INDUSTRY BRIEFS

Exploration

Total reported a second discovery in the Jusepin field area of Northeast Venezuela. The well flowed on test at a combined rate of 10,175 b/d at depths exceeding 5,000 m. The new pool wildcat is 7.8 km from an earlier discovery. Total and Amoco are operators of the field under a 20 year marginal field reactivation contract signed in 1993 with Petroleos de Venezuela SA unit Lagoven SA.

Santos Ltd., Adelaide, operating for the Nappacoongie-Muteree joint venture, reported a discovery in South Australia's Cooper basin. The 1 Carmina wildcat flowed on test at a rate of 4,200 b/d of 51.2° gravity crude through a 1/2 in. choke from Jurassic Hutton pay at 1,499-1,507 m. Although relatively small, the find is only 40 km south of the Moomba treatment plant and 6 km east of Alwyn field, facilitating early development.

United Meridian Corp. and Shell Exploration Africa BV signed a production sharing contract with Cote d'Ivoire for the country's first deepwater block. The contract covers the 512,000 acre block CI-105, also known as Etente, which lies in 1,500-6,000 ft of water. Several prospects and leads were identified on the block by existing 2D seismic data. The partners plan to start a 3D seismic survey next month.

Gas processing

Poco Petroleums Ltd., Calgary, will install the absorption-based Mehra Process for natural gas liquids recovery at its 45-MMcfd Wolf South refrigeration gas processing plant near Edson, Alta. The process is designed to increase recovery of propane non-cryogenically from the current 30% to as much as 95%. The new unit will be installed and operating by April 1997.

Drilling-production

Petroleo Brasileiro let contract to GVA AB, Gothenberg, Sweden, to convert the Petrobras XXIII semisubmersible drilling rig to dynamic positioning for operations in water as deep as 1,500 m. The conversion, designed by a GVA unit, includes 8 computer-controlled azimuth propellers. The converted rig will work in the deepwater Campos basin, mainly in Marlim giant oil field, off Brazil. Project cost is $94.35 million. Delivery is scheduled for February 1998 with start-up in April 1998. The rig is under a 10 year lease to Petrobras unit Brasoil.

Premier Oil plc, London, bought Sumatra Gulf Oil Ltd. (SGOL) from Chevron International Ltd. for $72 million. The sole asset of SGOL is a 66.67% interest in Natuna Sea Block A production sharing contract off Indonesia, which includes the producing Anoa oil field and undeveloped gas fields. Premier wants to develop 650 bcf of gas in Anoa and a further 1.5 tcf estimated reserves in two recent finds on the same block. It plans to begin new production before 2000 and has identified other exploration prospects there.

Anadarko Petroleum Corp., Houston, and partners let a $177 million contract to Brown & Root Condor (BRC) for engineering, procurement, and construction of a first stage production complex in Hassi Berkine South oil field in Algeria. The complex will have capacity to produce as much as 60,000 b/d of oil. BRC is a unit of Brown & Root and affiliates of Algerian state oil firm Sonatrach. Anadarko's partners are Sonatrach and units of Lasmo plc and Maersk Olie og Gas AS.

Universal Resources Corp., a unit of Questar Corp., Salt Lake City, paid $119.7 million to PMC Reserve Acquisition Co., Dallas, for interests in about 1,500 wells located primarily in the Permian basin, Midcontinent, and ArkLaTex regions. Apache Corp., Houston, paid $5.9 million for PMC's remaining property in Mississippi's Tiger field.

Petroleos Mexicanos let contract for bareboat charter of the Cliffs Drilling No. 12 jack up in Mexico's Bay of Campeche to a 50-50 joint venture of Cliffs Drilling Co., Houston, and Perforadora Central SA de CV, Mexico City. The rig will be refurbished, including an upgrade of its quarters, before the contract takes effect Oct. 28.

Canadian natural gas reserves increased by 1.6% and crude oil reserves remained steady at yearend 1995 compared with 1994, reported Canadian Association of Petroleum Producers. Conventional oil reserves at yearend 1995 were 3.701 billion bbl vs. 3.707 billion bbl at yearend 1994. Canadian gas reserves were 68.5 tcf at yearend 1995 vs. 67.4 tcf in 1994. Canadian oilsands reserves increased in 1995 from 1994 by 614 million bbl to 2.567 billion bbl.

