INDUSTRY BRIEFS

Correction

Apache Corp., Houston, and partners gauged combined flow rates of 11,571 b/d from five zones with the D-2 well on China's Zhao Dong Block, not the D-3 appraisal well as reported incorrectly (OGJ, July, 21, 1997, p. 48). The D-3 well was not tested but encountered multiple productive reservoirs beyond those tested in the D-1 and D-2 wells.

LNG

India's LNG Corp. is expected to invite British Gas International (BGI) to sign a memorandum of understanding to become a 50-50 partner in a $600 million liquefied natural gas terminal and power plant at Mangalore, Karnataka. This will mark BGI's second major deal in India this year, following acquisition of Gujarat Gas Co.

Drilling-production

Occidental Bangladesh Ltd. postponed drilling of a relief well in Mugrachhara gas field in the Sylhet region of northeastern Bangladesh after a fire intensified that has burned for more than a month, following a blowout of the Moulavi Bazar wildcat June 15 (OGJ, June 23, 1997, p. 28: July 7, 1997, p. 33). The fire flared anew as a result of gas leaks and a strong new gas kick detected as work began on a drillpad. Additional wild well specialists have been called to the site from Singapore and Canada.

France's Total began production under an accelerated development plan-just 1 year after exploratory drilling began in Venezuela's Jusepin field-at a rate of 10,000 b/d of crude oil and about 24.7 MMcfd of gas. Oil output is expected to peak at 30,000 b/d by yearend when production facilities and a second well are completed. A second discovery at a neighboring structure last September is slated to come on stream early in 1998. Field operator Total, working with partner Amoco Corp., also has conducted successful waterflood tests of shallower pay in Jusepin field.

Louisiana Land & Exploration Co. plans to decide by August on a Lost Cabin gas plant expansion, spurred by its 4-36 Bighorn step-out in Madden field in Fremont County, Wyo. The well tapped 198 ft of pay and flowed 44 MMcfd of gas through a 1-in. choke with 4,964 psi flowing tubing pressure and surface shut-in pressure of 6,700 psi prior to testing. Drilled to 24,600 ft TD, the well is 1,000 ft downdip from the crest of a deep Madison structure where LL&E has two wells producing a combined 52 MMcfd. Test flow was constrained by equipment capacity, but the well has calculated absolute open flow potential of 240 MMcfd.

Mobil Producing Nigeria Unltd. let a $125 million contract to units of France's Bouygues Offshore SA to supply three platforms and lay six pipelines for Nigeria's Oso gas field, slated for delivery by yearend 1998. The installation, to be linked to nearby Usari field, will supply extra gas needed for reinjection in the Oso natural gas liquids recovery project in which Bouygues also participates. The scope of work includes one gas conditioning and two oil production platforms, three oil pipelines, two gas lines, and one gas injection line.

Forest Oil Corp., Denver, is drilling an offset well on Eugene Island Block 53 in the Gulf of Mexico off Louisiana to test structures similar to those tapped by its No. 10 exploratory well but across other fault blocks. The discovery well is flowing about 25 MMcfd of gas and 979 b/d of condensate at 3,390 psi flowing tubing pressure through a 35/64-in. choke from an interval at 13,087-282 ft. Sole interest holder Forest said the well could produce at a higher rate, but output is limited by liquids processing capacity.

Kuwait National Petroleum Corp. (KNPC) let a $130 million contract to South Korea's Daelim Engineering to build an oil gathering complex called Center 25 in northern Kuwait. The complex will collect and process 250,000 b/d of oil from the Raudhatain field, then pump it to export and storage units at Al Ahmadi. KNPC said the project is part of a plan to hike production capacity to 3.5 million b/d by 2005 from 2.4 million b/d today.

U.S. Minerals Management Service extended to Sept. 22 the comment period for ways to value natural gas for royalty purposes. MMS wants comments on using indices to value gas and on whether Norway's oil royalty valuation method could be adapted for gas.

