INDUSTRY BRIEFS

Alternate fuels

Japan's Ministry of International Trade & Industry will cooperate with China in a coal to gasoline project based on cheap supplies of Chinese coal. A meeting this month is expected to lead to a committee to look into coal types for liquefaction and a project site. Plant construction could begin in 2001. Capital costs are an estimated $1.9 billion.

Labor

Norway's offshore workers ended a strike May 9 after 6 days. The action by oil company staff on some of Norway's largest production platforms was in sympathy with contract workers on mobile installations striking for pay rates comparable to fixed platform crews. Norwegian Oil Industry Federation expected the strike to cut Norway's oil production by 50% and gas production by 40% (OGJ, May 6, Newsletter).

Gas processing

Occidental of Bangladesh licensed Institut Francais du Petrole's (IFP) Ifpexol technology for use in a gas processing plant it plans to build in Jalalabad gas field near Sylhet, Bangladesh. Plans call for the plant to start up in 1997 at initial throughput of 125 MMscfd, expandable to 250 MMscfd. The Ifpexol process includes dehydration, deacidification, and liquids recovery. IFP also will provide technical assistance for plant design, manufacturing, installation, and start-up.

Pembina Resources Ltd., Calgary, is closing its 19.9 MMcfd Diamond Valley gas processing plant about 6 miles southeast of Black Diamond, Alta. The company said gas previously dedicated to the Diamond Valley plant will be processed at another plant but did not elaborate.

Petrochemicals

Norsk Hydro and Elf Atochem agreed with Qatar General Petroleum Corp. (QGPC) to build a $500 million, 798,000 metric ton/year complex in Qatar to produce caustic soda, dichloro- ethane, and vinyl chloride for the Asian market. The complex is due on stream in 1999. Interests are QGPC 51% and Hydro/Elf 49%, split two thirds Hydro and one third Elf.

Polyethylene Malaysia Sdn. Bhd., a 60-40 venture of BP Chemicals Ltd. and Malaysia's state owned Petronas, plans to build a 45,000 metric ton/year polyethylene plant at Kertih on peninsular Malaysia's northeast coast. Plant output will be used to make gas and water distribution pipe. The new unit will be an expansion of the venture's existing 200,000 ton/year polyethylene plant at Kertih. Construction is to start at yearend.

Tankers

National Shipping Co. of Saudi Arabia (Nscsa) took delivery of the second of five very large crude carriers ordered from Japan's Mitsubishi Corp. under a 5 year, $480 million fleet expansion program. Nscsa agreed with state owned Saudi Aramco Oil Co. to transport Saudi crude to market, marking the first time the Saudi shipping firm will transport oil. Nscsa is the world's biggest petrochemical transporter. Delivery of the other three tankers will occur between August 1996 and early 1997.

Drilling-production

Phillips Petroleum Co. and partners' $29.5 million 4 Mahogany appraisal well in the Gulf of Mexico's subsalt Mahogany oil field cut more than 180 ft of gross pay at 14,976-15,158 ft, increasing Phillips' previous estimates of field reserves. The well, drilled to 19,094 ft, was not tested and will be temporarily abandoned and completed as a producer after platform installation this summer. Plans call for the next Mahogany appraisal well to start immediately, with drilling to continue to the end of June ahead of platform and pipeline installation. The field is to start up in December.

BP Exploration & Oil Inc., Marathon Oil Co., and Shell Offshore Inc. approved plans to develop Troika oil and gas field on Green Canyon Blocks 200, 201, 244, and 245 in about 2,700 ft of water 150 miles southwest of New Orleans in the Gulf of Mexico. Reserves are estimated at more than 200 million bbl of oil equivalent. Plans call for five subsea development wells tied back to Shell's Bullwinkle platform 15 miles north on Green Canyon Block 65. Production is to begin late in 1997 and build to 80,000 b/d of oil and 140 MMcfd of gas.

