INDUSTRY BRIEFS

Corrections

Heritage Oil & Gas Co. Ltd., made an irrevocable bank guarantee to the government of Uganda for $200,000 to back exploration obligations under an agreement, not $200 million, as reported incorrectly (OGJ, Feb. 3, 1997, p. 34).

Vermilion Resources Ltd.,
Calgary, purchased from Esso France unit Esso Rep six oil fields in the Aquitaine basin, including Parentis field, as well as six other fields in the Paris basin. Esso Rep will retain Chaunoy, Vert-le-Grand, and Itteville fields in the Paris basin and Cazaux, Les Arbousiers, Les Pins, and Courbey-Cap in the Aquitaine basin. The six fields being retained were incorrectly reported as part of the sale package (OGJ, Mar. 31, 1997, p. 32).

Drilling-production

Enterprise Oil plc, London, and BP Exploration Operating Co. Ltd. swapped interests in three U.K. North Sea fields. Enterprise will receive BP's 42.79% interest in Block 23/27 Pierce discovery, of which it already held 31.2%, and will assume operatorship. In return, BP will take Enterprise's 24.05% interest in Amethyst and 13.5% in Ravenspurn North gas fields. Enterprise plans to develop Pierce with a storage and production vessel tied back to wells in two subsea clusters. Enterprise hopes to receive project sanction in mid-1997, aiming for first oil in third quarter 1998 (OGJ, July 15, 1996, p. 23).

Talisman Energy Inc.,
Calgary, which acquired interests in Beatrice, Buchan, and Clyde fields in the North Sea late in 1996, disclosed its share of production from the fields is averaging 23,000 b/d. Its North Sea production is 72,000 b/d of oil equivalent, an increase of 44% from a year ago. Separately, Talisman reached agreement with BHP Petroleum Pty. Ltd. to acquire BHP's 17.5% interest in two blocks adjacent to Clyde, Blocks 30/18 East and 30/18 West; Talisman's interests will be 30% and 18.75%, respectively. Also, Talisman acquired North Sea interests from Kerr-McGee (U.K.) plc, including an additional 25% interest in Beatrice field and Nigg terminal (OGJ, Dec. 23, 1996, p. 39).

Talisman
disclosed its first operated horizontal development well in Clyde field is successful. The well came on production Mar. 23 at an initial rate of 1,800 b/d and rose to 3,020 b/d. Talisman expects output to continue to increase as the well produces. Its interest in the field is 51%. The company expects to drill two additional horizontal wells in the field this year.

Norsk Hydro AS
let a $57 million contract to Kvaerner AS, Oslo, for modification and hook-up work in Oseberg field center off Norway. Work will include tie-in of Oseberg South and East satellites and hook-up of Oseberg D platform to the complex. Fabrication will take place at Kvaerner's Egersund yard in Norway. Offshore installation work is due for completion by Nov. 1, 1999.

Venoco LLC,
Santa Barbara, Calif., acquired a 50% working interest in South East Hastings field in Galveston County, Tex., from Cross Timbers Oil Co., Fort Worth. The field is producing about 450 b/d of oil equivalent from five wells. Texas properties now represent 25% of Venoco's production, and the company will continue to pursue Texas property acquisitions with exploitation potential. Venoco's principal activities are in California and Texas.

Companies

Petro-Canada, Calgary, sold non-core oil and gas assets to more than a dozen buyers for $215 million (Canadian). Proceeds will be reinvested in western Canada. Properties sold produce about 62 MMcfd of natural gas and 4,200 b/d of oil and natural gas liquids and have estimated reserves of 136 bcf of gas and 7.7 million bbl of oil.

PanEnergy Corp.,
Houston, and Duke Power Co., Charlotte, N.C., won shareholder approval for their proposed $7.7 billion merger (OGJ, Feb. 3, 1997, p. 19). But consumer group Citizen Action is asking the U.S. Securities and Exchange Commission to investigate the merger as a possible violation of the Public Utility Holding Company Act. The deal, which has received most federal and state regulatory approvals, still needs Federal Energy Regulatory Commission approval.

Apache Corp.,
Houston, and partners in the Harriet joint venture off Australia will supply about 40 bcf of natural gas for 10 years to Australia's Boral Energy Resources Ltd. The deal is covered by a letter of intent. Apache recently disclosed a supply deal with Wiluna Mines Ltd. (OGJ, Apr. 28, 1997, p. 44). Gas will be used to supply the $900 million (Australian) Murrin-Murrin nickel-cobalt project in Western Australia.