Chevron U.K. Ltd. will boost fluids handling capacity of its U.K. North Sea Alba platform to 390,000 b/d from 240,000 b/d. This will involve installation of three new modules weighing a total of 1,700 metric tons. A water injection well will also be connected by a new 6-km pipeline to the platform. Chevron recently upgraded Alba topsides to hike oil production capacity to 100,000 b/d from 75,000 b/d. The increased water-handling capacity is intended to enable Chevron to maintain oil output levels as water production increases

Safety

U.K. Health & Safety Executive is prosecuting contractors AMEC Process & Energy Ltd., London, and BJ Process & Pipeline Services Ltd., Aberdeen, for alleged breaches of health and safety law. The case, to be heard Aug. 4, follows an investigation into a December 1995 blast that killed three workers and injured four others who were pressure testing equipment on a bridge module being built at AMEC's Howden yard on the River Tyne (OGJ, Jan. 1, 1996, p. 26).

Companies

British-Borneo Petroleum Syndicate plc, London, earmarked $267.7 million from a pending rights issue to purchase from Conoco Inc., Houston, a 50% interest in the Gulf of Mexico's King Kong gas discovery on Green Canyon Blocks 472, 473, and 517 in 3,800 ft of water. Shell Offshore Inc., which owns the other 50%, has an option to assume operatorship. British-Borneo said two wells in King Kong proved a relatively shallow gas field with estimated reserves of 250 bcf. The company anticipates initial output of 180 MMcfd of gas in 2000.

Centrica plc, the U.K. gas supply company created from the breakup of British Gas plc, agreed with Amerada Hess Ltd., Enterprise plc, and OMV (U.K.) Ltd. on termination of gas deliveries from U.K. North Sea Beryl field on Oct. 1, 1998. Centrica will compensate the three firms, but details were not disclosed. Beryl operator Mobil North Sea Ltd. agreed to end its contract earlier in return for assets interests (OGJ, Jan. 20, 1997, p. 26).

Oracle Corp., Redwood Shores, Calif., signed a letter of intent with a unit of British Petroleum Co. plc to acquire and distribute BP's ISP refining and distribution software, which controls transactions such as supply, distribution, sales, marketing, accounting, and taxation. The software can be scaled to different-size companies, supports multiple currencies, and is year-2000 compliant. BP will receive a royalty on license sales.

Spills

Emergency workers in southern Taiwan were working last week to clean up 10,000 gal of aviation fuel near a highway construction site that spilled when an excavation crew ruptured a pipeline. Spilled fuel formed a geyser more than 10 m high, witnesses reported. The fuel polluted the construction site and nearby rice paddies and forced closure of the highway for several hours.

Exploration

Apache Corp. completed two discoveries on its Khalda concession in Egypt's western desert that flowed on test at a combined rate of 9,205 b/d, establishing production from Kenz field. Kenz-5 and Kenz-6 each discovered new reservoirs and extended the boundaries of Kenz field, formerly Salam South field. Three more wells will be drilled and a 3D seismic program started in the field this year.

Red Sea Oil Corp., owned 50-50 by International Petroleum Corp., Vancouver, B.C., and Sands Petroleum AB, Stockholm, is readying to spud the B1 well on Block NC177 of Libya's Sirte basin and expects to begin drilling in the fourth quarter (OGJ, Jan. 13, 1997, p. 30). The well will be drilled on the En Naga North prospect, on trend structurally and geologically with En Naga oil field, operated by Germany's Veba Oel AG 15 km southeast. Veba is acquiring 3D seismic over En Naga field prior to appraisal and development.

Texas General Land Office received industry nominations for 7% more acreage for this coming October's state lease sale than for the sale this past April, which was the largest since 1984. Nominations were submitted for 1,444 tracts covering 757,500 acres in the Gulf of Mexico, 812 tracts totaling 282,340 acres in the bays along Texas' coast, and 39 upland tracts spanning 6,619 acres. The sale is slated for Oct. 7.

Equitable Resources Energy Co., Houston, found natural gas with South Marsh Island Block 39 No. 1 well. Drilled to 14,270 ft TD, the well tapped 170 ft of net pay from 8,530-10,070 ft. Operating problems prevented the use of electric logs below 10,070 ft, but hydrocarbon shows indicated deep potential. The well was suspended to evaluate further drilling around the salt dome later this year and to consider production options for the block.

Scimitar Hydrocarbons Ltd., Calgary, let a contract worth more than $3 million to PGS Ocean Bottom Seismic AS to conduct 300 sq km of 3D seismic in August off Ajman, where Scimitar has a 30% interest in an offshore concession (OGJ, Apr. 21, 1997, p. 21). The balance is held by Atlantis Technology Services Ajman AS.