Petro-Canada, Calgary, traded an 18% interest in natural gas reserves totaling 3 tcf in the Sable Island area off Nova Scotia to Mobil Oil Canada Ltd. for producing properties in Alberta. The deal gives Petro-Canada production of about 2,300 b/d of oil and 15 MMcfd of gas in Alberta. Mobil, lead partner in Sable Island development, will increase its ownership to 59% from a current 41%. Petro-Canada will get interests in the Notikewan, Ferrier, and Gilby fields and exploration acreage in Alberta's Ricinus area.

Den norske stats oljeselskap AS (Statoil) extended its charter of Transocean Arctic semisubmersible drilling rig, operated by Transocean AS, Tananger, Norway. Stat- oil's current contract for the rig expires July 1997. The new deal will keep it working for Statoil until July 1998. Transocean Arctic is currently drilling in the Norwegian Sea for Saga Petroleum AS, after which it will drill a Barents Sea well for Statoil. Under the new contract, valued at $50 million, the rig will drill development wells in Aasgard fields in the Norwegian Sea (see related story, p. 30).

Amerada Hess Ltd. contractor Bluewater Offshore Production Systems Ltd., Essen, Belgium, let a subcontract to Smit Maritime Contractors BV, Rotterdam, for marine services. The contract covers operations in Durward and Dauntless fields, under development on U.K. North Sea Blocks 21/16 and 21/11. Bluewater will provide and operate the Glas Dowr production, storage, and offloading ship to deplete the fields beginning next year.

United Petroleum Corp., Knoxville, Tenn., signed a final agreement with Kastle Resources, Edinboro, Pa., to drill 200 oil wells in Ohio and 100 gas wells in Pennsylvania the next 2 years. The Ohio program will occur next to 14 producing wells in central Ohio with current output of 20,000 bbl/year. The Northwest Pennsylvania field produces 85-100 Mcfd/well.

Refining

Transpacific Group, Brisbane, Australia, ordered a $3.4 million, 24,000 gal/day used oil re-refinery from Interline Resources Corp., Alpine, Utah. The plant will be constructed at Sandy, Utah, and shipped to Australia. Under terms of the exclusive purchase agreement, Transpacific must order a second refinery of the same size within 2 years. Transpacific will disclose sites for both refineries at a later date. Interline will receive a 6/gal royalty on the finished product.

Terminals

Coastal Baltica Holding Co. Ltd. started up its newly upgraded Tallinn, Estonia, terminal. Refurbishment included construction of a 4.6 mile pipeline connecting the terminal with the Port of Muuga, one of the deepest ports on the Baltic Sea. The terminal has capacity of 16 million bbl/year of refined products and gives Russia and other former republics of the Soviet Union more access to markets in Europe, North America, South America, and the Caribbean. Coastal Baltica Holding Co. is jointly owned by Coastal Corp., Houston, and the Swedish-Dutch company Baltica Finance NV.

Companies

Seagull Energy Corp., Houston, paid $74 million for the stock of Esso Suez Inc. and certain assets of Esso Egypt, Ltd. Esso Suez assets include a 100% interest in the East Zeit oil producing concession in the Gulf of Suez, where output net to Seagull's acquired interest averages 4,000-5,000 b/d of crude. Esso Egypt owned the entire working interest in the South Hurghada exploration concession, located onshore along the Gulf of Suez about 250 miles southeast of Cairo. The properties represented all of the sellers' remaining interests in Egypt.

Mobil Exploration & Development Argentina Inc. purchased an interest of about 28% from BHP Petroleum in Sierra Chata gas field in Argentina's Neuquen basin. BHP previously had a 31.1% interest in the field. Terms included a cash payment and assignment to BHP of portions of Mobil's interest in six Gulf of Mexico blocks in the northern Green Canyon and Ewing Bank areas off Louisiana. The acquisition enables Mobil to sell gas to Chile through the GasAndes pipeline, currently under construction. Current sales from Sierra Chata gas field total about 150 MMcfd.

Union Pacific Resources Group Inc., Fort Worth, increased its 1996 capital budget by $180 million to $975 million. About 70% of the additional funds will be used for drilling and acquiring acreage in the Austin chalk area, Gulf Coast, and West Texas. The remaining 30% will be used for development of downstream natural gas investments and producing property purchases. The company also completed a $2.3 million purchase from Enserch Exploration Inc., Dallas, of 9,800 acres in the Williston basin, including ownership interest in 24 producing wells.

