INDUSTRY BRIEFS

Companies

Canadian Natural Resources Ltd. (CNRL) made a $715 million (Canadian) takeover bid for Sceptre Resources Ltd. Both are Calgary companies. CNRL said if the merger succeeds it will become Canada's third largest undeveloped landholder, fifth largest natural gas producer, and 13th largest hydrocarbon liquids producer. Sceptre has been facing high operating costs and a high depletion rate of its oil and gas reserves. The deal would give CNRL interests in a number of key operating areas in western Canada, including acreage in the Grizzly Valley-Murray River gas play in Northeast British Columbia.

El Paso Energy Corp. agreed to merge with Tenneco Inc. unit Tenneco Energy in a $4 billion transaction. Under the deal, El Paso will assume $2.65 billion of Tenneco Energy debt and preferred stock as well as about $600 million of Tenneco Inc. liabilities and other considerations, and Tenneco will receive $750 million in El Paso equity shares.

Drilling-production

Norway's Den norske stats oljeselskap AS again hiked its estimate of original reserves in Gullfaks field off Norway, this time by 125 million bbl to 1.945 billion bbl of oil. When the field went on stream in December 1986, Statoil estimated reserves at 1.325 billion bbl. Three satellite fields, currently under development, boost total reserves in the license area to 2.21 billion bbl of oil. Gullfaks, developed using three platforms, produced more than 500,000 b/d last year.

BP Exploration Operating Co. Ltd. completed a second pilot production scheme in the U.K.'s Machar field. BP will develop Machar as part of the $2.4 billion. Eastern Trough Area Project involving seven North Sea fields (OGJ, Jan. 22, p. 21). A first pilot project in 1994 produced 7.7 million bbl of oil from two wells during 10 months to determine recovery rates from the complex Machar reservoir under natural depletion. A recently completed second 10 month trial produced almost 7 million bbl of oil. BP said the trials confirm Machar viability with primary recovery reserves of 60 million bbl, a volume expected to grow with waterflood.

Mobil Oil Canada Ltd. and Petro-Canada are holding talks on exchanging acreage in western Canada and near Sable Island off Nova Scotia. Petro-Canada holds an 18% interest in Sable Island gas fields. Mobil is operator and has a 41% interest in a proposed $2 billion (Canadian) Sable Island development project. Mobil said last month it plans to spin off more than $300 million in western Canada oil and gas properties into a royalty trust and plans development of heavy oil leases and oilsands properties near Fort McMurray, Alta. Petro-Canada wants to expand its natural gas operations in western Canada.

Canada's fabled Leduc oil field is for sale. A reef discovery at Leduc in February 1947, in a farmer's field 15 miles southwest of Edmonton, touched off an oil boom and development of Canada's modern oil industry. Leduc, also known as Leduc Woodbend pool, has produced more than 200 million bbl of crude oil and 250 bcf of gas. It currently produces about 20 MMcfd of gas and 900 b/d of oil. Owner Imperial Oil Ltd. plans to gradually wind down the field the next 6-12 months if there are no buyers. The company had drilled 133 dry holes before Leduc blew out in 1947, proving the existence of oil rich Devonian reefs.

Petro-Canada started production of 12,500 b/d of oil from its Tamadanet field on Algeria's Tinrhert Block 621 miles south of Algiers. Petro-Canada has a 70% interest and Algeria's state owned Sonatrach 30%. A fourth well will be connected within a month that will increase production to 15,000 b/d. Petro-Canada plans three more wildcats on the block this summer. Tamadanet has estimated reserves of 43 million bbl and an expected production life of 10-12 years. Petro-Canada holds a production sharing agreement on the 3,089 sq mile block for 5 years, renewable for another 5 years.

Canadian Fracmaster Ltd., Calgary, signed a $50 million (Canadian) deal with China's state owned China National Petroleum Corp. to boost oil production in China's northeast Shandong province. Fracmaster will spend that sum the next 10 years to generate a potential 33 million bbl of incremental production and revenues of $500 million (U.S.). Fracmaster, a specialist in well stimulation, sent a $10 million fleet of well stimulation trucks to China in late 1994 to demonstrate its recovery techniques. The project involves as many as 720 wells the next decade. Fracmaster will earn a share of any increased production, to be sold in China for U.S. dollars.

