Exploration
Algeria's Sonatrach assigned an exploration permit to Italy's Agip SpA covering the 591 sq km Wadi el Teh tract in Block 440 about 250 km southwest of Hassi Messaoud in Algeria's Ghadames basin. Agip agreed to spend about $28 million during the pact's initial 4 year exploration period to drill three wells and collect seismic data over a 220 sq km area.
Refining
Kuwait and Pakistan finalized a $1.2 billion plan to construct a 90,000 b/d, jointly operated refinery in Pakistan's Baluchistan province. Kuwait Petroleum Corp. and Pakistani State Oil each is to hold a 26% stake in the project, with remaining shares to be offered to private investors. Kuwait aims to boost its foreign refining capacity in Asia to 400,000 b/d.
European Union (EU) approved a plan by British Petroleum Co. plc and Mobil Corp. to merge their European refining/marketing operations in a deal that would create a $20 billion/year company. Chances were slim the merger plan would fall afoul of EU antimonopoly rules, because the new firm will hold about 12% of the market, comparable to shares of market leaders Royal Dutch/Shell and Exxon Corp. and well below EU's market share limit of 40% (OGJ, Mar. 25, p. 21). The new company is to be fully operational by yearend 1997.
BP Oil Espana let an $11 million turnkey contract to Foster Wheeler Iberia SA, Madrid, for engineering and construction of two 45 metric ton/day sulfur recovery units at its 102,000 b/d refinery in Castellon de la Plana, Spain. The units are needed to achieve mandatory sulfur reductions in gasoline and other products. Start-up is scheduled for May 1997.
Bulgaria reportedly decided to permanently close its Plama base lubricants refinery if a buyer cannot be found by December. The plant shut down last November when it ran out of cash to buy crude oil. Government officials say a buyer would have to pay the refinery's debts, estimated at $45 million. The plant produces 80% of Bulgaria's lubricants.
Workers at Irving Oil Ltd.'s Saint John, N.B., refinery voted 59% to accept a company contract offer, ending a 2-year strike. The deal is conditional upon a lawsuit being dropped against the Communications, Energy, and Paperworkers Union by 22 former members who crossed picket lines. The refinery continued to operate during the standoff with management and replacement workers.
Gas marketing
Gas Industry Standards Board (GISB), Houston, by Sept. 30 is to file with the Federal Energy Regulatory Commission a list of proposed gas industry business practice standards. GISB recently released a second round of proposed standards. FERC accepted 140 standards GISB proposed earlier but urged the group to reach a consensus on other proposals (OGJ, July 29, p. 44).
South Australia's Cooper basin producers Santos Ltd., Delhi Petroleum Pty. Ltd., Boral Energy Resources Ltd., and Crusader Resources NL signed gas sales agreements extending purchases by ETSA Corp. to 2010. If a remaining, undisclosed Cooper basin producer also comes to terms with ETSA, sales gas volumes under the extension could total 114 bcf. The sales agreements extend a September 1994 accord with the South Australian government to sell an additional 380 bcf of gas to customers in the state.
Alternate fuels
U.S. Department of Energy is pressing an advance notice of proposed rulemaking to determine whether certain private and local government automobile fleets will be required to acquire alternate fueled vehicles. DOE will consider possible alternatives to mandates, including incentives and expanded voluntary programs. It plans four public hearings on the issue.
Pipelines
Colombia's Ecopetrol let contract to TransCanada PipeLines Ltd. and partners to develop and operate a national dispatch center for gas transportation and distribution in Colombia. Lead partner TransCanada and Colombia's Promigas each holds 40% interest in the project and Colombia's Gas Natural del Oriente 20%. The group earlier won a contract to operate Centro Oriente gas pipeline system in Central Colombia. Also in Colombia, TransCanada has an interest in the Cusiana oil pipeline project and the Mariquita-Cali natural gas pipeline project.
U.S. Transportation Department's Research and Special Programs Administration (RSPA) extended deadlines for pressure testing of older liquid and carbon dioxide pipelines to Dec. 7, 1998, and Dec. 7, 2001, respectively. The extension gives RSPA time to consider an American Petroleum Institute petition for a risk-based alternative to the pressure testing rule.