TransTexas Gas Corp.,
Houston, received federal antitrust approval under the Hart-Scott-Rodino Act for the proposed $1.1 billion sale of its TransTexas Transmission Corp. unit to First Intercontinental Leasing Trust, a group of leasing companies managed by GATX Capital Corp. The trust subsequently will lease and/or sell substantially all of the assets to an undisclosed major oil company.

Safety

U.S. Minerals Management Service scheduled a June 10 workshop in Houston to discuss possible development of a performance-based training program for Outer Continental Shelf oil and gas activities. The program would train operator, lessee, and contractor employees in well control or production safety system operations, focusing on results and not the process by which employees are trained.

Exploration

Triton Energy Ltd., Dallas, discovered a fifth field on Block A-18 in the Malaysia-Thailand Joint Development Area in the Gulf of Thailand (OGJ, Jan. 27, 1997, p. 26). Its 1 Senja discovery well, drilled to 7,600 ft TD in about 179 ft of water in the northwest corner of the block, flowed at a combined rate of 2,725 b/d of oil, 39 MMcfd of gas, and 368 b/d of condensate from intervals at 4,756-6,986 ft through chokes of 24/64-2 in. with 409-2,209 psi flowing tubing pressure. Triton plans to drill additional exploratory wells on the block and appraise and delineate Bumi field.

Pinnacle Oil International Inc.,
Calgary, and Encal Energy Ltd., Vancouver, B.C., formed a 3-year venture to jointly explore for hydrocarbons in western Canada using Pinnacle's stress field detector technology. The Encal-operated venture will operate in areas where Encal has an active exploration program, but Encal is not required to contribute any undeveloped acreage. Encal will pay 70% of the capital costs of exploration; Pinnacle will fund the remainder.

Sonat Inc.,
Birmingham, Ala., disclosed its 3 Cook well, in the Cotton Valley pinnacle reef trend Bear Grass area, flowed at a rate of 35 MMcfd with flowing wellhead pressure of 6,750 psi through a 31/64 in. choke (see map, OGJ, Mar. 3, 1997, p. 25). The Leon County well, completed at 15,333-15,740-ft, had the second-largest initial flow rate from any of Sonat's pinnacle reef wells to date. Sonat believes the well has 60-70 bcf of reserves.

Sonat
is operating six of the 16 rigs currently at work in the Cotton Valley pinnacle reef trend and participating in four 3D seismic surveys (OGJ, Mar. 10, 1997, p. 32). Three of the rigs are drilling exploratory wells, including 1 Ryon, Sonat's first well in the Tri-Cities area in Henderson County. Sonat is drilling two reef acceleration wells and working over a well in the Bear Grass area. It plans to keep six rigs running in 1997.

Geothermal

Indonesia's Mines and Energy department awarded Marathon Power Indonesia Ltd. and Indonesian partner, Paramarthacitra Mulia pt, rights to explore the Suoh-Sekincau geo- thermal prospect and develop, own, and operate a steam field and power plant. Initial plant size will be 110 MW. But the prospect, in South Sumatra's Lampung province, has the potential to yield as much as 400 MW of electricity for 30 years. Marathon holds an 85% project interest, Paramarthacitra the remainder.

Power

Coastal Corp., Houston, completed construction-related financing for a $154 million, 125-MW power plant to be fired by fuel oil at Sheikhupura, Pakistan, 40 miles west of Lahore, in Punjab province. The project, managed by a 90% Coastal-owned unit of Saba Power Co. (Pte.) Ltd., complements a 140-MW power plant Coastal is building at Quetta, Pakistan. Thirty-year agreements are in place to supply power for the government of Pakistan and the Pakistan Water and Power Development Authority and to purchase fuel oil from Pakistan State Oil Ltd. Babcock & Wilcox Co., Alliance, Ohio, is handling construction, procurement, and engineering.

Exports-imports

Canada's National Energy Board approved natural gas export licenses to various companies totaling 333.4 bcf for periods of 10-16 years. Supplies destined for the U.S. Northeast starting Nov. 1, 1997, are: Coastal Gas Marketing Co., 51 bcf, through Oct. 31, 2007; Enron Capital & Trade Resources Corp., 56 bcf through Nov. 1, 2007; and PanEnergy Marketing Ltd. Partnership, 31.9 bcf through Oct. 31, 2007. NEB also approved three export licenses for ProGas Ltd., Calgary, totaling 145.5 bcf from May 1, 1997, to Oct. 31, 2012, for various markets in the U.S. Midwest and Northeast.