Leviathan Gas Pipeline Partners LP and MidCon Corp. subsidiaries started production from Garden Banks Block 72 in 525 ft of water off Louisiana. Initial production from the first two wells is about 2,000 b/d of oil and 4.8 MMcfd of gas. Gas moves to shore through the Stingray pipeline system, a 50-50 venture owned by Leviathan and MidCon units. Oil is being delivered into the Poseidon pipeline owned by subsidiaries of Leviathan and Texaco Inc. A multipurpose platform was installed on Garden Banks Block 72 in November 1995, and drilling started in February.

Petrochemicals

Borealis AS, Copenhagen, the polyolefins joint venture of Statoil and Finland's Neste Oy, formed a polyethylene venture with Abu Dhabi National Oil Co. (Adnoc). The venture, owned 60% Adnoc and 40% Borealis, will begin work immediately on a plant in Abu Dhabi to produce as much as 450,000 metric tons/year of high density and linear low density polyethylene. The plant will be based on Borealis' Borstar bimodal technology. The plant will include an ethane based ethylene plant and is to start production in 2000. A separate joint venture marketing company is to be formed.

Alujain Corp. and Neste Group plan to build an 850,000 metric ton/year methyl tertiary butyl ether (MTBE) plant at Yanbu, Saudi Arabia. Neste is to acquire a minority interest in the owner/operator, National Fuel Additives Company (Tahseen). Tahseen will secure butane and methanol feed from Aramco and Sabic. Neste will be a major marketer of the MTBE. Start-up is scheduled for summer 1999.

Glitsch Technology Corp., Houston, licensed to two producers its new technology for solvent acetic acid recovery in purified terephthalic acid (PTA) production. Sam Nam Petrochemicals Co. will use the technology to expand PTA production at its Yocheon, Korea, plant to 1 million metric tons/year from 600,000 tons/year. Mexico's Temex Corp. will debottleneck the recovery section of its PTA plant at Cosoleacaque, Veracruz, and increase capacity to 600,000 tons/year from 500,000 tons/year.

NOVA Chemicals Inc. will buy styrene plants at Beaver Valley, Pa., and Painesville, Ohio, from ARCO Chemical Co. for more than $100 million. The two plants will increase NOVA styrene production to 1.3 billion lb/year from 785 million lb/year, making the company the third largest producer of styrene in North America.

Exxon Chemical Holland BV let contract to Foster Wheeler Energy Ltd. for detailed engineering of an expansion and upgrade of its Rotterdam aromatics plant. The project, still in the final approval stage, will increase paraxylene capacity. Start-up is scheduled for 1998.

Pipelines

Canada's National Energy Board approved an application by TransCanada PipeLines Ltd., Calgary, for a crossing of the St. Clair River, near Sarnia, Ont. The 1/4 mile pipeline and pig receiver will provide 118 MMcfd of added capacity on the company's Dawn Extension and additional security in the event of loss of an existing crossing.

Alberta Energy & Utilities Board (AEUB) upheld the postage stamp toll system used by NOVA Gas Transmission Ltd., Calgary, on its Alberta gas pipeline system. PanCanadian Petroleum Ltd., Calgary, had challenged the system, which sets a uniform rate for moving gas anywhere in the province. Postage stamp tolls under which shippers pay about 25 (Canadian)/Mcf regardless of distance shipped, were established in 1980 to encourage exploration and development throughout Alberta. Removal of the system likely would increase shipping costs for gas from northern areas and reduce costs in the south.

Coastal Corp.'s ANR Iroquois Inc. unit agreed to purchase a Tenneco Energy unit that owns a 13.2% interest in the Iroquois Gas Transmission System for about $30 million. ANR also will offer half the interest acquired from Tenneco to CNG Iroquois Inc., a unit of Consolidated Natural Gas Co. Once the transactions are complete, ANR's ownership interest in Iroquois will rise to 16% from 9.4%. Iroquois is a 375 mile interstate natural gas pipeline extending from an interconnect with Trans- Canada Pipelines Ltd. at the Canadian border near Waddington, N.Y., to Long Island, N.Y.

Columbia Gas Transmission Corp. (CT) filed an amendment to its market expansion proposal that will cut the project's cost while maintaining the same service to customers. Affiliate Columbia Gas System Inc. (CG) agreed to an arrangement under which Texas Eastern Transmission Corp. will increase capacity on its Pennsylvania pipeline system and lease the new capacity to CT. The agreement eliminates the need for about $80 million of facilities CT had proposed to build in Pennsylvania.

