INDUSTRY BRIEFS

Exploration

Repsol Exploracion Egipto SA and partners' wildcat on Khalda concession in Egypt's Western Desert gauged a combined flow of 40 MMcfd of gas and 1,177 b/d of condensate in tests of 199 ft of net pay in 1 Shams NE well. Jurassic Ras Qattara formation flowed 15.1 MMcfd through a 1 in. choke with 793 psi flowing tubing pressure from 59 ft of net pay at about 13,050 ft. The shallowest of three Jurassic Khatatba zones flowed 9.4 MMcfd and 1,033 b/d of condensate through a 48/64 in. choke with 683 psi flowing tubing pressure from 62 ft of pay at about 11,930 ft. Interests are operator Repsol 50%, Apache Corp. 40%, and Samsung Co. Ltd.10%.

Manitoba

launched a second offering under its Petroleum Exploration Assistance Program (OGJ, Jan. 8, p. 76). Applications are due Sept. 1. Projects must be started by Jan. 1 and completed by Mar. 15. About $500,000 in funding is available.

Gas marketing

European Commission requested opinions from governments, gas producers, consumers, and industry employees on the proposed internal market for natural gas. Commissioners want submissions ahead of European Council negotiations in the autumn. Earlier, EC ministers put gas market plans on hold because of irreconcilable differences among members (OGJ, May 13, Newsletter).

Companies

Kuwait Petroleum Corp. (KPC) appointed investment bank Robert Fleming & Co. Ltd., London, to handle sale of its Santa Fe Exploration (U.K.) Ltd. unit. Santa Fe U.K. holds KPC's exploration and production assets in the U.K. and Ireland, but affiliated company Santa Fe Drilling is not for sale (OGJ, July 15, p. 33).

Drilling-production

Elf Congo and partners' 2 Moho Marine appraisal well flowed 4,700 b/d of oil through a 28/64 in. choke in Moho field in 2,200 ft of water in Haute-Mer concession about 9 miles off the Congo. Interests are operator Elf 51%, Chevron Overseas (Congo) Ltd. 30%, Hydrocongo 15%, and Engen Exploration (Congo) Ltd. 4%. Haute-Mer acreage includes N'Kossa field, which is producing more than 70,000 b/d of oil, well beyond early projections.

BP Exploration Operating Co. Ltd. let a $7.5 million contract to Brown & Root AOC Ltd., Aberdeen, for engineering support during development of Schiehallion field. The contract includes development of maintenance systems, operating procedures, a safety management system, engineering and technical integrity programs, and input to the safety case. Schiehallion is being developed using a production and storage ship, currently being built in Belfast (OGJ, June 19, 1995, p. 26).

Timberline Resources, Denver, and partners spudded the first of six planned wells in the 1,280 acre Blue Duck field area in Park County, Wyo. Wells in the field are expected to produce from Permian Phosphoria, Pennsylvanian Tensleep, and Triassic Dinwoody strata. Interests are operator Timberline 31% and Great Basin Petroleum Inc., Salt Lake City, 25%, among others.

Dana Petroleum plc, London, bought Antra Ltd. for $2.55 million plus 13.5 million shares of Dana stock. The deal gives Dana a 5% share of Evikhon, a Russian company with interest in several oil fields in western Siberia. Evikhon's main asset is a 50% interest in Shell Salym Development BV joint venture, currently developing three fields with estimated reserves of 500-750 million bbl of oil.

BHP Petroleum Ltd. sold its equity in U.K. North Sea Blocks 21/12 and 21/13a to British-Borneo Oil & Gas Ltd., Seafield Resources plc, and Santa Fe Exploration (U.K.) Ltd. BHP's 41.7369% interest in Block 21/12 was split 13.9123% to British-Borneo, 18.5497% to Santa Fe, and 9.2749% to Seafield. BHP's 44.994% stake in Block 21/13a was taken 14.998% by British-Borneo, 19.997% by Santa Fe, and 9.999% by Seafield. Shell U.K. Exploration & Production operates the tracts.