Final phase construction is under way on Esso Australia/BHP Petroleum Pty. Ltd.'s concrete gravity platforms for their $800 million development of Bream B and West Tuna oil fields in Australia's Bass Strait. The combine installed the module support frame for West Tuna on its concrete base at Port Kembla, N.S.W. Next comes installation and hookup of topsides built at Newcastle, N.S.W. Ten steel modules have been built at Newcastle for the two platforms.

Amoco (U.K.) Exploration Co. let a 7 million, 7 year contract effective May 1 to Kvaerner Oil & Gas Services Ltd., Aberdeen, for management and operation of its marine base at Great Yarmouth, U.K. Amoco supports its southern North Sea gas exploration and production operations from there.

Kerr-McGee Oil (U.K.) plc hired McDermott Marine Construction Ltd. to conduct a preliminary engineering study for development of Janice field on U.K. North Sea Block 30/17a. A number of options are under study, but a production, storage, and offloading vessel is preferred. Janice, in 80 m of water, holds estimated reserves of 20 million bbl of oil.

Norsk Hydro AS submitted to Norway's Ministry of Industry & Energy a plan for development and operation of its East Oseberg discovery in the Norwegian North Sea. The field, 27 km northeast of Oseberg field center, has estimated reserves of 145 million bbl of oil. License partner Saga Petroleum AS said East Oseberg will be developed with a steel platform with first stage processing, drilling, and accommodation units. A $500 million development is expected to lead to oil production in October 1998. Production will move by pipeline to Oseberg center for final processing and transport to Sture terminal near Bergen, Norway.

Coplex Resources NL, Hobart, Tasmania, exercised its option to acquire a 5% interest in Yemen's East Shabwa concession. The block contains two oil fields, Kharir and Northwest Atuf, that are to be placed on stream at a combined rate of about 20,000 b/d. The license is operated by Comeco Petroleum Inc., in which Coplex holds a 17.5% interest. License partners are Comeco, Total Yemen, and Unocal Yemen Ltd. 28.57% each and Kuwait Foreign Petroleum Exploration Co. 14.29%.

Statoil U.K. Ltd. plans to acquire 3D seismic data this summer on Block 26/28a off western Ireland where it acquired Connemara field, Ireland's only offshore oil strike. The survey will help pinpoint the best site for a Connemara appraisal well to be drilled in 1997. Results from the well will be crucial for a development decision on Connemara, originally deemed noncommercial but looking increasingly viable as a floater development (OGJ, June 5, 1995, p. 17). Statoil acquired Connemara in its takeover of Dublin's Aran Energy plc last year.

U.S. Minerals Management Service scheduled a meeting June 12-14 in Denver so a government-industry negotiated rulemaking committee can reconsider the valuation of gas produced from federal lands for royalty purposes. The panel had recommended gas values be tied to an indexing system. MMS had proposed a rule last November but has received many negative comments.

Exploration

Chevron Corp. plans to conduct more seismic surveys and possibly drill another wildcat on its Rio Blanco block in Colombia's Llanos basin after its widely publicized 1 Anaconda wildcat failed to find commercial hydrocarbons. Speculation was rife in Colombia last month that Chevron may have a giant field strike when the Anaconda test logged hydrocarbon shows on a giant structure on the block, just southwest of Colombia's supergiant Cusiana-Cupiagua complex (see map, OGJ, May 6, p. 50).

Premier Oil plc, London, and partners signed a contract with Indonesia's state owned Pertamina for exploration of the Pangkah block off East Java. The 3,500 sq km block lies in one of Central Java's most prolific hydrocarbon basins south of Camar field and adjacent to KE-5 gas field, Poleng gas and oil field, and KE-2 oil field. Work commitments the next 3 years include extensive seismic data reprocessing, seismic data acquisition, and drilling of one well. Interests are operator Premier 40%; Amerada Hess (Indonesia-Pangkah) Ltd. 36%, and Seafield Resources (Indonesia) LLC 24%.

MMS proposed a rule change allowing it more than 90 days to review bids for offshore oil and gas tracts. It wants another 30 days to review bids, especially after large sales are held, and said the alternative would be for it to reject bids it cannot evaluate.

