Industry Briefs

Labor

Norway's strike by mobile offshore unit workers was ended by the government, which persuaded unions and operators to accept arbitration over a long-running pay dispute. Trans- ocean Offshore Inc., which had three drilling rigs immobilized by the strike, expected its rigs to be fully operational this week.

NGL

Promix LLC, a joint venture of Koch Hydrocarbon Southeast Inc., Dow Hydrocarbons & Resources Inc., and Shell Fractionation Inc., will double capacity at its Napoleonville, La., NGL plant. Current capacity is 62,500 b/d of NGL. Completion is slated for May 1998. The project calls for installation of ultra-fractionation trays.

Pipelines

Malaysia's government approved a $2 billion project to build a 2 million b/d, 190-km, buried oil pipeline linking Alor Setar in Malaysia's Kedah state with Sai Buri, Thailand (OGJ, Jan. 13, 1997, p. 30). The line will ease tanker congestion in the Malacca Strait. Three groups from Malaysia, Thailand, and Japan will form a joint company by yearend to oversee the project. Construction will begin in 1999, and start-up is slated for 2002. The Japanese group includes Chiyoda Corp., Mitsui & Co., Marubeni Corp., and Nippon Yusen KK. The Malaysian group includes Petronas, East-West Bridge, and Kedah state.

Georgia's government
let contract to SNC-Lavalin Inc., Calgary, to conduct a feasibility study for moving Caspian oil through Georgia along the Baku-Supsa route. An existing 100,000 b/d pipeline could be doubled in capacity. Work would include laying an 83-mile segment from Akstafa on the Georgian-Azerbaijani border to Sangori, Georgia.

Empire Oil & Gas NL,
Perth, hired CalEnergy Gas (UK) Ltd., a subsidiary of Omaha's CalEnergy Co. Inc., to study Empire's Gin Gin tight sands gas field for possible development. Gin Gin, about 80 km north of Perth, flowed gas during limited production tests in the 1970s, but no work has been done since. The field is estimated to hold 500 bcf of recoverable gas. Seismic surveys, drilling, and hydraulic fracturing are planned. The first well could be ready for a long-term production test by July 1998, with a second well to follow in 1999.

Power

Brazilian regional utilities Eletrosul and Furnas struck a 20-year power purchase agreement with a combine of two Enron International Inc. subsidiaries. The companies will deliver 1,000 MW of electric power from Argentina to Brazil. The winning bid was $27.50/MW-hr. Delivery will begin by fourth quarter 1999. Enron will construct transmission lines and a conversion station, connecting the two countries' power grids for the first time.

Exploration

Amoco Corp. discovered its second gas field in 3 weeks off Trinidad (OGJ, Sept. 22, 1997, p. 42). Renegade-44 miles southeast of Galeota Point-holds more than 600 bcf of gas, plus oil and condensate. The well was drilled in 230 ft of water to 12,900 ft TD and cut more than 250 ft of net gas pay in four sands and one oil zone more than 30 ft thick. Amoco Trinidad Oil Co. will increase its gas production from the current 350 MMcfd to more than 1 bcfd by 2000. It will supply 430 MMcfd to Atlantic LNG Co.'s LNG export plant at Point Fortin, Trinidad, and 350 MMcfd to new industrial customers (OGJ, Dec. 16, 1996, p. 12).

Pioneer Natural Resources USA Inc.,
Irving, Tex., signed a 1-year technical cooperation agreement with South Africa's Soekor (Pty.) Ltd. for Block 13A/14A off Port Elizabeth, South Africa (see map, OGJ, Sept. 8, 1997, p. 92). Pioneer has exclusive rights to study and negotiate an exploration sublease with Soekor for the 2 million acre area. Water depths on the oil-prone block don't exceed 200 m.

Robertson Research International Ltd.,
Llandudno, U.K., agreed with Kazakhstancaspishelf Joint Stock Co. to produce a joint geological survey report on the Kazakh sector of the Caspian Sea. The study is scheduled for completion in January 1998, ahead of an international tender for offshore licenses. The report will be considered an official document for the licensing round.

PanCanadian Petroleum Ltd.,
Calgary, will spud a wildcat at Shoal Point off Newfoundland early in 1998. The well, with an estimated cost of $9 million, will be drilled in the Gulf of St. Lawrence. PanCanadian and Hunt Oil Co., Dallas, each hold a 37.5% interest in the lease, and Mobil Oil Canada Properties holds 25%. Hunt will not participate in the well and is looking for a farm-out partner. The area is near the Port au Port Peninsula on the west coast of Newfoundland, scene of a recent flurry of exploration activity.