Shell Tulpar Development BV and Japan Kazakhstan Petroleum Co. Ltd. (JKP) acquired a 50-50 farmout of half of Mobil Corp.'s 50% interest in Kazakhstan's Tulpar block. Mobil is leading exploration of the 4 million acre block in Northwest Kazakhstan on trend with Russia's Karachaganak and Orenburg gas fields. Exploration began late last year and is to be completed in September. Kazakh companies hold the remaining interests.

Shell Exploration & Production Namibia BV spudded 4 Kudu well to appraise Kudu gas discovery in license area 2814A off Namibia. Petrobras XVI semisubmersible rig in the next 3 months is to drill the well to 4,750 m TD, at which time Shell aims to flow test Kudu gas reservoirs. Well results are to be incorporated into an appraisal and development plan for Kudu to determine requirements for further drilling and help give a more accurate cost estimate to bring the gas to market.

Shell U.K. Exploration & Production plans to award an engineering, procurement, fabrication, and installation contract to Trafalgar John Brown Oil & Gas Ltd. (TJB) for a new platform to be installed in U.K. North Sea Galleon field. Jacket and topsides for the unmanned Galleon platform will weigh 760 and 970 metric tons, respectively. TJB expects to begin fabrication of the platform in November at its Methil yard in Scotland for installation in late 1997. Shell reportedly expects approval next month for the new platform.

Amoco Norway Oil Co. let a $56 million contract to ABB Offshore Technology AS, Sandnes, Norway, for modifications to Valhall field production facilities that will enable Valhall exports to be rerouted to the new transportation platform being installed in Ekofisk field following seabed subsidence under existing platforms. ABB's work is to include equipment restoration, tie-ins and surface pipeline work, along with tendering for a new compressor module and upgrading safety systems.

Elf Exploration U.K. plc let contract for an undisclosed sum to Saipem U.K. Ltd., London, for design, fabrication, and installation of wellhead platform jackets in the North Sea's Elgin and Franklin gas condensate fields. Saipem subcontracted design and engineering work to Tecnomare SpA, Venice, and fabrication to Lewis Offshore Ltd., Stornoway, U.K. Elgin, on Block 22/30c, is to be developed with a production, utilities, and quarters platform and wellhead platform linked to a wellhead platform in Franklin on Block 29/5b. Elf plans to install the jackets in second half 1997. First production from the fields is slated for 2000.

U.S. Minerals Management Service revised its guidelines under which lease operators may obtain suspensions of production and suspensions of operations. The change is intended to clarify MMS' willingness to give operators more time for geophysical acquisition and analysis, in addition to the usual suspensions for rig delays, lack of rig availability, and unexpected bad weather.

Refining

American Petroleum Institute reported the four biggest U.S. refiners account for 26.8% of the domestic market, the lowest concentration ratio since 1948, when data collection began. Although the U.S. has 175 active refineries, 25 fewer than in 1993, total operating capacity has not changed substantially.

U.S. Commerce Department's Foreign Trade Zones Board approved subzone status for refineries operated by Shell Oil Co. at St. Charles Parish, La., Sun Co. Inc. at Philadelphia, Marathon Oil Co. at Texas City, Tex., and Star Enterprise at Newcastle County, Del. Also, Texaco Inc. and Sun Co. filed applications with the board for their refineries at Anacortes, Wash., and Yabucoa, P.R., respectively.

Total Petroleum Inc., Denver, in early September will discontinue crude processing at its 56,000 b/d Arkansas City, Kan., refinery, fulfilling a December 1995 disclosure to sell or close the plant by yearend 1996. About 15 of the refinery's 187 employees will remain to operate the facility as an asphalt terminal and gasoline and diesel fuel blending and storage complex. Total expects no change in its Kansas or Oklahoma oil gathering operations as a result of the closure.

Tankers

U.S. Coast Guard issued a final rule setting measures operators of single hulled oil tankers must follow to avoid oil spills. The rule includes requirements for bridge operations and procedures, maneuvering performance tests, and other measures.

Environment

China is sharpening its focus on detrimental effects of oil and gas exploration and production in the country as part of an effort to tighten environmental controls. Upstream companies already face a complicated planning and permitting procedure in China.