Pipelines

Elf Exploration U.K. plc let a $320 million contract to McDermott-ETPM (U.K.) Ltd., London, for engineering, procurement, installation, and commissioning of a pipeline to export gas from the U.K. North Sea's Elgin/Franklin fields. The 470-km, 34-in. pipeline will take gas from Elf's fields and the Shearwater development of Shell U.K. Exploration & Production to Shell's Bacton terminal in southeast England. First production from the three fields is slated for mid-2000 (OGJ, Apr. 21, 1997, p. 29).

U.S. Transportation Department's Research and Special Programs Administration issued a rule excluding two types of hazardous liquid pipelines from its regulations. The exclusions are low-stress pipelines that the U.S. Coast Guard regulates for safety and low-stress lines less than 1 mile long that serve plants and terminals without crossing an offshore area or a waterway currently used for commercial navigation.

Refining

An explosion killed two workers at Ghana's Tema refinery, about 30 km from Accra. The blast occurred during a test run after revamp of a process unit. Cause has not been determined. The fire caused about $10 million in damage but is not expected to affect delivery of products due to sufficient stocks.

Transpacific Industries Pty. Ltd., Shell Australia Ltd., and Mobil Oil Australia Ltd. formed a joint venture for collecting, recycling, and re-refining used oil in Australia. The venture, called Nationwide Oil Pty. Ltd., is building a 24,000 gpd refinery at Sydney, based on the technology of Interline Resources Corp., Alpine, Utah. Start-up is scheduled by yearend. Interests are Transpacific 50% and Shell and Mobil 25% each

Egypt's Nasr Petroleum Co. let a $32 million contract to Kvaerner John Brown Ltd., London, to oversee construction of a new hydro- cracker at its Suez refinery. The project is expected to take 5 years. The plant has crude distillation capacity of 100,000 b/d.

Tankers

An explosion in an oil tanker off Batangas, Philippines, about 100 km south of Manila, killed at least three people and seriously injured scores of crew members, according to the Philippines Coast Guard. The cause of the blast had not been determined at presstime.

Petrochemicals

A joint venture of Chevron Chemical Co. 60% and Petroleum Authority of Thailand 40% chose Institut Fran?ais du P?trole's Eluxyl paraxylene process for a plant to be built next to the new Star Petroleum refinery at Mab Ta Phud, Thailand. The $1 billion plant, slated to come on stream in 2000, will produce 675,000 tons/year of paraxylene using Eluxyl and 600,000 tons/year of benzene using Chevron's Aromax process.

Malaysia's Petroliam Nasional Bhd. (Petronas), Japan's Sumitomo Corp., and a unit of British Petroleum Co. plc signed a joint venture to build a 250,000-metric ton/year capacity polyethylene plant in the Philippines' province of Bataan, west of Manila. Construction will begin later this year for targeted start-up in late 1999. Interests are BP Holdings International BV 30%, Petronas 20%, and Sumitomo 5%. The balance is held by Filipino group Bataan Polyethylene Holdings Corp.

Bayer Corp., Pittsburgh, will spend $68 million to add 75,000 metric tons/year of capacity at its Orange, Tex., synthetic rubber plant to diversify the types of polybutadiene (BR) and solution styrene-butadiene rubber (SBR) products it can manufacture. The expansion, slated for completion in early 1999, will convert an existing lithium BR (LiBR) unit to a flexible, multi-purpose unit for production of LiBR, solution SBR, and neodymium BR.

Methanex Chile Ltd. signed a letter of intent with Kvaerner John Brown for construction of a $300 million methanol plant near Punta Arenas, Chile, Methanex's third plant at the site. The new plant will be similar in design to a $275 million, 2,700-ton/day plant at the same site just completed by Kvaerner John Brown for Methanex but will use a seawater cooling system and have more storage capacity. Engineering of the new plant is under way, with completion slated for April 1999.

Dow Chemical Co. retired its 30-year-old, 700 million lb/year LHC-6 ethylene unit at Freeport, Tex., citing high maintenance cost as the reason. It was one of five Dow ethylene units on the U.S. Gulf Coast. The remaining four units have a total capacity of 5.3 billion lb/year. Dow will replace the lost capacity by expanding its other North American sites.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.