INDUSTRY BRIEFS

Tankers

Chevron Corp. will acquire two new double-hulled tankers as part of a continuing fleet renewal program. Each 308,000-dwt tanker will carry about 2 million bbl of crude from the Middle East to Chevron's U.S. refineries. Carriers will be built by South Korea's Samsung Heavy Industries Co. Ltd. for delivery late in 1998 and early in 1999. Investment bank Cambridge Partners LLC, New York, will own the vessels; Chevron will operate them under a bareboat charter with an initial 8-year term and five 2-year options to 18 years.

Spills

Japanese and Russian officials stepped up efforts to clean up an estimated 27,000 bbl of heavy oil that a Russian tanker spilled along Japan's coast before the spill could reach Takahama nuclear plant, which supplies 10% of the power used in eight Kansai district prefectures. Seawater is used to cool the reactors of Takahama and four other nuclear plants along Wakasa Bay, near where the 13,157-ton Nakhodka tanker broke apart in a storm Jan. 2 (OGJ, Jan. 13, 1996, Newsletter). Moscow dispatched spill cleanup vessels to the site, and the Russian tanker owner accepted full responsibility. Slick was about 21 miles long and 330-660 ft wide at presstime last week.

U.S. Coast Guard issued the last of three rules to establish economically and technologically feasible structural and operational measures to reduce the threat of oil spills from single-hulled vessels. Coast Guard determined that no additional structural measures were economically feasible for industry.

LNG

Qatar Liquefied Gas Co. (QLGC) delivered its first cargo of liquefied natural gas early this month to Chubu Electric Power Co., Japan, under a 25-year contract. Qatar will export 2 million metric tons/year through 2000 and 4 million tons/year thereafter (OGJ, Dec. 30, 1996, p. 28). In 2000, Qatar will replace Indonesia as the largest LNG supplier to Chubu, providing 45% of company demand. QLGC is owned by the Qatari government, Japan's Mitsui & Co., and Marubeni Corp.

Pipelines

Den norske stats oljeselskap AS (Statoil) won approval from Norway's parliament to build Europipe II gas trunk line from Kaarsto, Norway, to Dornum, Germany. Pipe section manufacturing will begin in 1997. The $1.1 billion, 635-km pipeline will begin carrying Norwegian gas to central Europe in October 1999.

NOVA Gas International Ltd., Calgary, paid $30 million (Canadian) to increase its interest in Argentina's Transportadora de Gas del Norte (TGN) gas pipeline system to 19.1% from 14.4%, acquiring the additional interest from a group of Argentine and international financiers that sold its 13.9% interest to TGN partners. Gasinvest SA Group, which includes NOVA, holds 70% of TGN. Owners plan to invest an additional $300 million in TGN the next 3 years. System has a current volume of about 1.13 bcfd.

Drilling-production

Halliburton Co., Dallas, and Cairn Energy plc, Edinburgh, signed a gas purchase and sales contract with Bangladesh Oil, Gas & Mineral Corp. Contract followed approval by the state oil company of a rapid development plan for Sangu gas field on Block 16 off Bangladesh (OGJ, Nov. 11, 1996, p. 103). Field, discovered by Cairn last year, contains an estimated 1 tcf of gas. First gas is slated for delivery to Chittagong by April 1998.

Elf Exploration UK plc, Aberdeen, let contract worth about $50 million to three divisions of Dresser Industries, Dallas, for drilling and related services for developing the high-pressure, high-temperature Elgin and Franklin fields in the North Sea. Dresser's Baroid division will provide drilling and completion fluids services, while Sperry-Sun and Security DBS units will provide integrated drilling services. Reservoir pressures are expected to exceed 16,000 psi, while temperatures will top 400° F. at depths of more than 18,000 ft. Project is expected to last as long as 41/2 years, with at least 10 wells to be drilled.

