INDUSTRY BRIEFS
Refining
Unocal Corp.and units of Petroleos de Venezuela SA (Pdvsa) signed a letter of intent to restructure the Uno-Ven joint venture that operates the 153,000 b/d, Lemont, Ill., refinery. Restructuring involves transferring all of Uno-Ven's refining and marketing assets to Pdvsa units. Unocal will receive $250 million, and Pdvsa units will assume all Uno-Ven debt. Transaction, slated to close in the first quarter, will complete Unocal's withdrawal from refining/marketing. Move follows Unocal's planned sale of other downstream assets to Tosco Corp., Stamford, Conn., also expected to close in the first quarter (OGJ, Nov. 25, 1996, p. 32).
LPG
Algeria'sSonatrach is constructing two liquefied petroleum gas (LPG) separation trains at its Arzew GP1Z complex in Northwest Algeria to expand capacity to 2.4 million metric tons/year. Added to the output from the existing GP1Z and GP2Z plants, Algeria's total LPG production capacity will increase to 8.4 million tons/year from 4.4 million tons/year in 1995.
Exploration
TransTexas Gas Corp.,Houston, disclosed its 1 Foote Estate discovery in Wayne County, Miss., flowed on test from Norphlet pay at a rate of 12.4 MMcfd of natural gas and 440 b/d of condensate through a 23/64-in. choke with 4,900 psi flowing tubing pressure. Drilled to 15,262 ft TD, well also tapped Cotton Valley pay, where a 60 ft interval flowed on test at a rate of about 1 MMcfd of gas before fracturing.
Santos Ltd.,Adelaide, disclosed its 1 ST Swan Lake discovery in South Australia's Cooper/Eromanga basin flowed 8.2 MMcfd of gas through a 1/2-in. choke from early Permian Toolachee sands at 8,176-8,503 ft. Well, designed to test low deliverability zones using air drilling technology, was the first of a four-well program in the area.
Williams Production-Gulf Coast Co. LP,a unit of Williams Cos. Inc., Tulsa, paid $20.5 million to Kelley Oil & Gas Corp., Houston, for a 50% interest in Kelley's 27,000 net acre position in the Houma embayment in Terrebonne Parish, La., and committed to drill as many as eight exploration prospects. Using a two-rig continuous program, the companies will explore jointly for natural gas, starting with the 8 Wylie, in 84-17s-16e. Companies will use a co-license of Kelley's reprocessed 125 sq-mile 3D seismic database to explore the area.
Anadarko Petroleum Corp.,Houston, and partner ARCO Alaska Inc. were high bidders on 10 of 13 total tracts in Alaska state lease Sale 85-A, spending $832,596 for tracts covering 38,763 acres on the west side of Cook Inlet and the Kenai Peninsula. Companies earlier formed a 2-year strategic alliance to explore in Alaska's Cook Inlet (OGJ, Oct. 14, 1996, p. 91). Anadarko will serve as operator as the companies evaluate existing and new seismic data.
CanBaikal Resources Inc., Calgary, signed an exploration and production agreement involving work in Russia's Khanty-Mansiysk province. The 154-sq mile property in western Siberia has four identified pools with estimated proved and probable reserves of 170 million bbl. CanBaikal will receive title to the reserves. It plans to begin production from two wells this winter and will conduct exploration and seismic surveys.
Stone Energy Corp.,Lafayette, La., plans two delineation wells in first half 1997 after completing 24 OCS-G-1238 new pool discovery in about 60 ft of water in South Pelto Block 23 field off Louisiana. Well flowed on test at an average rate of 16.2 MMcfd of gas and 700 b/d of oil through a 17/64-in. choke with 9,530 psi flowing tubing pressure from perforations at 17,830-850 ft, confirming a productive structure in a previously untested area. Design of D platform and equipment is in progress. First production from the new area is set for fourth quarter 1997. Stone owns a 98% working interest in the block.
American Exploration Co.,Houston, will spend about $7.3 million to acquire land and conduct a 3D seismic survey as part of an exploration joint venture with Tom Brown Inc., Midland, Tex., involving 50,000 gross acres of Tom Brown's Lost Prairie and Lake Tyler prospects in Anderson, Cherokee, and Smith counties of East Texas in the Cotton Valley Pinnacle Reef trend. American will receive a 40% working interest. Tom Brown, which will own the remaining interest and operate, is shooting a 76-sq mile 3D survey in the Lost Prairie area. Drilling is set for first half 1997.