Refining

Qatar's National Oil Distribution Co. (Nodco) let contract to Parsons Process Group Inc. for front end engineering and project management of a major expansion of its 57,000 b/d refinery at Umm Said, Qatar. Nodco will add 14 units and revamp nine units, transforming the refinery from hydroskimming to conversion operation. As a result, throughput also will increase to 80,000 b/d, gas yield will increase 24%, and fuel oil yield will decrease 27%.

Lyondell-Citgo Refining Co. started up a 50,000 b/sd SynSat distillate hydrotreater, colicensed by ABB Lummus Global and Criterion Catalyst Co. (OGJ, Mar. 21, 1994, p. 60). The low pressure unit upgrades a 60-40 blend of cracked and straight run distillates derived from heavy Venezuelan crude. The unit improves feed gravity by more than 7, increases cetane index by 7-10 numbers, and reduces aromatics by about 50%.

Maraven SA started up a UOP CCR Platformer at its Cardon refinery in Venzuela (OGJ, Mar. 18, p. 51). The Platforming complex can produce 38,000 b/d of 103 RON reformate from 45,000 b/d of naphtha feed. The Platformer enables Cardon to produce 120,000 b/d of reformulated gasoline for export.

A joint venture of Foster Wheeler Power Systems Inc. and BOC Gases started up an 8 MMcfd hydrogen plant at Petrox SA's refinery at Talcahuano, Chile. The joint venture, Cia. de Hidrogeno de Talcahuano Ltda. (CHT), will own and operate the plant. Petrox will use the 99.9% pure hydrogen in its hydrocracker.

Another venture of Foster Wheeler Power Systems Inc. and BOC Gases broke ground for a 50 MMcfd hydrogen plant it will build at Lagoven SA's 571,000 b/d Amuay refinery in Venezuela. The plant will use Foster Wheeler's Terrace Wall reformer technology. The venture, Cia. de Hidrogeno de Paraguana Ltda., will own and operate the plant. Completion is scheduled for summer 1997.

Exploration

Kerr-McGee Corp., Oklahoma City, tested light, sweet oil and associated gas at its CFD 2-1-1 wildcat in the Gulf of Bohai off China. Two tests were performed over a 365 ft interval in Cambro-Ordovician carbonates. The upper zone flowed about 5,970 b/d of oil, the lower one about 980 b/d. The well, on Contract Area 04/36 in about 40 ft of water, was drilled to 11,755 ft. Kerr-McGee China Petroleum Ltd. 45% operates the contract area with partners Murphy Oil Corp. unit Murphy Pacific Rim Ltd. 45% and Sino-American Energy Corp. 10%, Houston.

Snyder Oil Corp., Fort Worth, subsidiary SOCO Tamtsag Mongolia Inc. continued completion and testing work on its Sotamo 19-2 wildcat on Block XIX in Northeast Mongolia and spudded another wildcat on nearby Block XXII. Technical problems earlier prevented adequate testing of Sotamo 19-2, which was drilled last year and had oil and gas shows (OGJ, Nov. 13, 1995, p. 44, and map, Dec. 26, 1994, p. 32). SOCO will complete the well if a planned stimulation is successful. SOCO also recently spudded Sotamo 22-1 wildcat on Block XXII, a 3,400 m test of lower Cretaceous and Jurassic targets.

Triton Energy Ltd., Dallas, signed a production sharing contract with Oman covering exploration of Block 22 off Oman's southeast coast. Triton owns a 100% working interest in the 8,271 sq km block. Under an initial exploration phase, Triton will acquire 1,000 km of seismic data beginning in 1997, reprocess existing seismic data, and conduct geotechnical studies.

Spills

U.S. Minerals Management Service released interagency single plan guidelines for emergency personnel responding to spills of oil and hazardous substances to help them meet the requirements of various U.S. federal agencies. Participating with MMS in the guidelines were Environmental Protection Agency, Coast Guard, Occupational Safety & Health Administration, and the Transportation Department's Research and Special Programs Administration.

Exports-imports

U.S. Trade & Development Agency (TDA) Rosslyn, Va., unveiled a list of 39 energy projects in Indonesia, Malaysia, Thailand, and Philippines that offer opportunities for U.S. exports. Topping the list is the $35 billion Natuna liquefied natural gas export project in Indonesia. TDA is offering data on the various projects to U.S. firms.