OGJ Newsletter

• U.S. Industry Scoreboard 11/18 [70475 bytes]

Texaco Chairman Peter Bijur quickly moved to apologize for the tenor of comments taped by executives accused of destroying documents being sought in a employee racial discrimination lawsuit. The tape is evidence in the suit.

Two of the executives were suspended, and retirement benefits were cut for another two former senior employees involved in the episode. Bijur also called for a company-wide review of diversity programs.

Nevertheless, Texaco's troubles have intensified, with some public officials calling for a boycott of the company's products. Meanwhile, a grand jury has launched an investigation into whether documents were destroyed illegally, and a disgruntled company stockholder filed a separate suit, claiming breaches of trust and fiduciary duty by Texaco directors. Negative publicity could cut Texaco earnings, revenues, and capital, an attorney for the shareholder said.

While less in the limelight, the recent settlement of a lawsuit aimed at a Chevron unit also has focused attention on Big Oil and discrimination issues.

Chevron Information Technology Co. (CITC), San Ramon, Calif., agreed to an expedited wage claims procedure on behalf of 777 current and former female employees who filed a class action lawsuit.

If all members of the class file claims, the cost to Chevron could be $7.42 million. Other elements of the settlement include establishing a diversity council and high-level oversight of complaints.

Industry also is grappling with more safety problems.

Texaco Refining & Marketing Inc. is investigating the cause of a Nov. 11 explosion and fire in a hydrotreater at its 96,000 b/d Wilmington, Calif., refinery.

No injuries were reported, and all Texaco and contract employees were accounted for afterwards, Texaco said. The fire was confined to the No. 4 unit.

The fire was extinguished in a little more than 1 hr. Extent of the damage was being assessed before presstime.

Meanwhile, Pemex is looking into the cause of a tank farm fire the same day at San Juan Ixhuatepec, north of Mexico City. The fire was confined to two storage tanks holding 105,000 bbl of gasoline.

Other tankage contained as much as 1.25 million gal of gasoline, but tanks were being drained to prevent further explosions, according to Pemex.

Eleven injuries were reported, and thousands of area residents fled their homes, press reports from Mexico said.

India will need to invest $73 billion in hydrocarbon projects by 2010 to meet its energy needs.

According to a study by Infrastructure Leasing & Finance Services Ltd., the oil exploration sector needs investment totaling $50-65 billion by 2010.

Downstream, 17 refinery projects are at various stages of planning or implementation, entailing estimated investment of $23 billion and including $2 billion for public sector projects.

Demand for petroleum products is expected to approach 155 million metric tons by 2007 compared with 81 million metric tons in 1996-97.

According to the study, India would need to import 70 million metric tons/year of crude oil and 34 million metric tons/year of products by 2010 "even after assuming substantial improvement in local productivity."

Thailand gas development shows no sign of letting up, with Unocal Thailand and partners unveiling plans to invest more than $1.38 billion for gas development in the Gulf of Thailand.

Unocal plans to drill 489 development wells, 21 tie-back wells, and 52 appraisal and delineation wells, as well as install 38 wellhead platforms and lay 153 miles of pipeline. A total of 11 fields covered under the 5-year investment program include flagship Erawan and Baanpot, Satun, Platong, Funan, Jakrawan, Gomin, Pailin, Pakarang, Trat, and Pladang.

Objective of the program is to boost gas production during 1996-2000 to more than 1 bcfd from an average of 800 MMcfd currently.

A total of $4.2 billion has been invested in the group's Thai operations thus far.

Abu Dhabi Investment Co. (Adic) says that investment to expand the emirate's refining sector and launch its petrochemical industry could cost about $2.9 billion.

Adic disclosed study results showing the planned 135,000 b/d Ruwais refinery expansion by state-owned Abu Dhabi National Oil Co. could cost about $1.8 billion. Adic's study put cost of the recent Umm Al Nar refinery expansion to about 85,000 b/d from 70,000 b/d at $80 million. Earlier this year, the emirate awarded a contract to Statoil/Neste joint venture Borealis to develop a $1.1 billion petrochemical complex at Ruwais that would produce 500,000 metric tons/year of polyethylene (OGJ, Sept. 23, Newsletter).

Egyptian exports of gas to Turkey in the form of LNG appear closer to reality.

Amoco Egypt Oil Co. signed a memorandum of understanding with Egyptian General Petroleum Corp. (EGPC) and Turkey's Botas Petroleum Pipeline Corp. to set up two joint ventures to develop the project. EGPC will be responsible for constructing and operating a gas liquefaction plant on Egypt's Mediterranean coast, as well as transporting and selling as much as 7.3 million metric tons/year of LNG to Turkey. Gas supplies will come from Nile Delta fields.

The second venture, to be established by Botas, will be responsible for constructing and operating a regasification plant near Izmir, Turkey.

Is even more Algerian gas headed for Europe in another pipeline?

On the heels of the inauguration of the Maghreb-Europe pipeline (OGJ, Nov. 11, p. 39), talks are being held in Algeria on a third gas pipeline linking that country and Europe. Algeria also transports gas to Italy via the TransMed pipeline.

Algeria's Le Matin newspaper reports talks are being held between state-owned Sonatrach and BP for a pipeline linking the western Algerian port of Mostaganem, near Arzew, with Spain.

Italy's ENI has signed a $3 billion gas supply deal with Libya, including a project to build a pipeline under the Mediterranean, Middle East Economic Survey (MEES) reports. Start-up could come as early as 2000.

The accord was signed June 17 but not disclosed until word was carried in an ENI prospectus, MEES says. The deal extends a 1974 accord involving development of gas fields off Libya and new onshore fields.

Iraq says it's ready to begin exporting oil immediately as soon as the U.N. oil-for-aid deal is put into effect.

The agreement between the U.N. and Iraq was signed May 20, allowing Iraq to export $2 billion worth of oil to raise money for food and other needed supplies for its population.

It was scheduled for a September implementation but halted when Iraq sent troops into northern areas to help one Kurdish faction fight another.

Iraqi Oil Minister Amir Muhammed Rasheed says exports can begin immediately, adding the ministry is ready to sign supply and E&D contracts with foreign countries and multinational firms.

And France's Elf, chasing E&D projects in that country, is lining up to buy Iraqi oil. According to press reports from the Middle East, the company has submitted an offer to purchase oil when the agreement does take effect.

Meanwhile, as demand for oil and products continues to soar in China, that country is also eyeing Iraq prospectively. Talks are being held on the possibility of signing oil exploration contracts, reports Xinhua news agency.

Xinhua says talks between China National Petroleum Corp. and Iraq include a plan calling for China to help Iraq develop an oil field with potential capacity of 300,000 b/d.

Meanwhile, China and Russia are planning to jointly explore in Siberia, the news agency says. Xinhua says a proposed pipeline from Siberia to China is under discussion.

Universities in Venezuela are now going to play a role in developing new approaches to the continuing initiative to reactivate that country's marginal fields (OGJ, Nov. 11, p. 42).

In an unprecedented program, the Ministry of Energy & Mines and Petroleos de Venezuela (Pdvsa) said three universities close to the fields will be involved in their development. Pdvsa affiliates Lagoven, Maraven, and Corpoven will provide funding, and the universities will provide the technical skills.

Universidad del Oriente has been assigned Jobo field; Universidad del Zulia has been assigned Mara field; and Universidad Central de Venezuela has been assigned Tocororo field.

The Pdvsa affiliates and universities are to create business entities using a 70-30 share arrangement for affiliate and institution, respectively.

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