Refining Mobil Oil Corp. and Venezuela's Lagoven SA successfully processed 265,000 bbl of Orinoco belt extra heavy crude in a Mobil's 170,000 b/d Chalmette, La., refinery. The test run is in preparation for a proposed strategic association between the two firms to produce and upgrade 100,000 b/d of extra heavy crude from the Orinoco belt's Cerro Negro area in eastern Venezuela (OGJ, Feb. 22, 1995, Newsletter). The Cerro Negro crude will be upgraded to a synthetic crude at an upgrader plant to be built at Jose, Venezuela, prior to shipping to Chalmette for refining.
Exploration Cairn Energy plc, Edinburgh, found Offshore Bangladesh's first gas. Its 1 Sangu wildcat on Block 16 flowed on drill stem a maximum stabilized rate of 50 MMcfd of gas through a 1 in. choke with flowing wellhead pressure of 2,405 psig. Cairn plans to suspend the well as a potential producer and drill 2 Sangu appraisal well 5 km Cairn is 75% interest holder and operator of the block, with 25% held by Holland Sea Search Bangladesh BV.
Celsius Energy Co., a unit of Salt Lake City's Questar Corp., agreed with Marathon Oil Co. to explore about 70,000 net acres the Vermilion basin of Wyoming and Colorado. Marathon will conduct 3D seismic surveys in 1996 on leaseholds owned by Celsius and other Questar affiliates in Sweetwater County, Wyo., and Moffat County, Colo. The Questar units own interests in and operate several older fields in the basin. Marathon has options to earn added interests from Celsius and Questar in producing and nonproducing leases in the area by drilling wildcats or conducting more 3D surveys, thus extending the agreement through 2006.
Apache Corp. acquired a 50% interest from Global Natural Resources Inc. in the East Beni Suef concession in Egypt's western desert. If approved by Egyptian General Petroleum Corp., the deal would give Apache the option of becoming operator of the 6.8 million acre tract in the event of a commercial discovery and would boost Apache's stake in Egypt to 9.2 million gross acres.
Courts
Seminole Pipeline Co., Tulsa, and codefendants will seek a new trial after a Houston jury found against them in civil suits arising from the Apr. 7, 1992, explosion that killed three people at Seminole's liquefied petroleum gas storage cavern near Brenham, Tex. (OGJ, Apr. 13, 1992, p. 35). The jury found Seminole, its majority owner Mapco Inc., and affiliate Mid-America Pipeline Co. negligent in the accident and ordered them to pay $5.4 million in actual damages and $138 million in exemplary damages. Liability in such cases is capped at $27 million under Texas law, Seminole said. Texas Railroad Commission in 1994 revoked Seminole's permit to operate the site (OGJ, June 27, 1994, p. 23).
Companies
Mobil Exploration & Producing Australia Pty. Ltd. proposed acquiring Ampolex Ltd., Sydney, for at least $1.24 billion (Australian). After acquiring a substantial stake in Ampolex, Mobil offered $4.25 (Australian)/share for all Ampolex ordinary shares and more for preference shares and convertible notes. It expects to offer continued employment to all Ampolex employees.
Elf Petroleum U.K. plc acquired the other 50% share in joint venture independent gas supplier Associated Gas Supplies Ltd. (AGAS) held by Energy & Technical Services Group plc, London. AGAS has supplied gas to industrial and commercial customers under the liberalizing U.K. gas market regime since 1990. AGAS also has an agreement with an electric power generator to sell electric power and is targeting distribution systems in new housing developments.
TransTexas Gas Corp., Houston, hired Jefferies & Co. Inc. and First Union Corp. of North Carolina to assist it in sale of certain noncore assets. Jefferies will assist in the sale-leaseback of its 1,100 mile pipeline in South Texas, and talks are under way with prospective buyers. First Union will help TransTexas sell three packages of producing Lobo properties in Texas with a combined 150 bcf of gas reserves. First Union has been contacting prospective purchasers and was to open a data room about Feb. 15.
Arch Petroleum Inc., Fort Worth, is acquiring Trax Petroleums Ltd., Calgary, for about $10 million (Canadian) cash. Trax's Nov. 30, 1995, proved and probable reserves were estimated at 964,000 bbl of oil and 1.38 bcf of natural gas.