U.S. Interior Department's Green River Basin Advisory Committee issued three recommendations regarding oil industry operations in the Green River, Wyo., area to Interior Sec. Bruce Babbitt. The panel said Interior should streamline the environmental analysis process required by the National Environmental Policy Act (NEPA); allow operators relief from NEPA-related costs, as well as mitigation and monitoring activities that exceed routine measures; and set a policy limiting road construction to no more than necessary to accommodate a project proposal.

LDCs

Houston Industries Inc. agreed to buy NorAm Energy Corp., Houston, in a $3.8 billion deal that would form the second largest gas/electric utility in the U.S. The combined company, prompted by the quickening pace of consolidation among gas and electric utilities, would transport, sell, or burn about 12% of the gas consumed in the U.S. In April 1996, Texas Utilities Co., Dallas, agreed to pay $1.7 billion to acquire Enserch Corp., also of Dallas.

Pipelines

CMS Gas Transmission and Storage Co. (Cmsgts) unit of CMS Energy Corp., Dearborn, Mich., began operating Little Bear Pipeline in northern Michigan. The $13.6 million, 46 mile Little Bear system can transport as much as 75 MMcfd of gas from Antrim formation wells. The pipeline connects wells in Alpena, Montmorency, and Otsego counties with Cmsgts gas processing plants in Chester Township, Otsego County, where the company extracts carbon dioxide.

Colorado Interstate Gas Co. (CIG), Colorado Springs, Colo., has begun construction of Parachute Creek lateral, a 37 mile, 16 in. pipeline to connect CIG's transmission system at Greasewood compressor station to gathering and pipeline systems near Parachute, Colo., on the western slope of the Rocky Mountains. Service is expected by Sept. 30. Gas Research Institute estimates Piceance basin potential gas reserves in the area at more than 22 tcf.

Columbia Gas Transmission Corp. is accepting bids from parties interested in buying its Pennsylvania gas gathering network, including 40 miles of pipeline and related facilities in Indiana County; 130 miles of pipeline and facilities in Armstrong, Clarion, Jefferson, and Elk counties; and 150 miles of line and facilities in Fayette, Greene, and Washington counties.

Iroquois Gas Transmission System sought Federal Energy Regulatory Commission approval to add a compressor station at Athens, N.Y., to its 375 mile system from Canada to Long Island. The station, powered by a 9,500 hp gas turbine unit and associated facilities, will boost system capacity by 30 MMcfd for two customers, ProGas USA Inc. and Coastal Gas Marketing Co. Another 5 MMcfd will be made available beyond these firm commitments. Iroquois wants to begin construction on the $22 million project by spring 1997 and put new facilities in service in November 1997.

Unocal Corp. and Delta Oil Co. of Saudi Arabia agreed in a memo of understanding with Russia's Gazprom and Turkmenistan's Turkmenrusgaz to build a 900 mile pipeline from Turkmenistan's Dauletabad field across Afghanistan to central Pakistan. Cost of the 2 bcfd pipeline is estimated at $2 billion, including development of marketing outlets in Pakistan. Under the definitive agreement to be negotiated, Gazprom is to have 10% interest in the group and Turkmenrusgaz 5%, with Unocal and Delta holding the remaining 85%.

Petrochemicals

Lyondell Petrochemical Co., Eastman Chemical Co., Quantum Chemical Corp., and Union Carbide Corp. signed a letter of intent to build a 2 billion lb/year ethylene plant at Lyondell's Channelview, Tex., petrochemical complex. The feed slate will include ethane, butane, and propane. Start-up is scheduled for mid-2000. Final corporate approvals are expected by yearend.

Marketing

Saudi Arabian Oil Co. notified Royal Dutch/Shell and British Petroleum Co. plc. that it plans beginning January 1997 to take over marketing of Saudi Arabian oil under a deal arranged by British and Saudi officials to pay for military equipment. Shell and BP reportedly would lose commissions on 400,000 b/d of crude that they have been handling for the past 10 years under the Al Yamamah oil-for-arms deal. U.S. Defense Department issued an interim rule regarding its purchase of fuels from refiners in the Caribbean basin, noting a recent law requires it to consider all qualified bids from any eligible country under the Caribbean Basin Economic Recovery Act as if they were offers from designated countries under the Trade Agreements Act.