INDUSTRY BRIEFS

Refining

Hungary's MOL will invest in a delayed coker for residue upgrading at its Duna refinery, with work starting early in 1998 and ending late in 2000, spending $450 million to convert heavy fuel oils into 10,000 b/d of products, mainly gasoline and gas oils. MOL also will build a hydrogen plant at the Duna refinery alongside the coker. It is slated to go on line by mid-2000. The projects are part of efforts to meet Hungary's goals for more environmentally benign refined products.

Russia's Tatarstan Republic let a contract worth more than $100 million to ABB Lummus Global, Bloomfield, N.J., to build a middle distillates hydrotreating complex at the Nizhnekamskneftekhim refining/petrochemical complex at Nizhnekamsk, 1,200 km east of Moscow, as part of a modernization program to reduce the sulfur content of kerosine and gas oil. The new complex will have a kerosine and gas oil hydrotreater, as well as hydrogen production, hydrogen recovery, amine, sour water stripping, sulfur recovery, and sulfur granulation units.

LPG

Shell (China) Ltd. and Singapore's Keppel Industrial Engineering Corp. formed a joint venture to meet LPG demand under phases two and three of China's expanding Suzhou Industrial Park, about 80 km west of Shanghai. An initial 448 b/d LPG plant came on stream in May. Shell and Keppel plan to invest $40 million in expansions to supply 3,600-5,000 b/d of LPG. Shell holds a 45% interest, Suzhou Industrial Park Administration 35%, and Keppel 20%.

Exploration

Trinidad and Tobago awarded Conoco Inc. exploration and production-sharing contracts for offshore Blocks 4a and 4b east of Trinidad. The blocks cover about 300,000 acres combined and lie in water 200-2,500 ft deep. Conoco will conduct 3D seismic work starting this month and must later drill at least two exploratory wells. It expects to spend more than $50 million evaluating the blocks.

Gabon's government signed an exploration and production-sharing contract with Ocelot Energy Inc., Calgary, for Maghena Permit Area G4-182. The permit covers 1,064 sq km between the Panthere Nze and M'Bindji permits previously awarded to Ocelot (OGJ, Dec. 16, 1996, p. 26). Ocelot is conducting 3D seismic over one of five previously discovered oil pools on the two older permits. Workover of 1 Nyob discovery well on Panthere Nze permit is slated to begin in September. The well flowed more than 1,400 b/d of oil on test in 1988.

Ghana's government signed a production-sharing contract with Santa Fe Energy Resources Inc., Houston, for exploration on Keta Block in the Volta River delta, about 100 km east of Accra. The 2.5 million acre block is about 80% offshore. State-owned Ghana National Petroleum Co. has a 10% carried interest and the option to acquire 15% if a commercial discovery is made. Santa Fe must spend at least $10 million on a 3-year work program involving seismic data reprocessing and acquisition and drilling at least one well.

Triton Energy Ltd., Dallas, discovered Bumi East gas field, its sixth on Block A-18 in the Gulf of Thailand's Malaysia-Thailand Joint Development Area (OGJ, May 19, 1997, p. 34). Drilled in 188 ft of water to 9,100 ft TD 10 miles northeast of 1 Bumi, the 1 Bumi East flowed at a stabilized maximum combined rate of 34 MMcfd of gas and 1,681 b/d of condensate from three intervals at 7,664-8,874 ft through 24/64-64/64-in. chokes with flowing tubing pressures of 359-1,632 psi. Triton will drill three more exploratory wells this year on the block, including 1 Bumi North about 9 miles north-northeast of 1 Bumi and a wildcat to probe the Samudra prospect.

Marathon Oil U.K. Ltd. found oil on U.K. North Sea Block 16/6b with a well drilled to 7,150 ft total measured depth that cut 107 ft of net oil pay in Tertiary sands. The well was drilled about 10 km northwest of Marathon's West Brae field but suspended without testing. Marathon plans to appraise the find later this year or in 1998.

Norway's Den norske stats oljeselskap AS (Statoil) reported the start of a seismic survey of the Fylla area in the Davis Strait off western Greenland by Nunaoil, a company owned by the government of Denmark and the Greenland assembly (OGJ, Apr. 15, 1996, p. 81). The survey ship will collect 2,000 line km of 2D seismic data, due for completion around the end of July. The Fylla license is operated by Statoil, with partners Phillips Petroleum Co., Nunaoil, and Denmark's state firm Dopas as partners. A large gas prospect has been indicated in the Fylla license area.