Pipelines
Southern Natural Gas Co. (SNG) unit of Sonat Inc., Birmingham, Ala., asked the Federal Energy Regulatory Commission for permission to extend its pipeline system to serve firm gas transportation customers in northern Alabama. The proposed $53 million expansion involves laying 118 miles of pipeline and boosting compression to add 76 MMcfd of capacity to SNG's system by Nov. 1, 1997.
Drilling-production
Phillips Petroleum Co. 2 Bayu appraisal well on Timor Sea Block ZOCA 91-13 flowed 35 MMcfd of gas and 2,100 b/d of condensate from mid to late Jurassic sandstone at 9,787-10,279 ft, reported block interest holder Hardy Oil & Gas plc. The well was drilled to 10,495 ft total depth and cut 492 ft of pay (OGJ, Jan. 29, p. 48). Another appraisal well is to be drilled in the second quarter. Another block partner, Oryx Energy Co., Dallas, estimated Bayu reserves at 750-800 million bbl of oil equivalent.
ARCO Qatar Consortium gauged a flow rate of 9,655 b/d from the Arab 3 formation in the 2,200 ft QMB horizontal appraisal well on the Arab B structure off Qatar. The test rate was limited by pump and flare capacities, and indications are the well has productive capacity of more than 25,000 b/d from the Arab 3 pay zone, reported interest owner Gulfstream Resources Canada Ltd., Calgary. Another appraisal is needed to assess productivity of Arab 1 pay, which also flowed oil from a vertical pilot hole. The group estimates Arab B structure oil in place at 1.3 billion bbl, and Gulfstream estimates recovery at more than 25%.
Clyde Petroleum plc, Ledbury, U.K., bought Marathon Petroleum Indonesia Ltd. for $51.04 million. This gives Clyde a 31.25% interest and operatorship of Kakap production sharing contract, which covers four producing oil fields and three planned subsea satellites in the Natuna Sea off Indonesia (OGJ, Jan.. 22, p. 25). The four producing fields were developed with four platforms, each with initial processing facilities, linked to Kakap Natuna floating production, storage, and offloading vessel (FPSO).
International Petroleum Corp., Vancouver, B.C., agreed with Malaysia's state owned Petronas on terms to develop and market oil and gas produced from fields on Block PM-3 off Malaysia. IPC will deliver 250 MMcfd of gas to Petronas beginning in fourth quarter 1999 for 10 years with a 10 year extension option. The gas will be transported to Kerteh on peninsular Malaysia via a Petronas pipeline. The fields also will produce at peak 50,000 b/d of oil. Plans call for four horizontal wells to produce through an early production system consisting of a minimal wellhead structure tied to an FPSO. The system will be commissioned in June 1997 and produce initially 15,000 b/d of oil.
Phillips Petroleum Co. U.K. Ltd. and Mobil North Sea Ltd. let a 5 year operations and maintenance services support contract to Grootcon (U.K.) Ltd., Aberdeen. The contractor will work on Phillips' Hewett area platforms in the southern U.K. North Sea, and Mobil's Lancelot, Guinevere, Excalibur, and Galahad platforms nearby.
Texaco Exploration & Production Inc. and partners' Shasta field is producing 58 MMcfd of gas and 800 b/d of condensate from two subsea wells equipped with horizontal trees in 850-1,040 ft of water on Green Canyon Blocks 92, 136, and 137, about 220 miles southwest of New Orleans in the Gulf of Mexico. Operator Texaco has 50% interest in Shasta, with other interests held by Hardy Oil & Gas USA Inc. and Samedan Oil Corp. 25% each.
Enron Oil & Gas India Ltd. let firm 18 month contracts to Reading & Bates Corp., Houston, valued at about $34.9 million for two 300 ft rated cantilever jack ups to conduct development drilling in the Bombay High area off India. J.T. Angel and Harvey Ward jack ups will be mobilized from Tunisia and Australia, respectively, and are to arrive in India in time for work to begin in April.