Canada's National Energy Board will hear a revised application by TransCanada for expansions beginning Oct. 7 of its natural gas pipeline system in Winnipeg, Man. TransCanada wants to add 127.5 miles of looping, compressor units, and other facilities to its system to increase domestic and export capacity by 286.7 MMcfd. Estimated capital cost is $899 million (Canadian) with a completion date of Nov. 1, 1997, for all program components.
Export-imports
Bolivia and Brazil set definitive terms covering gas exports from Porto Alegre, Bolivia, to industrial markets in southern Brazil to begin in 1999 via the proposed $1.9 billion, 1,926 mile gas pipeline system to Sao Paulo. Terms of the 20 year pact signed by Bolivia's Yacimientos Petroliferos Fiscales Bolivianos and Brazil's Petroleos Brasileiro SA call for gas volumes to rise from 565 MMcfd to as much as 1.13 bcfd, depending on demand.
Companies
Gulf Canada Resources Ltd., Calgary, made early repayment of $183 million to Chase Manhattan Bank with proceeds from a $250 million market offering. The bank debt was to mature in 1997 and 1998. The payment was the last in a $1.2 billion loan the company took in 1991 from an international banking group. Gulf has no debts due before 1999, and these will be refinanced to maturity dates in 2004. The debt management opens the way for expansion of Gulf's oil field operations (OGJ, Aug. 12, p. 21).
Shareholders of Sceptre Resources Ltd voted 99% in favor of a $715 million (Canadian) takeover offer by Canadian Natural Resources Ltd. An Alberta court is expected to issue a final order approving the merger of the two Calgary firms.
Drilling-production
A fire Aug. 13 damaged Noble Drilling Corp.'s Carl Norberg offshore drilling rig while it was working on Lake Maracaibo under a contract from Venezuela's Lagoven SA, injuring a Noble employee and causing unspecified damage. Noble estimates the independent leg, cantilevered jack up, rated to work in 250 ft of water, will be out of service for 90-120 days and says the accidental fire was caused by a third party employee working aboard the unit.
Five workers were injured, two critically, in an explosion Aug. 19 at a Chinese Petroleum Corp. (CPC) gas well in Chiayi County, Taiwan, following a fire less than a day earlier at the same well. CPC at presstime had no statement about the cause of the explosion but said the fire had started when the wind shifted suddenly as workers were welding to carry out repairs at the wellsite. A source close to CPC said losses resulting from the fire and explosion could exceed $4 million.
U.K. Department of Trade & Industry approved a plan by Amerada Hess Ltd. to develop Dauntless oil discovery on Block 21/11 in the North Sea in conjunction with Durward on nearby Block 21/16. The two fields, with estimated reserves of 50 million bbl and 100 million bbl of oil, respectively, are to be developed with a production, storage, and offloading vessel. Amerada expects start of production in first quarter 1997, with peak output to reach 50,000 b/d.
Dolphin DOC AS, Tananger, Norway, let a $50 million contract to Norsk Modifikasjon, Vedlikehold, & Service AS, Stavanger, to upgrade and modify Dolphin's Bideford Dolphin semisubmersible rig. Work is slated for completion early in June 1997, after which the drilling unit is to begin development drilling off Norway under a contract with Saga Petroleum AS.
Norway's Den norske stats oljeselskap AS (Statoil) produced first gas from West Sleipner field on Norwegian North Sea Block 15/6 for commissioning field facilities. The company plans to start commercial gas production Oct. 1. West Sleipner's estimated 4.5 tcf of gas reserves is to be exported by way of East Sleipner field to Europe. The field's condensate reserves, estimated at 246 million bbl, are earmarked as feedstock for Statoil's Kalundborg refinery in Denmark.
Statoil chartered Nan Hai 5 drilling rig from China Offshore Southern Drilling Co. to drill five wells this fall in Lufeng 22-1 oil field in the South China Sea. Statoil took over operatorship of the 35 million bbl field last year from Ampol Exploration Ltd., Sydney. The company plans to use a production and storage ship to recover oil through subsea wells for export by shuttle tanker.