BG Exploration & Production Ltd. tested 1 Je80 gas discovery on North Sinai concession in the Mediterranean Sea off Egypt in the easternmost extension of the new natural gas play in the Nile Delta. The well flowed more than 25 MMcfd of high-quality gas with less than 0.5% impurities from a small portion of the pay section. Amoco Corp. and Agip SpA made a string of gas discoveries nearby (OGJ, Feb. 24, 1997, p. 37).

Petrochemicals

Epsilon Products Co., Marcus Hook, Pa., let contract to Bechtel Corp., Houston, to design and build an 800 million lb/year polypropylene plant at Garyville, La. The plant will use Union Carbide's Unipol process and is slated for completion in 1999. Epsilon formed an alliance with Marathon Oil Co., Houston, to supply feedstock for the plant.

Geothermal

Amoseas Indonesia Inc., a joint venture of Texaco Inc. and Chevron Corp., produced the third highest dry steam rate on record from geothermal well DRJ-16 in western Java. Drilled to 5,988 ft TD, the well tested at a sustained rate of 55 kg/sec of dry steam at 13.5 bar wellhead pressure, enough steam to power a 20-MW generator, or nearly one-third of the total 70-MW requirement of a power plant now being built at Darajat. This helps confirm the Darajat contract area's potential to provide geothermal power for Indonesia.

Drilling-production

Imperial Oil Ltd., Toronto, sold Leduc oil field, the foundation of the modern Canadian industry, to Probe Exploration Inc., Calgary, for more than $45 million (Canadian). The Leduc No. 1 well, which tapped a reef structure near Edmonton, was drilled in 1947 after 133 consecutive dry holes. It began an exploration boom in Alberta. Probe plans to use new technology, including horizontal drilling and 3D seismic, to test the remaining potential.

A unit of Bitech Petroleum Corp., Ontario, signed a protocol with Archangelgeoldob, a joint stock company, for exclusive rights to evaluate the Peschano-Ozer field on Kolguev Island in Russia's Nenets autonomous district. Subject to evaluation under the limited period agreement, Bitech will negotiate for further development of the field as an equity participant. The field is located in the northern Timan-Pechora producing province.

Parker Drilling Co., Tulsa, capped a natural gas well being drilled for Denbury Resources Inc., Dallas, that blew out June 16 in a southern Louisiana bayou, killing four workers, and extinguished a fire in the surrounding area (OGJ, June 23, 1997, p. 28). After pressure was released and the well casing crimped, mud was forced into the well to kill it. The cause of the blowout is still under investigation.

Occidental Petroleum Corp. is preparing to drill a relief well to seal the 1 Moulavi Bazar wildcat that blew out June 15 in Mugrachhara gas field in the Sylhet region of northeastern Bangladesh (OGJ, June 23, 1997, p. 28). Flames were still burning near the blowout but were "considerably diminished" at about 2 ft high, Oxy said. The company restored rail tracks damaged by the fire and was still assessing damage to a tea plantation and surrounding forest.

Shell U.K. Exploration & Production began production from U.K. North Sea Block 21/30 Gannet F field, which has estimated reserves of 19 million bbl of oil and is expected to produce as much as 12,000 b/d of oil. It was developed in conjunction with Gannet E structure, due to come on stream in August, as a subsea satellite tie-back to Gannet A platform 11 km away (OGJ, Aug. 26, 1996, p. 28). Shell Expro expects to develop the fields for $128 million, $16 million less than the original budget.

Amerada Hess AS let a $270 million contract to Brown & Root Ltd., London, to design, build, and install a production platform in South Arne field off Denmark. The platform will have a concrete storage base, with 550,000 bbl oil capacity, and a topsides able to produce as much as 50,000 b/d of oil and 70 MMcfd of gas. South Arne is due on stream on July 1, 1999, and has estimated reserves of 60 million bbl of oil and 80 bcf of gas. Output will be sold to state firm Dansk Olie & Naturgas AS.

Azerbaijan International Operating Co., a group led by BP Exploration Operating Co. Ltd., let contract to BJ Service Co. (U.K.) Ltd. for nitrogen and helium leak testing of process pipework and nitrogen dewatering and inerting of the export pipeline on Chirag-1 platform. The platform will be used to produce first oil from a three-field development in the Caspian Sea (OGJ, Jan. 30, 1995, p. 31). Engineering work has begun, and testing will occur this summer.

