U.S. BRIEFS

REFINING

AN EXPLOSION in a catalytic cracking unit at Citgo Petroleum Corp.'s Lake Charles, La., refinery killed three employees and injured 12. Citgo has shut down the unit until further notice. The blast and resulting fire, which was allowed to burn itself out, occurred while the cat cracker was being brought back on stream after several weeks of maintenance work. The cause is under investigation.

CLARK OIL & REFINING CORP., Houston, let a $60 million contract to M.W. Kellogg Co., also of Houston, to design, procure, and manage construction of a hydrotreater, hydrogen plant, and related offsite facilities at its 60,000 b/sd Wood River refinery in Hartford, 111. Kellogg expects the 24,000 b/d hydrotreater and 7 MMcfd hydrogen unit to be on stream by mid-1993. Based on Exxon Corp.'s hydrotreating technology, the project will be designed to meet new Clean Air Act emission guidelines for distilled products.

CITGO PETROLEUM CORP., Tulsa, acquired the remaining 50% of Seaview Oil Co., Paulsboro, N.J., from Seaview Petroleum Co. LP for an undisclosed price (OGJ, Dec. 10, 1990, p. 27). Seaview Oil will operate as a unit of Citgo.

EXPLORATION

SEAGULL ENERGY CORP., Houston, 1 OCS-G-9012 wildcat off Texas in Brazos Block 397 cut 60 ft of gas pay and flowed 12.5 MMcfd through a 1/2 in. choke with 2,216 psi flowing tubing pressure from perforations at 6,910-62 ft. Working interests in the well, in 80 ft of water about 22 miles south of Freeport, Tex., are operator Seagull 40%, Ashland Exploration Inc. and Southwestern Energy Production Co. 25% each, and Hardy Oil & Gas USA Inc. 10%. Seagull plans more drilling and will begin production in 1992.

AMOCO PRODUCTION CO. 1 Bobcat Ridge Unit wildcat, in the Arkoma basin of Southeast Oklahoma, flowed a combined 9.8 MMcfd of gas from two zones in Pennsylvanian Spiro. The well, Amoco's ninth major Arkoma gas discovery in 2 years, is on the Ouachita thrust belt in Latimer County, about 5 miles southeast of Wilburton Okla., and 10 miles southwest of Red Oak gas field.

MINERALS MANAGEMENT SERVICE estimates hydrocarbon potential of the Chukchi Sea off Alaska at 6 billion bbl, not 6 million bbl as reported incorrectly (OGJ, Mar. 4, p. 16).

GENERAL ACCOUNTING OFFICE says it will cost the federal government $1 billion to buy back 123 offshore leases from the oil industry. Congress has ordered the government to consider buying back 27 leases issued off North Carolina, 73 in the Gulf of Mexico, and 23 in the North Aleutian basin off Alaska. GAO said industry has spent $889.4-970.7 million on bonuses, delay rentals, and interest and has spent as much as $42.5 million to explore the leases.

PIPELINES

LAKEHEAD PIPE LINE spilled about 630,000 gal of oil at Grand Rapids, Minn., from a 60 in. rupture along a weld on a longitudinal pipe seam. The company said more than 250,000 gal had been recovered by presstime using vacuum pumps and 7,000 gal tanker trucks. Some of the oil flowed into frozen Prairie River, and Lakehead planned to cut the ice out in blocks and recover trapped oil when the ice melts. It sighted no oil at four boom sites downstream and said seepage into the soil around the leak was slight.

NORTHERN NATURAL GAS CO. placed in service the 20 in., 92 mile extension of its western Oklahoma pipeline through Roger Mills County, Okla., and Wheeler, Gray, and Roberts counties, Tex. It also acquired a 58 mile Anadarko basin pipeline through Custer and Roger Mills counties.

PENNSYLVANIA REPUBLICAN Rep. Curt Weldon filed a bill to require the gas industry to install excess flow valves in all new or renovated distribution systems. The National Transportation Safety Board has been advocating the installation of the valves to limit the extent of gas distribution line accidents.

DRILLING-PRODUCTION

CONOCO INC. signed a letter of intent to buy San Juan basin oil and gas lease interests from Mesa LP, Dallas, for about $165 million. The purchase includes about 82,000 net acres of Cretaceous Fruitland gas producing leases in Northwest New Mexico and Southwest Colorado. It will increase by about 50% Conoco's gas reserves in those two states. The companies hope to sign a final contract by mid-March and expect to close the sale in April.

MESA LP completed the sale of some of its Oklahoma and Texas Panhandle leases to an undisclosed buyer for about $74 million, subject to adjustment, plus about $6 million in related assumed debt. Mesa also may receive another payment of as much as $10 million in April 1994, depending on gas prices through 1993.

POGO PRODUCING CO., Houston, plans to further develop Gulf of Mexico Eugene Island Blocks 211 and 212 and Ship Shoal Block 175, where it is producing about 1,200 b/d of oil and 6 MMcfd of gas from five Pliocene wells from pay at 11,000-13,500 ft. Pogo agreed to acquire Norfolk Energy Inc.'s 8 1/3% interest in Eugene Island 212 field for $5 million, increasing its total interest to 33 1/3%.

CONOCO INC. is offering for sale its interests in 30 leases, operated and nonoperated, in Lea and Eddy counties, N.M. Bids are due Apr. 8, and sale date will be May 1.

NAHAMA & WEAGANT ENERGY CO., Bakersfield, Calif., plans to drill 35-40 wildcat and development wells during the next 15 months and is seeking to buy more oil and gas reserves. It increased its proved oil and gas reserves by 110% last year to 21 bcf equivalent as of Jan. 31, 1991.

COMPANIES

TRANSCONTINENTAL GAS PIPE LINE CORP. agreed to pay $21 million cash to American National Petroleum Co., Houston, and an undisclosed affiliated partnership co-plaintiff in settlement of a lawsuit against Transco. American National expects to realize an after tax net income of about $12.3 million from its share of the payment.

AN AMERICAN PETROLEUM INSTITUTE study showed oil company profitability in 1990 was below that of other companies surveyed for the seventh straight year. API said the rate of return for 20 leading oil companies was 12.8%, compared with 13.9% for a group of 90 nonoil manufacturing firms.

GAS PROCESSING

ENRON LIQUID FUELS CO., Houston, will build and operate one isomerization unit each at its Bushton, Kan., and Geismar, La., gas processing plants to convert butane to isobutane. Enron said they will help meet an expected increase in demand for low vapor pressure, high octane gasoline feedstocks resulting from Clean Air Act of 1990 emissions standards.