, Oct. 6, 1997, p. 39). The proposed 98-km, 36-in. Lake Erie crossing will transport gas to U.S. Northeast and mid-Atlantic markets and connect pipeline facilities at St. Clair, Ont., with the proposed Millennium Pipeline in the U.S. (OGJ, June 15, 1998, p. 28). Initial capacity of the new line would be 700 MMcfd. Lake Erie crossing and Millennium are expected to be in service by Nov. 1, 2000.


Hibernia oil production platform operators were ordered to cut production by about 33% to 68,000 b/d of oil to avoid exceeding natural gas flaring limits. The restriction, imposed by the Canada-Newfoundland Offshore Petroleum Board until a new gas injection well is in operation, will take effect Jan. 1, 1999. Hibernia management said the restriction is a short-term problem that will be resolved in a few weeks. Hibernia production is expected to increase to 135,000 b/d of oil in first quarter 1999.

Coparex Netherlands BV
awarded Victoria Oilfield Development Ltd., Aberdeen, and Seacor Marine unit Sarost a 4-year contract to provide and operate a floating production, storage, and offloading vessel for Isis field off Tunisia. The award marks the first time Victoria's tripod catenary mooring and loading system will be used with multiple risers, said the company. The system can handle up to nine risers, production flow lines, water injection, a gas lift line, and umbilicals.

Calgary, and partners in the Terra Nova oil development project off Newfoundland canceled a drilling contract with Transocean Offshore Inc., Houston. Petro-Canada will pay Transocean $40 million (U.S.) for the cancellation. The Transocean Explorer drilling vessel was to have started a $77 million (U.S.), 2-year contract in 1999, drilling production wells at the 406-million bbl field on the Grand Banks. The Terra Nova group said the cost of retrofitting the rig had risen by 25% to $100 million (Canadian). It will be seeking tenders for a newer unit.

Cabinda Gulf Oil Co. Ltd.,
a unit of Chevron Corp., and its partners have boosted oil production from their operations off Angola's Cabinda enclave to 510,000 b/d. Production was bolstered through new wells drilled in Nemba and Lomba fields, in Area B of Block 0. By 2001, the partners expect production in the area to reach 600,000 b/d. They plan to invest about $4 billion in Angola over the next 5 years. Partners include operator Chevron 39.2%, Sonangol 41%, Elf Petroleum Angola 10%, and Agip Angola Ltd. 9.8%.

Talisman Energy (U.K.) Ltd.,
Aberdeen, let a $11.7 million contract to Halliburton Co. unit Brown & Root Energy Services for the engineering and topside construction of its Clyde platform, on U.K. North Sea Block 30/17b, about 360 km east of Dundee. Clyde is being prepared for increased production from Orion field, which will transport oil to Clyde through a 10-in., 16 km pipeline. Talisman expects first oil on Oct. 1, 1999.

Saga Petroleum AS,
Oslo, announced first oil from Varg field off Norway. Operator Saga 35% and Statoil 65% expect the field to reach plateau production of about 50,000 b/d of oil in first quarter 1999. Saga recently boosted its estimate of Varg field reserves by 50% to 50 million bbl of oil (OGJ, Dec. 28, 1998, p. 30). Varg lies in 84 m of water on Norwegian North Sea Block 15/12b.

Enterprise Oil plc,
London, increased estimated reserves in its Pierce field on U.K. North Sea Block 23/22a after drilling a fifth development well. Enterprise said the latest well added 20 million bbl of oil to the earlier reserves estimate of 84 million bbl of oil and 202 bcf of gas. Pierce is being developed with a production, storage, and offloading ship, with oil exported by shuttle tanker. Pierce is expected to be brought on stream shortly and is anticipated to reach plateau production of 45,000 b/d of oil.

Amoco (U.K.) Exploration Co.
and its partners in Brown natural gas field announced the field's first production. Brown, on Block 49/30c in the southern U.K. North Sea off Norfolk, began producing 50 MMcfd of gas Dec. 21, only 2 months after its discovery. Operator Amoco 22.2% owns Brown field with BG Exploration & Production Ltd. 50% and Amerada Hess Ltd. 27.78%.


