Industry briefs

Safety

U.K. offshore companies launched an initiative to improve by 50% the safety performance of U.K. operations during the next 3 years. The move involves members of the U.K. Offshore Operators Association, International Association of Drilling Contractors, and Offshore Contractors Association. Greg Bourne, Okooa task group leader and director of BP Scotland, said significant improvements have been achieved in recent years, but the goal is to eliminate incidents that lead to injury or death.

Exploration

Amoco Corp. found another world-class gas field off eastern Trinidad. The Sparrow-1 and Sparrow-2 wells were drilled 40 miles southeast of Galeota Point in 215 ft of water to depths of, respectively, 10,430 ft and 9,108 ft. The wells cut more than 1,000 ft of gross pay in 11 pay sands. Amoco pegs total gas in place at more than 2 tcf. The wells are Amoco's eighth and ninth commercial finds off Trinidad since 1995 (OGJ, Feb. 3, 1997, p. 37).

Triton Energy Ltd.,
Dallas, discovered a seventh gas field on Block A-18 in the Malaysia-Thailand joint development area. Samudra is the third field discovered on the block this year (OGJ, July 7, 1997, p. 32; May 5, 1997, p. 52). The Samudra-1 well flowed on test 49 MMcfd of gas and 858 b/d of 43-52° condensate and cut 560 ft of net gas and oil pay. Triton tested the well from five intervals at 6,515-11,168 ft through 3/4-7/8-in. chokes with 1,076-1,851 psi flowing tubing pressures.

Swift Energy Co.,
Houston, reported what it claims is the first successful horizontal Austin chalk well drilled in Trinity County, Tex. The well was drilled vertically to 9,800 ft, then 4,000 ft horizontally in the chalk. Great Western CMT No. 1-H flowed as much as 3.6 MMcfd of gas and 486 b/d of 53° gravity condensate through a 30/64-in. choke with flowing tubing pressure of 1,300 psig. The new field discovery establishes Austin chalk production 45 miles from production in Grimes County. Swift owns a 27.5% interest in the well.

Eurogas Corp.,
Calgary, spudded the 15,000-ft Nefta-1 exploratory well in south-central Tunisia's Sud Nefta permit area, reported 8% interest owner GHP Exploration Corp., Houston. Main objectives on the prospect, a 44,000-acre structural closure, are in the lower Triassic, lower Ordovician, and Cambrian. The Triassic target is considered oil-prone.

Environment

California's legislature approved a bill to continue the state's clean fuels program while University of California scientists study the health benefits and potential risks of various oxygenates such as ethyl tertiary butyl ether, ethanol, and methyl tertiary butyl ether. Gov. Pete Wilson is expected to sign the measure.

CNG

The U.S. Energy Department and the Gas Research Institute are cofunding the development of a low-cost, low-weight compressed natural gas cylinder for use in autos. They said as much as 70% of the cost premium of current natural gas vehicles can be attributed to on-board storage costs.

Gas gathering

Interstate Oil and Gas Compact Commission says Oklahoma Corporation Commissioner Denise Bode and Texas Railroad Commissioner Barry Williamson will co-chair a gas gathering subcommittee that will help states identify gas gathering issues and develop options for laws and agency rules.

Drilling-production

Diamond Offshore Drilling Inc., Houston, signed an 18-month contract extension with an Exxon Co. International affiliate for a fourth-generation semisubmersible, Ocean Valiant. The semi will be used in deep water off West Africa. The extension will start Jan. 1, 1998, and is expected to generate revenues of about $103.5 million.

Energy Development Corp.
(EDC), Houston, will start development of Amistad gas field in Ecuador's Gulf of Guayaquil with a $104 million investment. EDC just completed a 3D seismic survey of the area. Plans call for production of 60 MMcfd of gas to be used for power generation. A production platform, nine development wells, and an 82-km subsea gas line are planned.

Woodside Petroleum Group Pty. Ltd.,
Perth, let the two remaining major subcontracts for development of Laminaria and Corallina oil fields in the Timor Sea off Australia. Coflexip Stena Offshore Asia-Pacific won a $60 million (Australian) contract to supply 20 km of flexible flow lines and 3,000 m of risers. United Construction Group Ltd., Perth, won a $45 million contract to build processing modules for a floating production, storage, and offloading (FPSO) unit to be installed in the fields. The FPSO will be 273 m long and have a displacement of 220,000 dwt. Production is scheduled to start early in 1999 at 140,000 b/d and rise to 170,000 b/d.

Enterprise Oil plc,
London, issued a letter of intent to Aker Maritime AS, Oslo, for the lease of production modules to be used in development of Pierce field off the U.K. The plant will have capacity to produce 45,000 b/d of oil and will be mounted on Berge Hugin multipurpose tankers (OGJ, Sept. 15, 1997, p. 34). The contract is valued at $100 million, covering an initial 5-year period from first oil in August 1998.