Spills
Oil Spill Response Ltd. (OSRL), Southampton, U.K., let contract to Hunting Aviation Ltd., Windsor, U.K., for use of a Hercules transport aircraft to support oil spill cleanup operations. OSRL is a worldwide spill response network owned by 22 oil companies. The Hercules will be based at U.K.'s East Midlands airport and will be used to drop oil dispersants over spill sites.
Gas marketing
Gas Industry Standards Board (GISB) is circulating a draft of proposed business practices standards as part of a Federal Energy Regulatory Commission rulemaking to set up standardized electronic communications for gas industry transactions. Written comments on the proposed standards are due Mar. 1 at GISB's Houston headquarters. GISB's executive committee is to finalize the group's recommendations and report to FERC, which set a Mar. 15 deadline for final comments.
CMS Gas & Electric Marketing, a unit of CMS Energy Corp., Dearborn, Mich., signed a joint marketing agreement with Marine Coal Sales Co., Indianapolis, to cooperate in marketing natural gas and/or coal in the East Central U.S. Under the deal CMS will assist Marine Coal's efforts to find new coal customers, while Marine Coal will help CMS expand its customer base of natural gas and electric energy and/or capacity customers.
Lubricants
Pennzoil Products Co. acquired a 50% equity interest in a new lubricant marketing joint venture with ATGE SA, Buenos Aires. The venture, Lubricantes Pennzoil Argentina SA, will sell and distribute Pennzoil brand lubricants and consumer products throughout Argentina. Pennzoil brand products will be imported into Argentina until local production is sufficient to supply the market. Pennzoil also sees the venture as a springboard into Paraguay and Uruguay.
Tankers
Panamanian flag oil tanker Kyra sank with all 18 hands during a storm off Southwest Greece Feb. 9. The 5,000 metric ton tanker was fully laden en route to Turkey before it disappeared. Searches were still under way last week in the Ionian Sea near the Peloponnese Islands amid fears of an oil spill, although neither the tanker nor oil slicks had been spotted by presstime.
Japan's parliament plans to debate two maritime law bills in March that would tighten inspection requirements for oil tankers and freight ships. Japan's cabinet endorsed in January one draft law for crew requirements and one for marine pollution and accident prevention to cover foreign registered ships sailing in Japanese waters.
Alternate fuels
Stone & Webster Engineering Corp., Atlanta, and seven partners will study feasibility of converting waste rice straw to ethanol, power, and chemicals in the Sacramento Valley near Gridley, Calif. Pilot plant studies will be conducted at U.S. Department of Energy's National Renewable Energy Lab at Golden, Colo., to test the technology. The ethanol conversion process belongs to SWAN Biomass Co., a venture of Amoco Corp. and Stone & Webster. Work is to begin this month and be complete in July 1997.
Tokyo Electric Power Co. plans to switch from a coal-oil mix to neat fuel oil to power two electric power plants at Yokusaka, Kanagawa prefecture. Low oil prices have made the coal-oil mix 11/2-2 times the price of fuel oil and thus noncompetitive. These are Japan's only two plants capable of burning the coal-oil blend, which is made by mixing fuel oil with finely crushed coal to yield a fuel that can be stored in tanks and transported by pipelines.
Terminals
Star Enterprise venture of Texaco Inc. and Saudi Aramco is offering to sell idled petroleum products terminals at Pennsauken, N.J., with 1.1 million bbl capacity, and Chesapeake, Va., with 472,000 bbl capacity. Both are supplied by Colonial Pipeline.
Total's first refined products tank farm in Cambodia began supplying Total's 10 retail service stations in that country. Plans call for expanding Total's retail network in Cambodia to 25 stations the next 2 years. The 8,000 cu m capacity tank farm is on the Mekong River, downstream from Phnom Penh with access to supplies from Southeast Asia export refineries.
Petrochemicals
Montell International and Xenel Industries chose UOP's Oleflex process and the Huels selective hydrogenation process for their proposed 250,000 metric ton/year propylene plant at Yanbu, Saudi Arabia. It will produce polymer grade propylene from propane.
Occidental Chemical Corp. plans a restructuring that will eliminate at least 450 jobs. Each of OxyChem's four business units will be responsible for worldwide management of its products and businesses, eliminating a separate international division. The realignment also will consolidate some logistical operations, provide more efficient delivery of products, and together with a reengineering program under way save about $100 million/year.
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