Schlumberger Ltd. and Baker Hughes Inc. signed a letter of intent to establish strategic alliances among several of their product lines. Baker Hughes' Baker Oil Tools division will become the preferred supplier of downhole tools, completion design equipment, and related services to certain Schlumberger Oilfield Services units, including Integrated Project Management. Schlumberger will become the preferred supplier of coiled tubing services and downhole monitoring devices to Baker Oil Tools.

NGL

Amoco Oil Co. agreed to supply Giant Industries Inc., Scottsdale, Ariz., with natural gas and other natural gas liquids under a long-term contract. Giant will receive from Amoco's Wingate fractionation plant near Gallup, N.M., about 500 b/d of natural gasoline from Sept. 1, 1996, through May 31, 1997, and has the option to obtain more through April 2001. Giant will use the natural gasoline at its Ciniza refinery near Gallup, N.M., or at its Bloomfield, N.M., refinery.

Spills

Exxon Corp. will appeal within 30 days a Sept. 24 ruling by a U.S. district court judge in Anchorage upholding damages assessed by a jury 2 years ago for the 1989 Exxon Valdez oil spill off Alaska. Under the latest ruling, Exxon would have to pay $5 billion in punitive damages and compensatory damages of $19.5 million or provide assurances of payment during appeal. The judgment also includes interest of about $38 million that has accrued since the jury award in 1994. The case has now finished lengthy rounds in federal district court and is expected to be heard in the 9th Circuit Court of Appeals in 1997.

Pipelines

Canada's National Energy Board (NEB) ruled to refund Canadian gas shippers about $38 million (U.S.) in overpayments to Great Lakes Gas Transmission Ltd. Partnership. The NEB decision follows a Federal Energy Regulatory Commission ruling that tolling rates charged by Great Lakes were unjust and unreasonable between Nov. 1, 1991, and Sept. 30, 1995. Great Lakes is 50% owned by TransCanada PipeLines Ltd., Calgary. Great Lakes will repay Canadian shippers by sending the $38 million to TransCanada the next 3 years.

Columbia Gulf Transmission Co. and Tennessee Gas Pipeline Co. filed for FERC approval of an agreement to give customers greater access to Gulf of Mexico gas. The accord gives Tennessee Gas added capacity on the 500 MMcfd South Pass system, which the firms own 50-50, and provides Columbia a direct connection between the South Pass system and its onshore gas system. Tennessee will lease Columbia 115 MMcfd of firm capacity on its mainline in southern Louisiana, giving Columbia customers direct access to the South Pass system for the first time. In return, Columbia will lease Tennessee any capacity beyond its retained capacity of 115 MMcfd in the South Pass system, or about 77 MMcfd.

BHP Petroleum Pty. Ltd. and Westcoast Energy Australia won initial environmental endorsement of their proposed $383 million (Australian), 750 km Eastern Gas Pipeline between the Bass Strait and Sydney. The final decision on construction now awaits action by the governments of Victoria and New South Wales. Sponsors hope to finish the pipeline in time to start deliveries by 1998.

Maritimes & Northeast

Pipelines LLC, Houston, filed for FERC approval to build Phase II of the pipeline to bring gas from Sable Island off Nova Scotia to New England. Phase II would involve about 230 miles of mostly 24 in. mainline from the U.S.-Canadian border near Woodlands, Me., to interconnect with Phase I facilities at Wells, Me. Total Phase II capacity of about 440 MMcfd is scheduled to come in service by November 1999, but sponsors want to deliver about 100 MMcfd by November 1998 for areas requesting early service. Phase I is slated to be in service in 1997.

Western Gas Resources Inc., Denver, will build a $35 million gathering and sour gas treating complex with initial minimum capacity of 200 MMcfd near Bethel, Tex. Project includes a 45 mile, 20 in. trunk line from the plant to Pinnacle Reef wells. Western has signed long-term gathering and treating agreements with four producers in the area reserving 100 MMcfd of capacity and plans to expand facilities in stages to accommodate further discoveries in the trend. The first phase is scheduled for completion in April 1997.

Petrochemicals

Huntsman Corp., Salt Lake City, plans to acquire Deerfield Plastics Inc., South Deerfield, Mass. The companies signed a merger agreement, and the transaction is expected to close in October. Deerfield is the largest U.S. independent producer of polyethylene film, with revenues of about $100 million/year and two plants with combined capacity of more than 140 million lb/year.