INDUSTRY BRIEFS

Exploration

Gulf Canada Resources Ltd., Calgary, 1 Tetangga gas well, owned 54% by Gulf, cut 90 ft of gas pay adjacent to last year's Sumpal gas discovery in central Sumatra. Production tests will be run late in April on the well, 2.5 miles from 2 Sumpal well, drilled in 1996. Estimated gas reserves in Sumpal are 900 bcf-3.9 tcf, with a carbon dioxide content of about 36%. Talisman (Corridor) Ltd. has a 36% interest in the Tetangga well and Indonesia's state-owned Pertamina a 10% interest.

Gulf Canada 1 Mengoepeh wildcat flowed on test at a rate of 1,296 b/d. The well is the first discovery on the 1.7 million acre Tungkal Block production-sharing contract, in which Gulf has a 100% interest. Gulf expects to begin delineation drilling on the block in August after drilling two more wildcats.

Petroleum Geo-Services ASA (PSG), Lysaker, Norway, will conduct Australia's first multi-client 3D seismic survey covering 3,100 sq km in the Carnarvon basin off Western Australia. Changes in legislation governing the confidentiality period of 3D seismic data made the survey possible. PGS will use its Nordic Explorer seismic vessel to conduct the survey in two phases, with final phase to be completed in fourth quarter 1997. Woodside Offshore Petroleum Ltd., Melbourne, is the survey's main sponsor.

Petroleos Mexicanos unit Pemex Exploracion y Produccion let a $6.5 million contract to Geovaluaciones SA de CV, the Mexican affiliate of Geophysical Inc., Englewood, Colo., to acquire 3D seismic data in hilly terrain in central Mexico's Veracruz state. The project, expected to start June 1, requires occasional helicopter use and is to be complete in about 9 months.

U.S. Minerals Management Service issued a notice for proposed Lease Sale 168 in the western Gulf of Mexico. The sale is scheduled for August in New Orleans. The notice is available from MMS' New Orleans office. Final notice of sale will be issued about 30 days prior to the bid opening.

Companies

Talisman Energy Inc., Calgary, is exploring legal action against Wascana Energy Inc., Calgary, over issues related to its takeover bid for Wascana. Talisman refuses to increase a $1.7 billion (Canadian) offer for Wascana (OGJ, Feb. 24, 1997, p. 44). Canadian Occidental Petroleum Ltd. offered $1.91 billion for Wascana, including assumption of debt. Talisman said Wascana did not give it the same access to financial data that it gave other companies.

Mobil North Sea Ltd. sold its 57.5% interest in U.K. North Sea Kyle oil discovery to license partners Ranger Oil Ltd., Premier Oil plc, London, and Croft Oil & Gas plc, Glasgow, for an undisclosed sum. New license interests are operator Ranger 40%, Premier 35%, and Croft 25%. Kyle lies on Block 29/2c. Ranger plans to drill an appraisal well this year followed by an extended well test, with a view toward early development.

Equitable Resources Energy Co., Houston, a unit of Pittsburgh-based Equitable Resources Inc., is considering sale of its western U.S. and Canadian oil and gas properties with estimated proved reserves of 89 bcf of gas and 13.1 million bbl of oil. Properties are mainly in Utah's Uinta basin; Wyoming's Green River, Powder River, and Wind River basins; the Williston basin of Montana and North Dakota; and western Alberta. The sale would enable Equitable to refocus its exploration and development effort in the Gulf of Mexico and Appalachia.

Unocal Corp. and PDV America, a unit of Petroleos de Venezuela (Pdvsa), reached agreement to restructure their Uno-Ven joint venture following Unocal's decision to focus upstream (OGJ, Jan. 6, 1997, p. 28). Unocal affiliates will own 100% of the partnership, which will continue to hold and operate petroleum coke operations not part of the deal, and PDV will receive all of Uno-Ven's refining and marketing assets and assume certain liabilities of those ventures. In a separate transaction, PDV also will acquire a petrochemical business from Unocal, terms of which were not disclosed.

