LG&E Energy Corp., Louisville, will pay $140 million to acquire interests in two Argentine local gas distribution companies (LDCs) from current shareholder Argentina's Sideco Americana SA, which will retain an equity interest in both LDCs. Deal provides LG&E a controlling interest in and management of Distribuidora de Gas de Centro, which serves more than 340,000 customers in the provinces of Cordoba, Catamarca, and La Rioja, and a minority interest in Distribuidora de Gas de Cuyana, which serves more than 280,000 customers in the Mendoza, San Juan, and San Luis provinces. Purchase, subject to shareholder and regulatory approvals, is to close in January 1997.
Mexico is soliciting bids to develop and operate a natural gas distribution network in Toluca, capital of the state of Mexico, and surrounding communities. Total private investment is expected to be $90 million. Current demand in the zone is 20 MMcfd, which could increase to 50 MMcfd by 2000, officials said. Toluca is served by a 10-in. pipeline operated by state-owned Petroleos Mexicanos. Mexico's government recently established other gas distribution zones in Nuevo Laredo and Sonora (OGJ, Nov. 25, p. 37, and Dec. 9, p. 37).
Drilling-production
Norsk Hydro AS let contract to Umoe Haugesund AS, Haugesund, Norway, for engineering, procurement, and construction of a steel production semisubmersible for installation in Troll field. The $605 million contract calls for tow-out in June 1999, with first oil slated for September 1999. Troll C platform will deplete a thin oil layer in the West Troll gas province (OGJ, Sept. 2, p. 32). The platform will have capacity to produce 125,000 b/d of oil.
Berry Petroleum Co., Taft, Calif., acquired San Joaquin Production Co. from Exxon Co. U.S.A. for about $49.5 million cash. Principal assets are the Formax properties on lands adjacent to Berry's existing holdings in California's South Midway Sunset field, including about 200 acres with 130 wells currently producing 1,050 b/d of heavy crude. Berry plans full development of the properties beginning early in 1997. Earlier this year, Berry acquired Tannehill Oil Co. Inc., also of Taft, for $25.2 million (OGJ, Sept. 2, p. 40). Berry said the acquisitions increase its reserves to more than 100 million bbl and total production to about 12,000 b/d.
BP Exploration Operating Co. Ltd. let contract to Sub Sea Offshore Ltd., Aberdeen, a unit of Dresser Industries Inc., Dallas, for installation of subsea facilities and the floating, production, storage, off- loading (FPSO) system on the Schiehallion development project west of Shetland in 450 m of water (OGJ, Nov. 4, p. 34). Scope of work includes installing 70 km of steel pipeline, flexible jumpers, and control umbilicals from the FPSO to the drill centers. Sub Sea also will design and install the FPSO mooring system and conduct the tow-out.
Norcen Energy Resources Ltd., Calgary, paid Flores & Rucks Inc., Baton Rouge, $37.2 million to acquire an additional 20% interest in a South Marsh Island area oil and gas field off Louisiana. The purchase increases Norcen's interest in the SMI Block 269 field to 39%. It has net production of 9.5 MMcfd of gas and 1,050 b/d of crude.
Fountain Oil Co., Houston, registered a joint oil production venture, Borislav Oil Co., with Ukraine's Ukrneft to develop Stynavskoye oil field near Borislav in the Lviv region. Cost of the project is estimated at $180 million.
Far East Levingston (Shipbuilding) Ltd. (FELS), Singapore, bought Safe Gothia accommodation semisubmersible from Safe Rigs Ltd., Aberdeen, for $40 million. FELS plans to convert the rig for deepwater drilling and has begun marketing it. Gothia is to arrive at the FELS yard in March 1997.
Clyde Petroleum plc, Ledbury, U.K., plans to make U.K. North Sea Blocks 9/14b East and West its first operated U.K. development and is studying development options with a view to first production in mid-1998. Clyde said the western area contains an Eocene oil discovery with estimated reserves of 20 million bbl. Clyde purchased the blocks from BP Exploration Operating Co. Ltd. and BHP Petroleum Ltd., for $7 million cash plus $7 million on first production.
Cogeneration
Humber Power Ltd., Humberside, U.K., let a $270 million contract to ABB Power Generation, Baden, Switzerland, for expansion of South Humber Bank power station. The new unit is under construction and expected to begin operation early in 1997 with 750-MW output capacity. Contract calls for installation of two new gas turbines and heat recovery steam generators, one steam turbine, and two electrical generators, with combined output capacity of 510 MW. The new unit is to start up by yearend 1998.
