INDUSTRY BRIEFS

LNG

El Paso City Council let a 2 year contract, with an option for a third year, to Mesa Pacific LNG to provide as much as 200,000 gal/month of liquefied natural gas to El Pasos Sun Metro transit bus system. Sun Metro operates 55 LNG buses and plans to buy 22 more in 1996 and 45 more in 1997. The contract boosts volumes Mesa Pacific markets to almost 6,500 b/d from 1,200 b/d. Mesa Pacific is a venture of Mesa Inc., Dallas, and Pacific Enterprises, Los Angeles.

Refining

Pertamina let a $465 million contract to Fluor Daniel for a $633 million project at its 285,000 b/d Cilacap, Java, refinery. It calls for engineering, procurement, and construction services to debottleneck the refinery and add a lube oil complex. When complete early in 1999, the project will increase crude throughput capacity by about 16% and lube oil capacity by 71%. Construction is to begin early this year.

FAL Oil Co., Sharjah, plans to build the emirates first refinery by yearend 1997. It hired Canadas Quantel Engineering to manage construction of the 33,000 b/d refinery, which will produce mainly middle distillates and motor fuel for local consumption and export. Britains Halcrow International Partnership will design storage and loading facilities at the refinery.

Tecnicas Reunidas, Madrid, on behalf of Spanish state oil company Repsol Petroleo, let contract to UOP NV, Antwerp, for hydrogen purification and recovery units at Repsols 135,000 b/d Puertollano, Spain, refinery.

Drilling-production

Total signed a production sharing agreement to develop Khariaga oil field in Russias autonomous territory of Nenets. Total signed the original development/production contract in 1992 (OGJ, Oct. 19, 1992, p. 25). Plans call for a $300 million first phase development and a $500 million second phase development, with production expected to reach 50,000 b/d.

Maersk Olie & Gas AS and partners plan to immediately drill more wells after confirming a major gas discovery in the Gulf of Thailand off Thailand. The second well on the Benchamas structure flowed a combined 33.3 MMcfd of gas and 7,575 b/d of oil or condensate on four drill stem tests. The discovery well, 5 miles south, in May 1995 flowed 44.7 MMcfd and 4,835 b/d (OGJ, May 22, 1995, p. 30).

Esso Norge AS let contract to ABB Offshore Technology, Stavanger, and Coflexip Stena Offshore Ltd., Aberdeen, for subsea equipment to be installed in development of Balder field off Norway. Esso will develop Balder with a floating production, storage, and offloading vessel. The ABB-Coflexip Stena contract is for engineering, procurement, and construction of subsea wellheads and trees, flow lines and risers, and control systems. Balder production could begin in late 1996 or early 1997.

Amerada Hess Ltd. let a $60 million contract to Rockwater Ltd., Aberdeen, for subsea equipment to be used in development of Telford field off the U.K. Telford is to be developed as a subsea satellite of Scott platform. Rockwater will design, procure, build, install, and commission two 180 metric ton subsea manifolds, a 100 ton shutdown valve, and a 150 m long, 220 ton riser caisson to be connected to the platform. Aberdeens Coflexip Stena will handle pipelaying and trenching under a $18 million subcontract.

Abacan Resource Corp., Calgary, expects to begin production from NGO oil field off Nigeria in third quarter 1996. It estimates reserves at 190 million bbl of proved, probable, and possible reserves and says initial production will be 45,000-50,000 b/d.

Three workmen were killed and four injured in a Dec. 21 blast at AMEC plcs Howden, U.K., fabrication yard along the River Tyne. The men were conducting pressure tests using high pressure nitrogen equipment on a bridge module being built for Maersk Olie & Gas for installation in West Tyra oil field in the Danish North Sea. Investigation into the cause was under way last week.

Louis Dreyfus Natural Gas Corp., Oklahoma City, plans a drilling budget of $76 million covering 250 wells in 1996, up from estimated 1995 outlays of $65 million. It plans to spend about $29 million in West Texas, mainly in the Sonora area, $19 million in Northwest Oklahoma, and $8 million in Southeast New Mexico. Louis Dreyfus also budgeted $18 million for the Texas Gulf Coast area, including $6 million for 3D seismic surveys and exploratory drilling. The remaining $2 million will be spent to acquire leases in the firms producing areas.