Pipelines

Phoenix Natural Gas Ltd., Belfast, started laying a 26 km gas pipeline from Ballylumford to Tory Town in Northern Ireland to connect with a new pipeline installed to carry gas to the province across the Irish Sea from Scotland. To be complete by November, the pipeline is being laid by Alfred McAlpine Ltd., Ellesmere Port, U.K., and Brown & Root Ltd., London, under a $13 million contract. It will enable industry's first delivery of natural gas to Northern Ireland.

Gas storage

CNG Transmission Co., Clarksburg, W. Va., filed for Federal Energy Regulatory Commission approval for two gas storage/transportation projects to begin service in November 1997. Its $54 million Seasonal Service Expansion project will add firm transportation capacity of 101 MMcfd and storage service of about 9 bcf of storage capacity and 165 MMcfd of deliverability through installation and/or leasing of pipeline, compression, and storage facilities in the U.S. Northeast. The $28 million Avoca transportation project calls for installation of pipeline and compression facilities to transport 88 MMcfd for customers of the Avoca salt cavern storage site under development near Avoca, N.Y.

Companies

Great Lakes Chemical Corp., West Lafayette, Ind., made a $695 million (Canadian) takeover bid for Nowsco Well Services Ltd., Calgary. The bid is about $90 million higher than a competing offer from BJ Services Co., Houston (OGJ, Apr. 15, p. 37). Great Lakes said if its offer is accepted Nowsco will remain intact, existing management will continue, and there will be no layoffs. Nowsco's board unanimously ap- proved the Great Lakes offer.

Preem Petroleum AB is the new name for Sweden's OK Petroleum Group. The change coincides with Preem taking control of Texaco AB's retail network, giving Preem a total of 530 service stations in Sweden. Preem also has exploration and production interests in the U.K., Norway, Latvia, Lithuania, and Angola with net output of 20,000 b/d. Its Scanraff and Gothenburg refineries in Sweden have a combined 270,000 b/d capacity.

Petro-Canada reported a $100 million (Canadian) lawsuit over a former aviation fuel business has gone to trial in Toronto. The trial deals with allegations the company manipulated a contract to force a former competitor, Texaco Canada Ltd., out of the aviation fuel business. Texaco Canada was acquired by Imperial Oil Ltd., Toronto, in 1989.

Ranger Oil Ltd., Calgary, will sell about $50 million (Canadian) worth of noncore Canadian properties this year and is continuing to develop its assets in the North Sea and elsewhere outside Canada, notably Angola and South America. Many of the noncore assets to be sold were acquired in a 1995 takeover of Czar Resources Ltd., Calgary. Ranger predicts a 25% increase in its production this year to about 45,000 b/d of oil equivalent. It plans to spend $134 million (U.S.) this year on exploration and development.

Canadian Occidental Petroleum Ltd., Calgary, plans $600 million (Canadian) in capital spending in 1996 and is increasing its ceiling for higher risk exploration ventures. CanOxy doubled its limit on higher risk capital spending to 20%, although budgeted 1996 outlays will be about $40 million, below the new limit. Pres. David Hentschel said one such project is an 18.75% interest in a wildcat under way off western Newfoundland, targeting a world class structure.

Government

Alberta's government is introducing widespread changes to streamline land administration and leasing for companies. Energy Minister Pat Black said a key aim is to cut regulatory red tape and reduce paperwork and costs for industry and government. Some changes will take effect immediately, while others will require amendments to the province's Mines & Minerals Act. One change is that instead of having to reapply for leases, continuation of operations will be automatic for a specific amount of land.

Spills

MMS o longer will require reporting of oil spills less than 1 bbl effective May 31, cutting the number of spills reported to it by 95%. Under current rules, lessees and operators must report directly to MMS all oil spills from offshore facilities, regardless of volume. MMS said the change will reduce industry's reporting requirements without compromising environmental protection.

Refining

U.S. Occupational Safety & Health Administration reported Lyondell-Citgo Refining Co. will pay $200,000 in fines for a Nov. 21, 1995, accident at its Houston refinery that affected 100 contract workers. OSHA said disulfide oil passed through a flare and ignited. The resulting fumes caused respiratory system irritation and required medical attention for the workers.