Apache Corp.,
Houston, completed testing of its Beni Suef 1X discovery well in Egypt's western desert (OGJ, Sept. 29, 1997, p. 48). The well flowed 7,000 b/d of oil from Kharita and Bahariya formations. During tests of the Bahariya formation, the well flowed 1,776 b/d of 39.5° gravity oil through a 1-in. choke with flowing tubing pressure of 67 psi from a 79-ft interval at about 6,700 ft.

SOCO International plc,
London, has persuaded the Petroleum Authority of Mongolia to expand its Blocks XIX and XX to the south and west. This will add 10,000 sq km of exploration acreage to SOCO's current 40,000 sq km there. SOCO CEO Ed Story said, "We are encouraged by our recent seismic acquisition program, which indicates that the Tamtsag basin deepens to the south and extends beyond our existing contract areas. Expanding the contract area will enable us to exploit the knowledge we have gained for our exploration efforts to date" (OGJ, Oct. 28, 1996, p. 90).

Tankers

An explosion on the Croatian oil tanker Tomislavgrad killed one person and severely injured another. The explosion occurred while the tanker was offloading at the port of Split in southern Croatia. A subsequent fire was brought under control. An inquiry is under way.

Refining

Uzbekistan started up the first phase of its $497 million, 50,000 b/d Bukhara refinery, which it calls central Asia's largest (OGJ, Aug. 4, 1997, p. 23). The plant will process oil from Kokdumalak field and produce about 16,000 b/d of gasoline and 26,000 b/d of diesel, 33% of which will be exported. Plans call for a doubling of refinery capacity.

Japan's JGC Corp.
and Marubeni won a $625 million contract to build a refinery in Pakistan. The 100,000 b/d refinery, 900 km north of Karachi, will process Persian Gulf oil and produce kerosine starting in 2000. Pakistan formed a joint venture with an investment arm of Abu Dhabi National Oil Co. (Adnoc), which ran the bidding and will oversee construction. Adnoc will supply oil via an existing pipeline. Refined products will be sold in Pakistan. Project cost is about $900 million. The Export-Import Bank of Japan will provide $500 million, and Marubeni will lend $100 million.

Petroleos de Venezuela SA
(Pdvsa) started up what it calls South America's largest hydrogen plant. The 50 MMcfd plant-built, owned, and operated by a combine of BOC Gases, Murray Hill, N.J., and Foster Wheeler Power Systems Inc., Clinton, N.J.-is at Pdvsa's Amuay refinery. The hydrogen will be used to meet the refined product specifications of the U.S. and other countries and to improve feedstock flexibility. The refinery was recently linked with Pdvsa's nearby Card?n plant to produce the world's largest refining complex with a combined capacity of 940,000 b/d (OGJ, Aug. 25, 1997, p. 37).

Financing

Petroleo Brasileiro SA (Petrobras) will issue a 20-year, $200 million bond with Citibank as lead manager and a 10-year, $150 million LIRA bond with Chase Manhattan as lead manager. Proceeds will be used to further develop fields in the Campos basin off Rio de Janeiro state and to roll over outstanding debt. Petrobras currently has a $125 million, 8.75% bond expiring in 2001 and a $250 million, 10% bond expiring in 2006. The company recently issued a 3-year $150 million floating-rate note via Chase Manhattan. The Campos basin accounts for 70% of Brazil's 900,000 b/d of crude oil production.

Companies

Conoco Inc., Houston, and American Electric Power Co., Columbus, Ohio, agreed to form two jointly held companies to provide energy management and capital for industrial and large commercial customers. DuPont Co., Conoco's parent, will sign agreements with the new joint venture covering energy facilities at 16 of its U.S. plants and will add about 17 more in the next few years.

Terminals

Russia's Surgutneftegaz plans to build a 7.5 million metric ton/year oil terminal at Batareinaya Bay in the Gulf of Finland by 2000. The port, 40 miles from St. Petersburg, will cost $200 million; a 200-mile pipeline from the Kirishi oil refinery will cost $100 million. The port will accommodate two 60-70 dwt tankers at a time.

Drilling-production

An MI-8 helicopter carrying 19 passengers and a three-member crew crashed in the Caspian Sea on Oct. 2. At presstime, 10 bodies had been recovered. The only known survivor is being treated at a hospital. The crash occurred in Guneshi field. The helicopter is owned by Baku Invest Co. and chartered by State Oil Co. of the Azerbaijan Republic. Water depth at the crash site, about 100 km from shore, is 120 m.