Marketing
Japan's Idemitsu Kosan KK plans to open convenience stores at its service stations nationwide in a partnership with Yamazaki Baking Co. Move comes weeks after rival Nippon Oil Co. teamed with fast-food chain McDonald's in a comparable venture (OGJ, Dec. 9, 1996, p. 36). Both companies face stiff price competition from continuing deregulation of Japan's downstream sector (OGJ, Aug. 26, 1996, p. 31). Idemitsu has already opened two 24-hr pilot outlets at stations in Tokyo and Shizuoka Prefecture. It plans to open 30 stores by the end of fiscal 1997.
Pipelines
World Bankwill provide $44 million to Zambia for rehabilitation of the 1,710-km Tazama oil pipeline from Dar es Salaam, Tanzania, to Ndola, Zambia. Project includes building a 345,000 bbl capacity bulk storage tank on the Zambia side of the line that can keep the Ideni refinery running for 30 days. At present, all pipeline storage facilities are at Dar es Salaam.
Gas processing
Westcoast Gas Services Inc., a unit of Westcoast Energy Inc., Calgary, plans to increase capacity the next few months to 140 MMcfd from 70 MMcfd at its recently completed gas processing plant 140 km north of Fort St. John, B.C. Plant expansion is slated for completion in May 1997, subject to government approval. Westcoast also has filed for government approval to build a 110 MMcfd gas processing plant at Highway, B.C.
NGL
TransTexas Gas Corp.,Houston, will construct a $42 million, 750 MMcfd inlet capacity natural gas liquids processing plant in the Agua Dulce area of Nueces County, Tex., to meet increasing area NGL demand. Plant, to be served by the company's 20-in. and 30-in. pipeline systems, will produce about 40,000 b/d of NGL. It will be located where 15 major interstate and intrastate natural gas pipelines converge with eight NGL pipelines.
Drilling-production
Kuwaitcompleted rehabilitation of 160 damaged oil wells in Al Wafra field, with imminent production planned at a combined rate of 35,000 b/d of heavy crude. Rehabilitation program began in 1991 following the Persian Gulf War, with priority given to wells that produce medium gravity crude. Kuwait is currently producing 2 million b/d of medium gravity crude. It has 4-7 billion bbl of heavy crude reserves. Kuwait has more than 800 oil wells in its territory and shares 300 wells in the Neutral Zone with Saudi Arabia.
Azerbaijan International Operating Co. (AIOC)successfully completed 1 Chirag, first of three planned Chirag field appraisal wells off Azerbaijan in the Caspian Sea (OGJ, Dec. 23, 1996, p. 32). Tests of 1 Chirag, drilled to 9,704 ft, yielded a maximum flow rate of about 6,000 b/d. Production from the field is to begin late in 1997. The field could contain 4 billion bbl of oil, AIOC said.
Abacan Resources Ltd., Calgary, began production from its offshore Ngo field in the Niger Delta from two wells at a rate of about 15,000 b/d. Company expects five wells to be on production in January and total output to reach 40,000-50,000 b/d this year. Ngo field has reserves of about 175 million bbl. Company plans to drill four new wells in the field to tie into a second production platform. Abacan also holds rights to about 1.5 million acres in the Benin basin, where it made one oil discovery that tested at 5,500 b/d and is drilling a step-out.
Ranger Oil Ltd.,Calgary, increased its interest in Anglia gas field on Blocks 48/18b and 48/19b in the U.K. North Sea to 67.2% with purchase of a 29.3% interest from Amerada Hess Ltd. Ranger also agreed to sell Amerada a 17% interest in Block 29/8b and a 10% interest in Block 29/9b, leaving Ranger with respective interests in those blocks of 16% and 36%.
Shell Deepwater Development Inc.,a Shell Oil Co. unit, signed a letter of intent with Noble Drilling (U.S.) Inc., a unit of Noble Drilling Corp., Houston, for an Economic Value Advantage (EVA)-4000 semisubmersible drilling rig (OGJ, Nov. 25, 1996, p. 24). Unit will be the first conversion of a submersible in Noble's fleet to an EVA-4000 design semi. It will be capable of drilling in 6,000 ft of water. Initial contract term is 4 years, with a 1-year extension option at predetermined day rates.
