INDUSTRY BRIEFS

Exploration

Ottawa's Northern Oil and Gas Directorate is seeking exploration bids on 247 million acres of arctic land in the Mackenzie Delta, Beaufort Sea, and the Arctic Islands. Companies have until Apr. 12 to nominate blocks. Bidders will be granted two part, 9 year permits. They will be required to drill at least one wildcat in the first part to hold the license to full term. Seven exploration licences have been granted in the region since 1989.

Oilsands

Solv-Ex Corp., Albuquerque, N.M., signed an initial agreement with Ledcor Industries Ltd., Edmonton, to build an oilsands extraction and upgrading plant at Fort McMurray, Alta. Solv-Ex plans to spend $170 million to develop a 14,000 b/d bitumen extraction and processing operation that includes extracting alumina as a coproduct.

Gas processing

Mobil North Sea Ltd. let a $60 million contract to Fluor Daniel Ltd. for expansion of its St. Fergus gas terminal north of Aberdeen. Fluor will design, procure, build, and commission a 740 MMcfd plant to process gas from Britannia field, due on stream in October 1998.

Alternate fuels

Bitor Europe Ltd. agreed to supply Danish electricity generator SK Power 7.5 million metric tons of Orimulsion boiler fuel for use at its Asnaes plant on the Danish island of Zeeland. The plant has used 900,000 metric tons of the Venezuelan heavy oil/water emulsion fuel since it became the first European plant outside the U.K. to burn Orimulsion (OGJ, Nov. 21, 1994, p. 37). The new contract will involve delivery of 1 million metric tons/year of Orimulsion beginning in 1997.

Drilling-production

Phillips Petroleum Co. and partners on Australia and Indonesia's Zone of Cooperation Area Block 91-13 in 240 ft of water off northern Australia will decide how to develop Bayu-Undan gas/ condensate field after drilling another appraisal well this year. The group's latest appraisal, 2 Bayu, cut 205 ft of net pay in a 492 ft column of upper Jurassic sands at an undisclosed depth. Bayu-Undan reserves are estimated at 3.5-4 tcf of gas and 175 million bbl of liquids.

Norway's Den norske stats oljeselskap AS is considering operating Gullfaks B platform in the Norwegian North Sea as an unmanned wellhead unit as field production declines. Production would be transferred to Gullfaks A, cutting operating costs in the three platform development. Statoil last year disclosed a plan to shut down one of the three production platforms in Statfjord field, another declining giant.

British Gas plc bought the oil and gas interests of Fiat RIMI SpA. The acquisition includes 50 exploration and production licenses in Italy, including onshore producing gas fields and prospective licenses in the southern Apennines, where large oil reserves have been found.

Elf Petroland BV started gas production from J3 Charlie field in Block J3a off Netherlands. The field, which extends under adjacent Block J6, was found 3 months ago with a well drilled from the Markham J6-A platform operated by Lasmo Nederland BV. The discovery well J6-A5 will be used to produce 45.5 MMcfd of gas from the field via Markham platform.

BP Exploration Operating Co. Ltd. let a multimillion dollar contract to a combine of Baker Hughes Inteq, Schlumberger, and Transocean AS for well engineering during development of Cyrus field on Block 16/28 in the U.K. North Sea. Cyrus saw early production for about a year using a production ship but is now being developed as a subsea satellite to BP's Andrew platform. Cyrus, which estimated reserves of 25 million bbl of oil, is due back on stream this summer.

Midland & Scottish Energy Ltd. let a $15 million contract to Coflexip Stena Offshore Ltd., Aberdeen, for abandonment of U.K. North Sea Block 2/10 Emerald field. Emerald was developed with a semisubmersible production system connected via flexible risers to 16 wellheads. Work will begin at the end of February and is to be complete in midsummer.

Cabinda Gulf Oil Co., a unit of Chevron Corp., let contract to Global Industries Ltd., Lafayette, La., for fabrication, delivery, and installation of the four pile Kungulo A platform for the Kungulo Pinda oil field development project in 110 ft of water off the Angolan enclave of Cabinda. Global's Cheyenne derrick-pipelay barge will install the structure and lay almost 12 miles of 20 in., 41/2 miles of 12 in., and 1 mile of 10 in. line. Global is fabricating the platform at Houma, La.