Benton Oil & Gas Co., Carpinteria, Calif., boosted oil production from Uracoa oil field in Monagas, Venezuela, to 24,000 b/d from the 17,000 b/d volume of last summer and 6,700 b/d in 1994 (OGJ, Aug. 21, 1995, p. 33). Benton-Vinccler CA, Bentons 80% owned Venezuelan venture, is reactivating and further developing Uracoa, Bombal, and Tucupita oil fields in the South Monagas Unit under Venezuelas marginal fields program. Plans call for installing facilities to expand productive capacity to 40,000 b/d by mid-1996 from the current 30,000 b/d. Another 55 development wells are slated for Uracoa full development.

Beta Well Service Inc., Calgary, agreed to sell its 50% interest in its Kazakhstan partnership Zhetybay-Quest, two service rigs, and related equipment in Kazakhstan to an undisclosed company for $12 million (Canadian) and $30 million in deferred payments contingent upon the partnerships profits. Book value of Betas investment in Zhetybay-Quest to date was $25 million as of Sept. 30, 1995.

Nabors Industries Inc., Houston, received three 3 year drilling rig contracts in Saudi Arabia and one 3 year contract in the Gulf of Mexico. Nabors Saudi unit will mobilize three deep capacity rigstwo to work in the Shaybah area and one to work elsewhere in Saudi Arabia. The first rig will start work in February and be moved in from Gabon. The other two will be shipped in from Yemen with delivery slated for later this year. In the Gulf of Mexico, Nabors will mobilize its platform rig No. 85 in late 1997, following modifications for use as a moored spar platform in 2,700 ft of water.

Coastal Oil & Gas Corp. boosted production from its Galveston Blocks 241/255 field in the Gulf of Mexico off Texas to 4,200 b/d of oil and 8 MMcfd of gas from 300 b/d of oil in 1993. That resulted from Coastal completing most of its redevelopment program in the field, which started production in 1973. The program entailed a 3D seismic survey of the field followed by drilling of four more development wells, with at least one more slated in 1996 along with several workovers.

Exploration

Esso Exploration & Production U.K. Ltd. chartered the Transocean 8 semisubmersible drilling rig from Transocean AS, Stavanger, for exploratory drilling in U.K.s West of Shetland play. The agreement calls for drilling a wildcat in 1,100 ft of water on Block 205/14. Drilling is to begin this summer and take 120 days.

TFC Exploration Inc., Houston, signed a 5 year agreement with Vietnamese state oil company Petrovietnam covering collection and licensing of nonexclusive offshore and onshore 2D regional seismic data. Involved are Minh Hai offshore area Blocks 25-27 and 31-44, the Mekong Delta transition zone, and Mekong Delta tributaries and canals. Data acquisition will begin in the first two areas this quarter and in the third area next quarter.

TFC signed a 5 year agreement with Cambodias Ministry of Mines and Energy to collect and license nonexclusive seismic data covering onshore Cambodia. A first phase survey will get under way this quarter.

Oilsands

Solv-Ex Corp., Albuquerque, received final regulatory approval for its $170 million (Canadian) Bitumount oilsands project in northern Albertas Athabasca region (OGJ, Dec. 18, 1995, p. 38). First production is slated for late 1996 or early 1997. Solv-Ex also will spend about $45 million on a project to extract alumina from oilsands wastes.

Companies

Quaker State Corp. offered $4.4 million as settlement to small oil producers that in a class action suit accused it, Pennzoil Products Co., and Witco Corp. of conspiring since 1981 to depress and fix the price of Pennsylvania grade crude the three refiners buy in the Appalachian basin areas of Ohio, West Virginia, New York, and Pennsylvania. Quaker State, seeking to avoid litigation. denied the allegations. Pennzoil and Witco also denied the allegations but plan to defend themselves in court.

Finlands Neste Oy is continuing its withdrawal from U.K. exploration and production with the sale of its 50% share in Sovereign Exploration Ltd. to Northgas Ltd., a unit of Northern Electric plc, Newcastle-upon-Tyne. Northern Electric was Nestes equal partner in Sovereign, which holds interests in Victor gas field and the Schooner and Windermere discoveries. As part of its refocusing of E&P activities, Nestes international business unit office will move from London to Dubai (OGJ, May 22, 1995, p. 17).