Apache
will acquire from Mobil Corp.'s Ampolex Group three companies with interests in Western Australian properties. The purchase price of $310 million cash will be debt-financed. Of the total, $216 million is for properties with 41.2 million boe of proved reserves, and $85 million is for gathering, transportation, and marketing facilities. The remaining $9 million is the aggregate working capital of the companies. Apache operates all of the properties being acquired. The deal increases its interest in the Carnarvon basin's Harriet area-including pipeline and processing facilities-to 47.5% from 22.5% and boosts its interest in East Spar field to 55% from 20%.

U.S. Minerals Management Service
scheduled three more workshops for small producers to comment on its recently revised rule for valuing crude oil production from federal leases (OGJ, Sept. 29., 1997, p. 44). The workshops will be held Oct. 16 at the Bureau of Land Management office in Bakersfield, Calif.; Oct. 16 at the BLM office in Casper, Wyo.; and Oct. 21 at the BLM office in Roswell, N.M.

China National Offshore Oil Corp.
will develop Qinhuangdao 32-6 and Nanbao 35-2 fields in the central Bohai Sea, about 100 km from Tianjin. After appraisal drilling, Cnooc estimated the fields' combined reserves at 1.466 billion bbl of oil. Output is expected to reach 80,000 b/d when the project is completed in 2004. Total investment-including seven drilling platforms, two pipelines, and onshore facilities-will be about $900 million. The fields were discovered in 1995.

Kerr-McGee Corp.
will develop Ewing Bank 910 field in the Gulf of Mexico with a four-pile, stand-alone platform installed in 550 ft of water. Kerr-McGee will use it to complete two existing wells and drill two more production wells. The development includes Ewing Bank Blocks 910 and 954 and South Timbalier Block 320. Production of 3,500 b/d of oil will start at yearend 1998. Production will peak at 16,000 b/d of oil and 23 MMcfd of gas in mid-1999. Reserves are about 23 million boe.

International Petroleum Corp.
(IPC), Vancouver, B.C., completed four drill stem tests of an appraisal well on Block PM-3 in an area jointly administered by Malaysia and Viet Nam. North West Bunga Raya-1 flowed 78.1 MMcfd of gas and 7,016 b/d of oil from 217 ft of net pay in six zones through 36/64-28/10 in. chokes. The well was drilled to 10,510 ft TD to an angle of as much as 53°. IPC will develop Block PM-3's fields to reach production of 40,000 b/d of oil and about 250 MMcfd of gas at yearend 1999. Partners in PM-3 are Petronas Carigai Sdn. Bhd. 46.06%, operator IPC 26.44%, Sands Petroleum AB 15%, and PetroVietnam Exploration & Production 12.5%.

Petrochemicals

Four firms will jointly build, own, and operate an ammonia/urea complex in northeastern Venezuela. Petroquimica de Venezuela SA (Pequiven), Snamprogetti SpA, an affiliate of Koch Nitrogen Co., and a unit of Empresas Polar CA will build the plant at Pequiven's Jos? complex. Capacity will be 1.2 million metric tons/year of ammonia and 1.5 million tons/year of urea. Start-up is scheduled for 2000. Pdvsa subsidiary Cevegas CA will supply gas feed under a multiyear agreement. Pequiven and Koch Nitrogen will market the products, most of which will be exported.

Chevron Chemical Co.,
San Francisco, will conduct front-end engineering for a 750 million lb/year alpha olefins plant planned for one of its two Texas complexes at Baytown and Port Arthur. The plant will use Chevron technology and be expandable to 1 billion lb/year. Start-up is scheduled for mid-2000. Bechtel Corp. will perform engineering. The plant is part of Chevron's plan to develop a complete slate of normal alpha olefins products.

Gas marketing

Ruhrgas AG, Essen, will supply an additional 17 bcf/year of gas to Hungary's state oil and gas firm MOL Rt. during 1998-2010. Ruhrgas began deliveries to MOL in fall 1996 under an earlier 17 bcf/year contract intended to start diversification of Hungary's gas sources, which previously was limited to domestic production and imports from Russia. Ruhrgas said the deal reflects its increasing involvement in Hungary, where it has a 16% stake in Budapest Gasworks and 46% in Ddgaz Rt., the gas distributor for southwest Hungary.