Plains Resources,Houston, completed 30-5 Turner Corp., its first short-radius horizontal well, drilled to a vertical depth of 11,455 ft in West Felda field in Hendry County, Fla. Well was put on production in November and has averaged more than 1,000 b/d of oil on pump. Its lateral extension totaled about 790 ft within lower Cretaceous Sunniland limestone. Plans call for as many as four more short-radius wells in South Florida in 1997. Plains holds a 100% working interest in the well.
Chateau Oil & Gas Inc.,Dallas, completed acquisition of Fort Worth-based Snyder Oil Corp.'s interests in the San Juan basin, including 220 operated wells and 45 non-operated wells and Snyder's district office at Farmington, N.M. Chateau is preparing to close on additional interests in the properties as part of a planned San Juan basin expansion.
Petrochemicals
China's Daqing Lianyi Petrochemical (DLP) plans a $130 million (U.S.) fertilizer plant at Medicine Hat, Alta. Plant capacity is planned at 860,000 metric tons/year of urea and ammonia.
LNG
Malaysia LNG Tiga Sdn. Bhd.let contract to Fluor Daniel Ltd., Camberley, U.K., and Mitsubishi Heavy Industries Ltd., Tokyo, for project specification work on Malaysia's third liquefied natural gas project. Work is slated for completion by September. Fluor Daniel said the operator plans to produce 6.8 million tons/year of LNG from the plant.
Gas storage
CNG Transmission Corp.,Clarksburg, W.Va., a unit of Consolidated Natural Gas Co., Pittsburgh, is designing its Market Area Storage (MAS) complex after completing an open season late in November. As designed, MAS will provide an average 50-60 days of firm storage beginning in the 1999-2000 winter season. No site has been selected yet. Customer precedent agreements will be negotiated in coming weeks, and a project application will be filed early in 1997.
Courts
U.S. Supreme Courtwill hear oral arguments and rule in 1997 on a 17-year dispute between the federal government and Alaska over ownership of coastal submerged lands on the North Slope. Case will determine whether the federal or state government gets more than $1.4 billion in oil and gas revenues from disputed lands along the coast's slope.
Companies
Encal Energy Ltd., Calgary, paid Morrison Petroleum Ltd., Calgary, $45.5 million (Canadian) for oil and gas lands and related assets near Fort St. John, B.C. Encal will gain production of 8.5 MMcfd of natural gas and 930 b/d of oil. Deal includes gas processing and compressor complexes, more than 80,000 acres of undeveloped land, and seismic data.
Exxon Corp.unit Esso Eastern Inc. and Eastern Investment Co. (EIC), a Vietnamese government company, signed an agreement to form a joint venture to distribute petroleum products in Viet Nam. Exxon's unit will hold 70% in the venture, while EIC will hold the other 30%. Partners plan new plants for lube oil blending, LPG bottling, and bulk asphalt.
Mobil Corp.unit Mobil Exploration & Producing Australia (MEPA) has now secured all but 0.25% of the shares in Ampolex Ltd., Sydney (OGJ, June 3, 1996, p. 27). Ampolex and MEPA will consolidate offices at Perth early in 1997. Move will include Ampolex's Sydney headquarters, as well as MEPA's Melbourne office.
Pogo Producing Co.,Houston, unit Thaipo Ltd. will purchase a share of Maersk Oil (Thailand) Ltd.'s interest in Block B8/32 in the Gulf of Thailand. Acquisition brings Pogo's interest to 46.34% in all concession areas outside Tantawan field (OGJ, Dec. 2, 1996, p. 38).
Tankers
Tanker safetyin Alaska's Prince William Sound is expected to improve after new-design tugs begin operating there this year. Recommended in a joint study by the U.S. Coast Guard, Alaska Department of Environmental Conservation, and oil and shipping companies, the plan involves use of a new, high-powered tug stationed at the sound's entrance and experiments with sophisticated new tractor tugs designed for better maneuverability. The study also found that safety rules adopted since 1989's Exxon Valdez spill have cut collision and grounding risks by about 75%.
Spills
U.S. Environmental
Protection AgencyRegion 5 will present a series of 12 free workshops on oil spill compliance regulations and preparation of spill prevention, control, and countermeasures plans during January-April. Two workshops will be held in each of the six states in Region 5. First meeting is scheduled Jan. 13 at EPA's Chicago regional office.
Copyright 1997 Oil & Gas Journal. All Rights Reserved.