Terminals
Texaco North Sea U.K. Co. let contract to BP Exploration Operating Co. Ltd. for handling crude oil from Captain field, due on stream early in 1997, at Nigg terminal in Cromarty Firth, Scotland. Captain crude will arrive at Nigg in shuttle tankers. Crude will be stored in a dedicated tanker or transferred directly to another tanker if required. Talisman Energy (U.K.) Ltd. is to become operator of Nigg terminal early in 1997, having bought BP's share in the complex. Captain output is expected to peak at 65,000 b/d.
Exploration
China National Offshore Oil Corp. signed an exploration agreement with Kerr-McGee China Petroleum Ltd., a unit of Kerr-McGee Corp., Oklahoma City, for contract area 27/11, which covers about 756,000 acres in China's Pearl River Mouth basin in the South China Sea. Kerr-McGee, operator, has a 50% interest. Partners are units of Houston firms Santa Fe Energy Resources Inc. 40% and Sino-American Energy Corp. 10%. Contract is subject to approval by the Chinese Ministry of Foreign Trade and Economic Cooperation.
Dover Technology Inc. mobilized the Sonat DE-97 semisubmersible unit to drill the 1 Gladden exploratory well about 25 miles off southern Belize in 950 ft of water. The unit recently left the Gulf of Mexico in tow to the drill site, where operations will proceed through January 1997. Dover, operator, holds a 20% interest in the project. Other participants are Fina Exploration Belize BV 30%, Magellan Petroleum (Belize) Ltd. and Deminex Belize Petroleum Ltd. 20% each, Mountain States Petroleum Corp. 5%, and Magellan Petroleum Corp. and Mallon Production Co. 2.5% each.
Saga Petroleum AS postponed drilling of a Barents Sea wildcat because of delays with the Transocean Arctic semisubmersible, currently drilling in the Norwegian Sea. Saga said the 7219/8-2 well will now be spudded in August 1997, after consultation with state firm Den norske stats oljeselskap AS (Statoil). Saga and Stat- oil were both due to drill Barents Sea wells this winter using the rig, but results of Stat- oil's planned 7228/7-11 well are said to be more important in view of Saga's plans to apply for new licenses in the area.
Enterprise Oil plc, London, found oil on U.K. North Sea Block 13/21a, 2 km west of Captain field. Enterprise said the 13/21a-4 well cut a significant oil column but was plugged and abandoned without testing. A 3D seismic survey over the discovery is planned in 1997. License partners are operator Enterprise 51.4%, Amerada Hess Ltd. 28.6 %, and Mobil North Sea Ltd. 20%.
Elf Petroleum Isle of Man BV, a unit of Elf Aquitaine group, is using the Glomar Adriatic XI jack up to drill a rank wildcat on Block 112/19, 21/2 miles northeast of Point of Ayre in territorial waters of the Isle of Man. Operator Elf and partners were awarded five Isle of Man blocks in the government's first licensing round in July 1995, including Blocks 112/13, 112/14, 112/15, 112/19, and 112/20. Elf has a 35% interest. Other interests are held by Enterprise 35% and Amerada Hess 30%.
Ottawa's Indian and Northern Affairs Department called for exploration bids on 11 parcels covering more than 2.47 million acres in the Central Mackenzie Valley of Canada's Northwest Territories. Bidding will close May 1, 1997. Sealed bids must be delivered to NEB.
Qatar will open three new blocks as part of plans to increase production capacity to 700,000 b/d by 2000. Areas to be opened are offshore Block 7 east of Doha and onshore Blocks 2-North and 2-South, according to a local press report quoting an official of Qatar General Petroleum Corp. (QGPC). The report said QGPC is discussing with foreign firms award of an exploration contract for Block 7 and plans to open more onshore acreage once these talks are complete. Amoco Corp. previously operated Blocks 2-South and 2-North, but relinquished the acreage after lack of success.
Taxes
U.S. Internal Revenue Service issued a rule allowing oil companies to continue claiming a foreign tax credit against their U.S. taxes on income from oil produced overseas and sold domestically. In response to a Tax Court ruling, IRS dropped its 100% allocation regulation, under which income from production is attributed entirely to the operations in the foreign country.
Refining
U.S. Environmental Protection Agency said Hess Oil Virgin Islands Corp. agreed to pay $5.3 million in fines for illegally transporting hazardous wastes. EPA said Hess admitted it falsely declared shipments of 1,402 drums of spent refinery catalyst were nonhazardous. The 55-gal drums were shipped to Arizona, where the catalyst was used as a source of alumina in the manufacture of Portland cement.
Copyright 1996 Oil & Gas Journal. All Rights Reserved.