Chevron U.S.A. Inc. let contract to Pool California Energy Services Inc. unit of Pool Energy Services Co., Houston, to construct a 1,000 hp electric platform rig and to operate the unit under a 4-year contract off California. The new rig-which will feature dynamic loading capabilities, enabling it to work in seismically active locations and on deepwater floating production facilities-is to perform workover, sidetrack drilling, and abandonment operations, beginning late this year.
Coastal Corp. boosted its 1996 exploration and production capital budget by $80 million to $270 million. Coastal is earmarking most of the added outlays for drilling development wells in South Texas and the western Gulf of Mexico off Texas and Louisiana, activity that is expected to increase its production to 450 MMcfd of gas equivalent, up 44% from 1995. Coastal expects its production to jump another 44% in 1997.
PrimeWest Energy Inc., Calgary, agreed to buy from Amoco Canada Petroleum Ltd. and affiliates interests in western Canadian oil and gas properties in 12 areas with working interest production of 4,882 b/d of oil and liquids and 39.4 MMcfd of gas. PrimeWest intends to sell a royalty in the properties to PrimeWest Energy Trust.
Australia's first concrete gravity platforms are nearing float-out dates. Construction is almost complete at Port Kembla, N.S.W., on the platforms built for Esso/BHP combine's Bream B and West Tuna oil fields in the Bass Strait. Weather permitting, the 600 km tow-out to Bass Strait is set for Oct. 1 for Bream B and Nov. 1 for West Tuna. Construction of the $1.1 billion (Australian) project began in early 1994. West Tuna is to start up in early 1997 and peak at 30,000 b/d. Bream B is to start up by yearend and peak at 15,000 b/d.
Environment
U.S. Environmental Protection Agency extended for 2 years Alaska's exemption from EPA's low sulfur diesel fuel requirements, after admitting the rule may be unreasonable for Alaska because of geographical, meteorological, and economic factors.
Petrochemicals
Lyondell Petrochemical Co., Houston, resumed operation Aug. 15 of all major process units at its Channelview, Tex., petrochemical complex. The company was forced to shut down the plant July 27 after a fire in a nearby ARCO Pipe Line Co. pipeline extensively damaged the plant's pipeline and electrical systems (OGJ, Aug. 5, p. 24). Lyondell estimates the event could result in lost after tax earnings of $20-25 million.
Saudi Methanol Co. (Ar-Razi) and a group of Japanese companies signed a $160 million loan agreement with Export-Import Bank of Japan to finance construction of an 850,000 metric ton/year chemical-grade methanol plant at Ar-Razi's complex at Al-Jubail, Saudi Arabia. Mitsubishi Heavy Industries Co., Tokyo, is performing engineering, procurement, and construction. The plant will use Mitsubishi Gas Chemical Co. technology. Start-up is scheduled for mid-1997.
A group including Lyondell, Tokyo's Nissan Chemical Industries, and Maruzen Polymer Corp. plans to jointly promote licensing of a Nissan slurry high density polyethylene (HDPE) process that uses Nissan's highly active supported catalysts and a low-pressure slurry technology to produce high-strength HDPE resins. Lyondell operates a 480,000 metric ton/year plant near Bay City, Tex., that uses the Nissan technology, and Maruzen, Tokyo, operates a 100,000 ton/year plant in Chiba, Japan, that uses the process.
Agropolychim plc, Devnya, Bulgaria, let an engineering and procurement contract to Jacobs Engineering Group Inc., Pasadena, Calif., for Agropolychim's ongoing project to improve ammonia plant efficiency. Jacobs will reengineer and refurbish two fired heaters to incorporate combustion air preheat for conversion to a forced-draft burner system.
BHP Petroleum Pty. Ltd. scrapped plans to build a $400 million (Australian) methanol plant in Western Australia's Pilbara region. A 2 year, $5 million feasibility study found the project uneconomic, mainly for lack of long-term markets. Plans had called for an 850,000 metric ton/year plant fed by natural gas and carbon dioxide from Offshore Western Australia fields. It first targeted a 1999 market window, but commitments to new methanol plants in Chile and India scotched that, abetted by a collapse in methanol prices this year.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.