Mark Resources Ltd. developed a shareholders bid approval plan to fight a $485 million takeover move by Pembina Acquisition Corp. Both are Calgary firms. Pembinas offer of $7/share is expected to expire the third week of this month. A bid approval plan by Mark that expires Jan. 31 requires a bid to stay open for 30 days vs. the current 21 days. Mark advised its shareholders to reject the Pembina offer as inadequate.

Louisiana Land & Exploration Co., New Orleans, plans a 1996 exploration and development budget of $206 million, up 14% from 1995 spending. Exploration outlays will jump by more than 30% to $114 million.

Amerada Hess Corp. recorded a fourth quarter, noncash charge to earnings of about $580 million by adopting Financial Accounting Standards Board (FASB) No. 121 accounting standard covering impairment of long lived assets. About 75% of the pretax charge relates to the companys Port Reading, N.J., refinery and U.S. flagged Jones Act ships, future roles of which Amerada Hess is reviewing.

Equitable Resources, Pittsburgh, will take a noncash, after tax charge of about $71 million for fourth quarter 1995 as a result of adopting FASB No. 121. The charge is expected to trim Equitable noncash operating expenses by at least $12 million in 1996. About 60% of the charge reflects a writedown of producing and undeveloped properties, 20% parts of Equitables intrastate pipeline, and 20% for nonperforming, noncore assets.

Noble Affiliates Inc., Ardmore, Okla., will take a noncash, pretax charge of $59.5 million against 1995 earnings related to its adoption of FASB No. 121. Meantime, its Samedan Oil Corp. unit received $48.9 million from settlement of a bankruptcy claim against Columbia Gas Transmission Corp.

Alternate fuels

Williams Cos. Inc., Tulsa, canceled plans for an in situ coal gasification project near Rawlins, Wyo. Williams said the technology involved did not perform as well on the Wyoming coal reserves as it had expected. A surplus of gas in the region also made the project less attractive. Reclamation work is to begin immediately. Williams will take a pretax charge, not expected to exceed $42 million, in its 1995 financial results. Williams also will abandon permits it began acquiring in January 1994 to allow construction of a demonstration module at the Carbon County site.

Pipelines

TransCanada PipeLines Ltd. signed a 4 year incentive deal with users of its natural gas pipeline system. Under the agreement, when TransCanada saves $1 in costs, the benefit will be split 50-50 between the pipeline and shippers. TransCanada said the agreement, subject to National Energy Board approval, is the first of its kind in North America between shippers and a gas pipeline. A similar incentive agreement was signed in February 1995 between shippers and Canadian oil pipeline operator IPL Energy Inc.

CMS Gas Transmission & Storage Co. and St. Clair Pipelines Ltd., respective units of CMS Energy Corp., Dearborn, Mich., and Ontarios Union Gas Ltd., started up the 200 MMcfd capacity Bluewater pipeline. The $5.3 million project links systems of Union Gas and CMS affiliate Consumers Power Co. at the Michigan-Ontario border (OGJ, Oct. 9, 1995, p. 44).

Natural Gas Project Portugal (NGPP), through contractor AEG Daimler-Benz Industrie, let contract to LIConsult to provide simulation software for NGPPs Portugal pipeline system, which consists of 553 km of trunk pipeline and 194 km of 4-24 in. branch lines. Real time applications for the pipeline will include data receiving and sending, data preprocessing, dynamic pipeline modeling, leak detection and location, balancing, predictive modeling, and line inventory. LIConsult took on the project in January 1994 and plans start-up in fourth quarter 1996.

Gas storage

Oregon Natural Gas Development Corp. (ONGD), a unit of Northwest Natural Gas Co., Portland, Ore., acquired depleted gas reservoirs in the Mist fields complex of Columbia County, Ore., for development as gas storage sites. Under an agreement with partnership managed Enerfin Resources Co., Houston, ONGD acquired Enerfins two thirds interest in four areas with storage development potential and an option to acquire more storage rights in the Mist area. Enerfin obtained ONGDs Mist field gathering system and its one third interest in all Mist producing assets.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.