Elf Petroleum Qatar let contract to National Petroleum Construction Co. of Abu Dhabi for basic and detailed engineering, procurement, construction, and installation of a platform and related facilities for first phase development of Alkhalij oil field on Block 6 off Qatar. Work, to be complete by December, will include installation of a 411/2 km, 12 in. marine pipeline, subsea electric cable, and processing facilities on Halul Island.

Consolidated Natural Gas Co. (CNG), Pittsburgh, estimates its 1995 reserves additions at more than 200 bcf equivalent (bcfe) of gas and oil, topping estimated production of about 130 bcfe during the year. CNG expects its production to rise further in 1996 with start of production from wells drilled in a 1995 program and from Popeye field development, its first deepwater project in the Gulf of Mexico.

Louisiana Land & Exploration Co. replaced 115% of its 1995 production at a cost of $4.51/bbl of oil equivalent (BOE). LL&E also boosted worldwide production in 1995 by 10% to 36 million BOE. U.S. activity paced the gains, with LL&E replacing 155% of U.S. production in 1995 at a cost of $3.60/BOE.

Pursue Energy Corp., an affiliate of Petro-Hunt Corp., Dallas, completed its purchase for more than $30 million of Thomasville gas field and related assets in Rankin and Simpson counties, Miss., from Shell Western E&P Inc. Included are adjoining Piney Woods, Southwest Piney Woods, and Harrisville fields. They contain nine operated wells producing 38 MMcfd of gas and related gas gathering and processing facilities. Pursue also acquired all interests of Snyder Oil Corp., Fort Worth, and American Exploration Corp., Houston, in the Thomasville area. It currently operates a gas/sulfur processing plant and all other wells in the area.

Comstock Resources Inc., Dallas, signed a letter of intent to acquire privately owned Black Stone Oil Co., Houston, and interests of other working interest owners in producing and undeveloped leases in East Texas for about $103 million cash. Involved are interests in 18 producing oil and gas wells and reserves of about 92 bcf of gas and 5 million bbl of oil.

Shell U.K. Exploration & Production started production from U.K. North Sea Block 211/26 Pelican field. Pelican was developed as a subsea satellite of Cormorant Alpha platform 5.3 miles away and is intended to help extend the platform's life into the 21st century. Pelican oil is combined with Cormorant output and piped to Sullom Voe terminal in the Shetland Islands. Gas is exported through Cormorant's link to the Flags pipeline network to St. Fergus, Scotland. Pelican holds estimated reserves of 58 million bbl of oil and 30 bcf of gas and was developed at a total cost of $540 million. Pelican output is to peak at 36,000 b/d by midyear.

Gas distribution

Germany's Ruhrgas AG signed an agreement with the city of Vladimir, 100 km northeast of Moscow, and Vladimiroblgaz gas supply company to cooperate in improving gas supply and use in the city. Ruhrgas said the city could save 50% in energy use through conservation, and its local gas distribution system needs to be rehabilitated.

British Gas plc will supply gas through a 26 km pipeline it will lay to a 755,000 kw, $475 million gas fired power plant it will build in a 50-50 venture with Scottish Hydro-Electric plc at Avonmouth, near Bristol, U.K. Plant construction is to get under way in mid-1996, with commercial operation slated for yearend 1998.

Companies

Occidental Petroleum Corp. will restructure its MidCon Corp. unit, cutting about 400 jobs in an effort to save $50 million/year. That's in addition to a largely completed reorganization of Oxy's worldwide oil and gas operations based in Bakersfield, Calif., that will eliminate 650 jobs and save $100 million/year.

Executives of National-Oilwell (NOW), Houston, and Duff & Phelps-Inverness and First Reserve Funds, both of Greenwich, Conn., are primary equity partners in NOW after completing a $180 million management led buyout from Armco Inc. and USX Corp., both of Pittsburgh.

Foster Wheeler International Corp., Clinton, N.J., and Tecnica Nacional de Engenharia SA (Tenenge), Rio de Janeiro, formed a combine to pursue process industry engineering, procurement, and construction projects in Brazil. The integrated joint venture will target projects in the oil, gas, refining, petrochemical, chemical, pharmaceutical, and power industries. Headquarters will be at Tenenge's office in Rio de Janeiro.