Petrochemicals

Institut Francais du Petrole licensed its Eluxyl high-purity paraxylene separation and production process to China's Sinopec for a new plant to be built at Zhenhai, south of Shanghai. The plant will have paraxylene capacity of 450,000 metric tons/year, the largest in China, and is slated to come on stream in summer 1999.

Mobil Chemical Co. finished building a 275,000 metric ton/year paraxylene plant at Beaumont, Tex., 2.5 months ahead of schedule and $12 million under budget, said contractor Bechtel. The plant will produce paraxylene for Mobil's olefins and aromatics complex starting in May (OGJ, Oct. 14, 1996, p. 36).

Koch Industries International, a unit of Koch Industries Inc., Wichita, and three partners formed a joint venture to build and operate a 132,000 ton/year polymer-grade propylene splitter slated to come on stream next to Venezuela's Maraven SA refinery at Cardon by yearend 1998. Partners Koch 35%; Productos Especiales Proesca CA, a unit of Pdvsa, 35%; Cerveceria Polar CA, a beverage producer and bottler and Venezuela's largest private company, 15%; and Inepropil, a unit of a Venezuelan engineering firm, 15%, formed Pro- pileno de Falcon Profica CA to build and operate the unit. Maraven will supply propane and propylene feedstock under a 20-year agreement, and finished polymer-grade propylene will be exported to international markets.

Taiwan's output of ethylene reached a record 955,111 metric tons/year in 1996, up from 847,335 tons/year in 1996, reported the Petrochemical Industry Association of Taiwan. That reflects strong growth in demand from midstream and downstream users that boosted their capacity last year. Taiwan's state-owned Chinese Petroleum Corp. (CPC) operates three naphtha crackers with combined ethylene capacity of 1.015 million tons/year. The completion of Taiwan's sixth naphtha cracking complex by Formosa Plastics Group is expected to add 450,000 tons/year of capacity by yearend 1998 and 900,000 tons/year by 2001.

CPC and partners designated Pingtung County in southern Taiwan as the site for a planned $10.9 billion naphtha cracking complex. The group hopes to complete an environmental impact study and acquire a building site before the end of June. CPC will hold a 35% interest in the project, which is to include a naphtha cracker and at least 10 downstream petrochemical plants. Other major partners in the venture are Chinatrust Group 35% and Lee Chang Yung Chemical Industrial Co. 10%.

Saudi Basic Industries Corp. (Sabic) affiliate National Industrial Gases Co. let contract to Linde AG, Hoellriegelskreuth, Germany, and Linarco Ltd., Riyadh, to build an air separation plant at Yanbu. The plant will produce 1,200 metric tons/year of oxygen and 1,500 tons/year of nitrogen for Sabic petrochemical plants at the site (OGJ, Dec. 2, 1996, p. 38). The project will cost about $107 million, with completion due in 27 months.

Refining

Philippines' Petron Corp. let contract for a $113 million expansion of its Bataan refinery to a partnership of Japan's Mitsui & Co. and South Korea's Daelim Engineering. Petron also will spend more than $35 million to upgrade distribution facilities for handling aviation fuel, LPG, and lubricating oils.

India's Gujarat refinery will see an expansion program to include installing a new 60,000 b/d distillation unit and revamping the existing fluid catalytic cracking and feedstock preparation units. The refinery processed about 207,000 b/d of crude in fiscal 1996-97, up from 203,400 b/d the prior fiscal year. The hydrocracker complex, commissioned in 1993 to upgrade heavy residues for middle distillates, reached record output of 24,000 b/d in 1996-97, and the refinery also saw record output of LPG, gasoline, auto diesel, and resid. The refinery is building a sulfur-treating unit to cut the sulfur in diesel to 0.25 wt % and expects to produce unleaded gasoline soon.

Marketing

Petroleo Brasileiro SA (Petrobras) and Argentina's YPF SA agreed to form a joint venture to market petroleum products in Brazil and Argentina, including the purchase, resale, and distribution of liquid and gaseous fuels; transportation, warehousing, and marketing of petrochemical and refined products; and the pursuit of export and import markets. Petrobras will operate through its Petrobras Distribuidora SA (BR) unit. YPF gasoline stations in Argentina will incorporate BR logos, and BR retail outlets in Brazil will display the YPF logo. The venture plans to invest about $730 million in projects during the next 5 years.