TransTexas Gas Corp., Houston, tested its second Lodgepole well, 2-4 Dinsdale, at Dickinson, N.D., and a third, 1-3 Dinsdale, is drilling ahead. The 2-4 Dinsdale flowed 5,544 b/d of 41° gravity oil and 1.3 MMcfd of gas from Lodgepole carbonate reef perforations in a 140 ft oil column with 450 psi flowing tubing pressure. TransTexas estimates net oil reserves in the play could total about 10 million bbl of oil equivalent. Based on seismic, it plans to test two additional prospects, both 3D anomalies. First well, 1 Heart River, tested 6,355 b/d, a North Dakota record, the company said (OGJ, Dec. 9, 1996, p. 36).

Safety

U.S. Minerals Management Service plans to amend regulations governing quality assurance of offshore safety and pollution prevention equipment to reduce paperwork burden in existing rules while ensuring operators use the best available and safest equipment. Comment period closes Feb. 18. MMS also plans to alter the method it uses to assess civil penalties for violations of rules governing offshore operations, including a hike in the maximum civil penalty to $25,000/day/violation from $20,000/day/violation. Comment period closes Mar. 19.

Research

U.S. Justice Department's antitrust division received an application from the Gas Research Institute and eight major oil companies to join in research on through-casing resistivity logging. Approval of the application under the 1993 National Cooperative Research and Production Act would exempt the firms from antitrust prosecution.

Exploration

Apache Corp., Houston, currently attempting to log its F-1 test, sixth well drilled on Zhao Dong Block in China's Bohai Bay, disclosed its D-2 exploratory well drilled to 7,501 ft TD tested at a combined rate of 11,571 b/d of oil from perforations in five Minghuazhen and Guantao zones and a sixth lower Tertiary sand at 3,283-5,445 ft, finding 225 ft of net pay. Gravities were 15-27°. Operator Apache and XCL Ltd., Lafayette, La., hold equal working interests in the block. Including D-2, Apache has made five completions on the block since 1994. Results of D-2 are under evaluation.

Santa Fe Energy Resources Corp., Houston, signed a production-sharing contract with Indonesia's Pertamina for the 2.1-million acre Pagatan Block along Kalimantan's southern coast. Operator Santa Fe Pagatan Ltd., a Santa Fe unit, is obligated to drill at least one well in a 3-year primary term. It plans to focus initially on Akbar prospect in the block's shallow offshore portion. Depending on rig availability, drilling is planned in 1997. Unit Santa Fe Energy Resources (Southeast Asia) has five other Indonesian production-sharing contracts, including two productive blocks. Output from Central Sumatra's Jabung and Offshore Java's Tuban blocks is expected to begin this year (OGJ, Dec. 25, 1995, p. 33).

Saga Petroleum AS, Sandvika, Norway, operator of Petroleum License 199 in the Norwegian Sea, disclosed a gas/condensate find on PL 199 Block 6406/2, south-southwest of Smorbukk field, a part of Asgard field development. Northern part of the find extends into PL 134 block 6506/11. Block 6406/2-3 well is drilling ahead. Projected to about 17,716 ft, it is one of the deepest exploratory wells on the Norwegian shelf, Saga said. Two of five potentially productive reservoirs have been drilled. Saga, operator of PL 199 and PL 134, has 25% and 28% interests, respectively.

Jebco Seismic Ltd., London, completed a speculative 2D seismic survey of the area where the North Sea territorial waters of the U.K., Norway, Denmark, Germany, and Netherlands meet. Project provides ultrahigh-resolution regional data tying in locations of nine key wells, including the recent Siri and Fyfe discoveries. Survey focused on Tertiary and upper Cretaceous formations. Plans call for surveys of prime targets identified by the completed survey in spring 1997.

Kappa Energy Co. Inc., Calgary, received formal approval from joint operating partners as a participant and operator for a development project in Yemen. Contract for seismic work on the Al Ma'ber Block 2 property was awarded to Cie. Generale du Geophysique after tendering for completion by mid-March. First well is scheduled to spud in mid-1997. Independent reports estimate unrisked gross potential in the Qishn reservoir at more than 300 million bbl.

Companies

BHP Petroleum Pty. Ltd., Melbourne, sold all of its interests in Gasco, its Hawaiian synthetic natural gas and propane distribution unit, to Citizens Utilities Co., Stamford, Conn. Sale is subject to approval of Hawaii's public utility commission and federal regulators.