Russia's
Gazprom reportedly clinched a $13.5 billion deal to supply gas to Turkey. Under a 25- year agreement, Turkey will increase its imports of Russian gas to 30 billion cu m/year by 2010 from 3 billion cu m/year at present. Turkey imports Russian gas via an 8 billion cu m/year pipeline through the Balkans. Capacity will be expanded to 14 billion cu m/year. Gazprom and Turkey's government have also agreed to build a 1,160-km pipeline through eastern Turkey, with capacity to import 16 billion cu m/year.

Pipelines

A joint venture of Amoco Canada Petroleum Ltd., NOVA Gas Transmission Ltd., and AEC Pipelines Ltd., all of Calgary, will set up a single ethane pipeline system within Alberta to connect their existing pipelines for a more efficient transportation system. Alberta Ethane Development Co., a new entity, will operate the system. An open season is set for Apr. 29-June 13. The system is slated to begin shipments Jan. 1, 1999. It's linked to expansion plans by Alberta-based petrochemical manufacturers.

Petrochemicals

Amoco and NOVA, planning a $570 million expansion (Canadian) of petrochemical capacity at Joffre, Alta., disclosed additions there will increase total new investment at Joffre to more than $1.3 billion. Their planned ethane pipeline system will move liquids from gas extraction plants at several Alberta locations to petrochemical plants at Joffre and Fort Saskatchewan. Ethane markets include the U.S. Midwest and Ontario.

BP Chemicals Ltd.
and joint venture partners Korea Alcohol Industrial and Sumitomo Corp. plan to expand capacity of their International Esters Co. plant at Ulsan, South Korea. The plant will be debottlenecked by applying a new BP solvents process to raise capacity to 75,000 metric tons/year of ethyl acetate and butyl acetate from 45,000 tons/year of ethyl acetate. The upgrade is expected to be complete early in 1998. The plant takes feedstock from a nearby acetic acid plant operated as a BP/Samsung joint venture.

Norsk Hydro AS
let contract to M.W. Kellogg Ltd., London, for detailed engineering, procurement, and construction assistance for modernization of an ammonia plant at Porsgrunn, Norway. The upgrade is due for completion in 1999 and will increase ammonia capacity to 1,450 metric tons/day from 1,250 tons/day. The award follows a 1-year study and basic engineering project by Kellogg.

Koch Industries International,
Venezuela's Polar Group, Petroleos de Venezuela SA unit Proseca, and Inelectra SA unit Inepropil, formed a joint venture to market about 132,000 metric tons/year of propylene. The group plans an initial investment of $70 million, primarily to build a propylene plant near the Cardon refinery in Venezuela's Falcon state. The complex is due to come on stream by January 1999. Interests in the Propileno de Falcon CA JV are Koch and Proseca each 35% and Polar and Inepropil 15%.

Lubes

Mobil Oil Pakistan (Private) Ltd. formed a joint venture with Pakistan's Army Welfare Trust to invest $60 million in a 25,000-30,000-metric ton/year lubricant oil and liquid petroleum gas storage and blending plant and related distribution/marketing operations in Pakistan. Mobil expects the JV, Mobil Askari Lubricants Ltd., to meet 10-20% of the 300,000-ton/year Pakistani lubes market in the next 3-5 years.

Marketing

Giant Industries Inc., Scottsdale, Ariz., will acquire 96 existing service station/convenience store outlets and seven outlets under development from Thriftway Marketing Corp., Farmington, N.M. Outlets are in New Mexico, Arizona, Colorado, and Utah. The deal includes 16 truck transports, 21 product trailers, and certain other transportation assets. At closing, Giant will pay $16 million for an undetermined number of retail outlets, as well as Thriftway's transportation operations; remaining retail outlets will be leased for 10 years, with purchase options during this period for an additional $23 million.

Terminals

Hungary's Crude Storage Co. let an $86.5 million contract to Bouygues SA, Paris, for construction of crude oil storage tanks. Work will include building six 80,000 cu m capacity crude oil storage tanks at each of two refineries operated by Crude Storage shareholder and Hungary's state oil company MOL Rt. The 12 tanks will have carbon steel double walls and floating roof double decks. Delivery is scheduled by yearend 1998.