Japan's Mitsubishi Corp. plans to establish a chain of service stations in Taiwan. The company currently operates one service station on the island and will team up with an unidentified local partner to open at least 20 new outlets during the next 3-5 years.

Government

U.S. Bureau of Land Management proposed a rule to streamline and amend its rules for Indian tribes that perform oil and gas inspection and enforcement activities on tribal lands. The rule would increase funding for cooperative agreements with tribes to 100%, the same level the Minerals Management Service pays, from the current 50%.

MMS proposed a rule that would let it give third-party proprietary information to appellants and entities involved in administrative appeals and other alternative dispute resolution procedures when such data are the basis for an MMS assessment. At present, the Trade Secrets Act prohibits MMS from releasing commercial or financial information. The proposed rule would provide the legal authority to release the data, if the recipients sign confidentiality and liability agreements.

Drilling-production

Shell U.K. Exploration & Production let a 5-year, $120 million contract to Halliburton Energy Services, Houston, to supply completion equipment for Shell Expro's oil and gas developments in the northern and southern U.K. North Sea, and affiliate Nederlandse Aardolie Mij. BV's onshore and offshore developments in the Netherlands. The equipment will include tubing and wireline-retrievable safety valves, sliding side doors, landing nipples, and water injection valves.

Shell Expro extended by 1 month to June 2 the deadline for submission of bids for disposal of Brent spar. Six shortlisted contractors are working on detailed proposals for removal of the derelict loading buoy. Suggestions include onshore scrapping, re-use of topsides as a training center, and use of the concrete body in a coastal protection scheme (OGJ, Jan. 20, 1997, p. 24). Shell Expro's decommissioning manager reaffirmed the company's interest in doing the work correctly rather than quickly.

Gulf Canada's 9 Alur Siwaw well on Block A in northern Sumatra flowed on test at a rate of 41 MMcfd with 24% carbon dioxide. Block A output of as much as 140 MMcfd and 4,600 b/d of gas liquids is slated to start by late 1999.

Environment

U.S. Environmental Protection Agency is seeking comment on its Nov. 10, 1995, rule proposing to designate certain refinery waste streams as hazardous and not others. It also proposed to broaden existing Resource Conservation and Recovery Act exemptions for recycling of oil-bearing residuals and proposed to apply universal treatment standards under the Land Disposal Restrictions program to the wastes proposed for listing.

Pipelines

Norway's Den norske stats oljeselskap AS (Statoil) let a $130 million contract to Allseas Marine Contractors SA, Chatel-St. Denis, Switz., to lay the Europipe II and Ekofisk Bypass gas pipelines in the North Sea (OGJ, Jan. 20, 1997, p. 34). The work will occur in 1998 using the newly built Solitaire lay barge. Europipe II will carry about 20 billion cu m/year of gas from Kaarsto, Norway, to Dornum, Germany, starting in 1999. Ekofisk Bypass line will connect Statpipe to Norpipe, bypassing the Ekofisk production complex where the latter two lines currently link.

National Fuel Gas Supply Corp., Buffalo, N.Y., will seek approval for its 1998-99 Niagara Expansion project as two independent projects. The company plans to file with the Federal Energy Regulatory Commission next month for first-stage expansion capacity of about 100 MMcfd, with construction to begin this spring for projected service beginning November 1998. The second leg of the project would add at least 400 MMcfd from Canada to the Ellsburg-Leidy hub.

Power

Exxon Energy Ltd. and China Energy Investment Ltd., a unit of China Light & Power Co. Ltd. (CLP), signed a joint venture agreement to develop a 1,050-MW gas-fired power plant at Shenzhen, China, north of Hong Kong. The project will involve three 350-MW combined-cycle gas turbines and is to go on stream by yearend 1999. The agreement paves the way to negotiate details of a long-term gas supply contract from the Yacheng 13-1 gas field in the South China Sea, to be supplied by units of Exxon and CLP. Power plant interests are Exxon Energy and CLP 17.5% each; Chinese state firms 36%; and Kanematsu Power (South China) Co. Ltd. 29%.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.