The Blood Tribe of Alberta acquired an oil refinery at Bowden, Alta., north of Calgary, from Parkland Industries Ltd. for $50 million (Canadian). The group says the purchase marks the first time an aboriginal group has owned a refinery. The Blood Tribe said it has committed an additional $25 million to upgrade the 6,500 b/d refinery. Parkland will use proceeds from the sale to expand its retail system in Western Canada.

Gas storage

Alberta Energy Co. Ltd., Calgary, plans to add 10 bcf of natural gas storage by April to a facility in the Peace River area of northern Alberta. Both the name of the location and the cost were withheld, although the company confirmed that a depleted reservoir will be used. The storage expansion is needed to support the expansion of several export-oriented natural gas pipeline systems in Canada. Storage facilities in Western Canada are now about 91% full vs. 78% at yearend 1997. Total storage capacity in Alberta is now about 250 bcf.


Chevron Corp. agreed to acquire all the outstanding shares of Rutherford-Moran Oil Corp., Houston, for about $91 million worth of Chevron common stock and more than $302 million in assumed debt. The transaction is contingent on the execution of a new operating agreement with Pogo Producing Co., Rutherford-Moran's partner in the Block B8/32 concession in the Gulf of Thailand. Under terms of the proposed acquisition, Chevron must assume operatorship of the Thai concession from Pogo. The acquisition is also dependent on Chevron reaching an agreement to acquire an interest of at least 5% from Palang Sophon Ltd., the other partner in the concession.

Conoco (U.K.) Ltd.,
Aberdeen, plans to acquire Canadian Occidental Petroleum Ltd.'s British unit, Canadian Petroleum U.K. Ltd., for an undisclosed amount. The purchase includes Canadian Petroleum's interests in three producing gas fields-Caister 30%, Vulcan 7.88%, and South Valiant 12.5%-with reserves totaling 83 bcf of gas. The purchase increases Conoco's interest in Vulcan and South Valiant to 50% and raises its interest in Caister to 30%. Conoco already operates Vulcan and South Valiant. The deal will give Conoco an additional 15% interest in the Caister Murdoch gas pipeline, bringing its total stake to 42.25%; Conoco will also gain a 10% interest in the Esmond Transportation gas pipeline.

Pan-Alberta Gas Ltd.,
a unit of TransCanada PipeLines Ltd., received the necessary approval for its sale to its pool producers. The sale was approved by 339 company members of the producer pool. The company also received court approval for a suit settlement brought by nine producer litigants who claimed damages on grounds of alleged breach of contract and other issues. Pan-Alberta will now be owned and directed by a producer-elected board.

BP Exploration Operating Co. Ltd.
plans to purchase Saga Petroleum U.K. Ltd.'s 12% interest in Miller oil field for $45 million. Miller is in the U.K. North Sea, 40 km northwest of Sleipner field. BP expects to produce 52,000 b/d of oil from Miller in 1999. Remaining proven plus probable oil reserves in the field are estimated to be 9 million bbl.

Berry Petroleum Co.,
Taft, Calif., signed an agreement with Aera Energy LLC-a joint venture of Mobil Exploration & Producing U.S. Inc. and Shell Oil Co.-to acquire the Placerita, Calif., oil field and a 42-MW cogeneration facility for $35 million. Placerita, 70 miles south of Bakersfield, covers about 700 acres and produces 2,800 b/d of 13° gravity oil.

The proposed sale
of certain oil and gas assets of Unocal Corp. unit Spirit Energy 76 to the 50-50 joint venture of Newstar Energy USA Inc., Monroe, Mich., and Fort Worth-based Omimex Energy Inc. was terminated (OGJ, Oct. 19, 1998, p. 44).

Texon LP,
Houston, acquired natural gas liquids assets from Petro Source Corp., Houston, for an undisclosed sum. CMS Energy Corp., Dearborn, Mich., owns 50% of Texon. Included in the sale is a propane terminal in Albuquerque with 3,000 bbl of storage capacity, capacity on the 1,300-mile Dixie Pipeline propane system, and Petro Source's West Texas gas liquids business.