Norsk Hydro AS let two contracts for subsea equipment for Troll C platform, due to begin producing oil from the giant Norwegian field's central gas province in September 1999 (OGJ, Jan. 27, 1997, p. 34). One $14.2 million contract calls for Rockwater AS/Saipem SpA joint venture to transport and install 14 templates and five riser bases during 3 years beginning in 1998. Also, Hydro let a $15.2 million contract to DSND Subsea AS of Grimstad, Norway, to build and install 16 anchors and to tow out and moor the semisubmersible platform. Work will take place in 1999.

Coalbed methane

Texaco Inc. won a license to explore for coalbed methane on a 100 sq mile concession in southern Poland's Upper Silesian coal basin. The company intends to begin appraisal drilling immediately and follow this up with extended production testing. Earlier plans by Amoco Poland Ltd. to explore for coalbed methane in the same basin fell through. Amoco withdrew, citing lack of progress in talks with the government over taxes and gas prices (OGJ, July 5, 1993, p. 26).

Marketing

Norway's Statoil agreed to sell its 48 gasoline stations in Germany to Deutsche Shell AG. Statoil said its limited network is too small to be efficient in a competitive market but fits well with Shell's long-term strategy in this market. This marks a turnabout in Statoil's position, which was looking recently to expand in the former East Germany (OGJ, June 23, 1997, p. 35). Statoil will retain its liquefied petroleum gas, aviation fuel, and natural gas businesses in Germany.

Gas marketing

NGC Corp., Houston, and NOVA Corp. closed the restructuring of the companies' jointly owned Canadian natural gas and gas liquids operations. The agreement allows NGC to pursue its midstream gas business independently in Canada and replicate the "energy store" concept it uses in the U.S. NGC now has full control of the gas marketing business of Novagas Clearinghouse Ltd. (NCL), Calgary, with the exception of Pan-Alberta Gas Ltd. Prior to realigning, NGC held 49.9% of NCL and NOVA held 50.1%. NOVA still owns 26% of NGC.

Companies

U.S. Federal EnergyRegulatory Commission conditionally approved the merger of Pacific Enterprises and Enova Corp., which owns San Diego Gas & Electric Co. (OGJ, Mar. 24, 1997, p. 36). FERC will require measures for Pacific Enterprise's Southern California Gas Co. unit to mitigate its control over interstate gas transportation capacity that feeds about 96% of the gas-fired electric power generation in southern California.

FERC approved NGC Corp.'s $1.27 billion acquisition of Destec Energy Inc., and at presstime the deal was expected to close soon (OGJ, Apr. 21,1997, p. 19). Destec is a large independent power producer with interests in 24 projects having combined rated capacity of about 5,136 MW of electricity and more than 3 million lb/hr of steam.

Tarragon Oil Gas Ltd., Calgary, will buy NuGas Ltd., Calgary, in an $85.9 million (Canadian) deal. Tarragon will assume $18.4 million in debt and finance the deal through an existing credit line and sale of as much as $50 million worth of non-core assets.

Institute of Petroleum, London, published a set of standard contracts intended to cut inefficiency and repetition in agreements between operators and contractors. The documents arose from U.K. oil industry's Cost Reduction Initiative for the New Era (Crine) campaign to reduce offshore sector costs. Model contracts are for construction, design, marine construction, mobile drilling rigs, offshore services, onshore services, purchase order terms and conditions, supply of major items for plant and equipment, and well services.

Terminals

Mobil North Sea Ltd. let a $40 million contract to AMEC Process & Energy Ltd., London, to build a compression plant at U.K.'s Bacton gas terminal, operated by Phillips Petroleum Co. U.K. Ltd. The plant will handle gas from Mobil's Lancelot area fields, centered on southern North Sea Block 48/17. The plant is due for completion in August 1998, ready for first gas on Oct. 1.

LNG

U.S. Transportation Department's Research and Special Programs Administration granted two firms an exemption from rules requiring an impounding system when an LNG tank is within 20,000 ft of an airport serving large planes. Northern Eclipse had asked for a waiver for a proposed LNG tank at Fairbanks, Alas., and Pine Needle LNG Co. sought one for a planned LNG tank in northwest Guilford County, N.C.