Refining

Consumers' Co-operative Refineries Ltd. (CCR) combined UOP feed distribution and reactor riser termination technology in a revamp of a stacked 17,600 b/d fluid catalytic cracking unit at its 45,200 b/d Regina, Sask., refinery to increase yields of pentane and lighter liquids and lower output of dry gas. The project marked the first application in Canada of the UOP processes and the world's first combined applications of the two technologies.

Spills

Vessels directed by the U.S. Coast Guard at presstime last week had lightered all but about 35,000 bbl of heating oil from the North Cape barge off Point Judith, R.I., that spilled about 20,000 bbl of heating oil after it ran aground Jan. 19 during a heavy storm. Containment booms were deployed, but skimming efforts were hampered by rough seas. The barge, owned by Eklof Marine Corp., Staten Island, N.Y., was carrying about 95,000 bbl of heating oil from New York to Providence, mainly for Northeast Petroleum Co., a unit of Cargill Inc., Boston.

Exxon Corp. settled its suit against underwriters led by Lloyd's of London to recover insurance for part of its expenses as cargo owner in the 1989 Exxon Valdez tanker oil spill off Alaska. The underwriters will reimburse Exxon $300 million for costs associated with the spill. Exxon has other substantial Valdez spill related insurance claims with the underwriters that remain unresolved. Trial on a lawsuit related to those claims is set for Apr. 8 in Harris County, Tex.

Emergency Response Strike Team Inc. (ERST), a unit of Unocal Corp., agreed to provide emergency response and spill management services for 45 tankers, ranging from medium size products carriers to very large crude carriers, under retainer from Maritime Overseas Corp., New York, and Kent Lines, New Brunswick.

Pipelines

Canada's National Energy Board scheduled a Mar. 11 hearing in Vancouver, B.C., on a toll application by Westcoast Energy Inc., Vancouver. Westcoast is seeking a pipeline toll increase of 17% from 1995 tolls for gas shipments to a border export point near Huntingdon, B.C. NEB has approved an interim increase of 9% effective last Jan. 1.

Leviathan Gas Pipeline Partners LP agreed with Phillips Petroleum Co., Anadarko Petroleum Corp., and Amoco Production Co. to gather all gas produced from Mahogany field, a subsalt discovery on Ship Shoal Blocks 349 and 359 about 80 miles off Louisiana in 370 ft of water. Leviathan will own about 9 miles of new 16 in. pipeline linking Mahogany to its LOGS system, for redelivery through LOGS and its recently completed interconnect with the Manta Ray system. Deliveries are to begin in December.

Columbia Gas Transmission Corp. plans to file an application in February with the Federal Energy Regulatory Commission to expand its firm transportation and storage capacity by about 500 MMcfd during 3 years starting in 1997 at a cost of $400 million. About half the expanded service is to start up Nov. 1, 1997, and about 85% of the expansion is for firm storage and firm storage transportation services, mainly for local distribution companies.

LNG

Transcontinental Gas Pipe Line Corp., Houston, and PECO Energy Co., Philadelphia, plan to build and operate a liquefied natural gas peak shaving plant at a site to be determined in Transco's market area of Pennsylvania, New Jersey, Delaware, and New York. Plans call for an LNG storage capacity of as much as 4 bcf with vaporization capacity of 400 MMcfd. Cost is an estimated $125 million. Service to Transco system customers is slated to begin in 2001.

Petrochemicals

Chevron Corp. approved a $267 million plan to modernize and expand to 1.7 billion lb/year from 1 billion lb/year Chevron Chemical Co.'s ethylene plant at Port Arthur, Tex. Almost all of the added capacity will support Chevron derivatives production, mainly polyethylene and normal alpha olefins. Conversion of facilities is expected at yearend 1997.

Marketing

Statoil began to sell gasoline containing 2% benzene vs. the European benzene norm of 5% at its service stations in eastern Norway and Copenhagen. The new fuel is made at Stat- oil's refineries at Mongstad, Norway, and Kalundborg, Denmark. Statoil intends to secure a place in this market ahead of tightened fuel regulations expected from the European Union in 2000. If sales are strong enough, the fuel will be sold throughout Norway and Denmark.