Indonesia's Pertamina will cut its work force by another 15,000-20,000 jobs during the next 5 years, following labor cuts of 13,000 during the last 3 years, as a result of Indonesia's expected sharp drop in oil reserves. Work force is now 34,000.

Amoco Canada Petroleum Ltd., Calgary, hired Lazard & Co., New York, to examine a sale or other options for Canmar Ltd., the marine drilling and services division acquired as part of the 1988 takeover of Dome Petroleum Ltd. Canmar was an active offshore driller in the Canadian and U.S. sectors of the Beaufort Sea and the U.S. Chukchi Sea. The division operates a fleet of four drilling units and six support vessels, which have been used in the North Sea and Southeast Asia after Beaufort drilling was shut down in the 1980s due to high costs and low oil prices.

Petrochemicals

Japan's Nissho Iwai Co. will buy a 30% stake in a $350 million methanol plant being built by Indonesia's state-owned fertilizer group PT Pupuk Kaltim on East Kalimantan. Another 19% share will be acquired by undisclosed U.S. and Asian companies. Construction of the 660,000-metric ton/year plant is slated for completion in September, with start-up expected by yearend.

Engro Chemical Pakistan Ltd., formerly a unit of Exxon Chemical, signed an $11 million loan agreement with Commonwealth Development Corp. for its Daharki urea expansion project in the Sindh province of Pakistan. Engro is hiking productive capacity of the plant to 850,000 tons/year from 750,000 tons/year. Project, slated for completion in March 1998, will cost about $59 million.

Phillips Petroleum Co. will expand its styrene-butadiene copolymer (SBC) output by 40% by building a new 100 million lb/year plant next to its Houston chemical complex. Construction, subject to board approval, is to begin in fourth quarter 1997 and finish in first quarter 1999. Phillips also licensed its SBC process to South Korea's Daelim Industrial Co., which will build a 90 million lb/year plant at Yochon, South Korea, slated to begin production in 1997.

Refining

U.S. Commerce Department's Foreign Trade Zones (FTZ) Board granted FTZ status for several refineries, exempting them from paying some import duties. New FTZ refineries are Texaco Inc.'s plant in Butler County, Kan.; Ashland Inc.'s plants in Boyd and Daviess counties, Ky.; Ashland's complex in Stark and Allen counties, Ohio; and Basis Petroleum Inc.'s plant at Texas City, Tex.

Farmland Industries let a lump-sum contract to TPA Inc., Dallas, for a grassroots oxygen injection system to be installed at the sulfur recovery plant at its Coffeyville, Kan., refinery. TPA will provide technology licensing, engineering, proprietary equipment, procurement, construction, and training. System will be owned by Tessenderlo Kerley Inc. and operated by Farmland. When the system starts up in first quarter 1997, sulfur recovery capacity from sour water stripper gas and amine acid gas will increase to 50 long tons/day from 30 tons/day.

Geothermal

Downer Group, Hong Kong, involved in geothermal projects in New Zealand, launched a $62 million (Australian) takeover bid for Century Drilling, Sydney. Century is involved in geo- thermal drilling in Indonesia, where it has five rigs at work.

Indonesia can increase geothermal electric generation capacity to 18,000 MW from only 300 MW currently, according to energy and mining minister I.B. Sudjana. The country plans to hike geothermal generation capacity to 1,000 MW by March 1998. Indonesia is trying to diversify from its reliance on crude oil. Rising energy demand of about 7%/year and rapidly depleting oil reserves could turn the nation into a net energy importer by 2005.

Power

TransCanada PipeLines Ltd., Calgary, acquired a 10% interest in the $2.5 billion Paiton power-generation project in Java from the 12.5% interest held by General Electric Capital Corp. Project, under development for 5 years, includes two 615-MW, coal-fired power plants. One is scheduled for completion in November 1998, and the second by May 1999.

Oilsands

Amber Energy Inc., Calgary, paid $13.7 million (Canadian) for a 100% working interest in a 17,920-acre federal oilsands lease in Alberta's Wabasca area. Purchase increases Amber's contiguous holdings in the area to 52,160 acres. Amber expects to complete an initial 24-well horizontal drilling program in March.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.