Black Sea Energy Ltd.,
Calgary, plans to form an upstream partnership with Central Fuel Co., Moscow. Under terms of the agreement, Central Fuel will acquire a 25% interest in Black Sea's Russian venture, the Tura project, which operates the western Siberian Kalchinskoye oil field and Northern Kalchinskoye exploration block. Black Sea holds a 50% interest in Tura through its wholly owned unit Great Plains Petroleum (Cyprus) Ltd. Central Fuel will acquire a 50% interest in Great Plains through the issuance of a $10 million note.


Koch Oil Sands LP drilled up to 70 cored wells in December on oilsands leases north of Fort McMurray, Alta. The partnership, part of Koch Canada Group of Companies, Calgary, is drilling to determine reserves on its 39,500-acre Fort Hills leases. Koch has a 78% interest in the leases, and UTS Oil Sands LP has 22%.


Petroleo Brasileiro SA entered into a joint venture with Santa Fe Energy Resources Inc., Houston, on two blocks in the Potiguar basin off Brazil. Sante Fe will operate both the Cara#na production block and the BPOT-2 exploration block, owning a 51.4% interest in Cara#na and 38.6% in BPOT-2. Petrobras will retain respective 20% and 40% interests in the blocks. Other partners include Argentina's YPF SA and Brazilian oil field firm, Sotep.

Boral Ltd.
unit Oil Co. of Australia made a gas discovery in the Denison trough, in southeast Queensland. During open hole tests, the Yandina 2 well, about 30 km north of Rolleston, flowed 9.5 MMcfd of gas. Yandina 1, the only previous well in the area, was abandoned in 1965 after failing to show indications of gas. Gas supplies are already flowing from the Denison trough region via pipeline to Gladstone and Rockhampton on Queensland's central east coast.

State Oil Co. of the Azerbaijan Republic
(Socar) signed a 50-50 production-sharing agreement with a consortium of four Japanese firms for the development of Ateshgyakh, Yanan-Tava, and Mugan Deniz blocks in the Azeri sector of the Caspian Sea. The Japanese consortium, which is expected to collectively invest about $2.3 billion over the next 25 years, comprises Japan Petroleum Exploration Corp. 45%, Teikoku Oil Co. 15%, Indonesia Petroleum Ltd. 25%, and Itochu Corp. 15%. The companies expect to drill three exploration wells over the next 3 years. The three fields are thought to contain reserves of 550-650 million bbl of oil.

Energy marketing

The Wholesale Energy Group of Houston Industries (HI), Houston, and Big Rivers Electric Corp., Henderson, Ky., signed a wholesale marketing agreement. Under the agreement's terms, HI will sell Big Rivers' excess power for a period of 2 years. HI also will carry out hourly, next-day, and longer-term transactions for Big Rivers.


HI's Wholesale Energy Group and the city of Casa Grande, Ariz., plan to build a $263 million, 500-MW natural gas-fired power plant. The Desert Basin Generating plant will be on a 20-acre site just inside the corporate limit of the city of Casa Grande, about 50 miles southeast of Phoenix.

Coryton Energy Co. Ltd.,
London, completed financing for a £470 million, 775-MW natural gas-fired power generation plant to be built near the Shellhaven and BP Coryton refineries in Essex. A group of banks, led by CSFB, provided the financing. The plant, to be built by Bechtel under a turnkey contract, is expected to be in operation by early 2001.


Tamil Nadu Industrial Development Corp. chose a multinational group including CMS Energy Corp. and Unocal to build a liquefied natural gas terminal, regasification unit, and storage facility at Ennore, Tamil Nadu, India. The $1.6 billion project will include a 1,886-MW, gas-fired power plant and the capacity to regasify 2.5 million metric tons/year of LNG. Interests in the group are: CMS Energy 20.75%; Grasim Industries Ltd., a unit of India's Birla Group, 20.75%; Siemens 20.75%; Woodside Petroleum Ltd. 20.75%; and Unocal Bharat Ltd. 17%. Financial closure is expected by yearend 2000. Construction is slated to begin by April 2001, with start-up slated for mid-2003. A memorandum of understanding has been executed with Ras Laffan LNG Co. of Qatar to supply LNG for the project.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.