Esso Production Malaysia Inc.,
Kuala Lumpur, ordered two multiphase meters from Fluenta AS, Bergen, for the unmanned Seligi F and Tapis E platforms. This will be Esso parent Exxon Corp.'s first use of multiphase meters. The meters will be used for well testing, reservoir control, and production monitoring.

The Venezuelan group
that won operating rights for Petroleos de Venezuela SA's Mata block failed to sign the final contract (OGJ, Sept. 1, 1997, p. 42). Pdvsa subsidiary Corpoven SA said the combine of Productos Industriales Venezolanos SA and SA Consultores CSC was unable to sign the contract due to factors "beyond our will and control." This is the second time the Mata tender has fallen through (OGJ, Aug. 4, 1997, Newsletter).

Companies

Rio Alto Exploration Ltd., Calgary, agreed to acquire the Canadian exploration and production subsidiary of Seagull Energy Corp., Houston. Rio Alto will purchase the stock of Seagull Energy Canada Ltd., for which Seagull expects to receive at least $182 million. The transaction is slated to close in the fourth quarter. Seagull will apply the proceeds to its long-term debt.

Norway's Statoil
let a 180 million kroner ($25 million) contract to Aker Maritime AS, Oslo, for work on the Statfjord C platform in the Norwegian North Sea. Aker will upgrade the platform's water injection system to help boost production in Statfjord North satellite field. A new turbine-driven pump will be installed. Project completion is slated for January 2000. Statoil is considering extending the contract to include modifications to process equipment and utilities so that two more satellites can be tied back.

Petrochemicals

Formosa Group let a $98 million contract to Samsung Corp. to build a naphtha-based petrochemical plant in northern Taiwan. Work on the 900,000 metric ton/year ethylene plant will start in November, with completion scheduled for February 2000. Formosa also is building a 700,000 ton/year unit at Mailiao, due to start up next year (OGJ, Sept. 15, 1997, p. 34). A 450,000 ton/year plant, also being built by Samsung for Formosa, is 60% complete.

Saudi Methanol Co.,
a unit of Saudi Basic Industries Corp., secured a $175 million loan from Export-Import Bank of Japan. The money will help fund construction of the company's fourth chemical-grade methanol plant at Al-Jubail. The plant will have a capacity of 850,000 metric tons/year. Another 850,000 ton/year unit, the kingdom's third, is due on stream this year.

Two Chinese petrochemical producers
achieved milestones. Guangzhou Petrochemical Co. started trial operations at its new 150,000 metric ton/year ethylene unit at Guangzhou, China. The plant will feature an advanced distributed control system. Annual sales of more than 3 billion yuan are projected. Tianjin Petrochemical Co. started construction on a polyester plant at Tianjin, China. The 20,000 ton/year unit will be built for 9.13 billion yuan. Start-up is scheduled for October 2000.

LNG

India's Essar Oil Ltd. and Shell International combined to bid for the 2.5 million metric ton/year Hazira liquefied natural gas terminal project at Surat, Gujarat, India (OGJ, Sept. 8, 1997, p. 37). Amoco Corp. exited the project after Gujarat withdrew dredging funds. The terminal will include regasification and storage facilities; capacity will double in 5 years. If the companies win the project, Shell's share will be 80% and its investment $2 billion. The LNG will be used to hike Hazira power plant capacity to 2,515 MW from 2,000 MW.

Total SA
and India's Tata Electric Cos. will jointly develop an LNG terminal near Bombay to supply power generation markets in Maharashtra and Gujarat states. The partners will perform a feasibility study to determine the best site and form a joint venture to build and operate the facility. Total will supply LNG from its ventures in the Middle East and from Indonesia's Bontang complex if needed. Total signed a similar agreement last year for an LNG terminal in southern India (OGJ, June 10, 1996, Newsletter).

Refining

An explosion at the Hindustan Petroleum Corp. Ltd. refinery at Visakhapatam, India, killed as many as 45 people; about 20 more were critically injured. A leak in an LPG pipeline caused the explosion, which ignited six storage tanks. The fire then swept through the 90,000 b/d refinery, destroying six buildings and numerous tanks. Local official expect the death toll to rise, and said more than 100,000 people fled the area.

Star Enterprise
let a $250-million contract to Parsons Corp., Pasadena, Calif., for design, procurement, and construction of a gasification unit at Star Enterprise's 140,000 b/d Delaware City, Del., refinery. The unit will use integrated gasification/combined-cycle technology to generate steam and electricity from petroleum coke. The gasifier, licensed by Texaco Inc., will produce clean synthesis gas, which will fuel gas turbines.

Assets of the idle
84,000 b/d Indian Refining Co. refinery at Lawrenceville, Ill., were auctioned for about $2 million, less than 10% of the refinery's replacement value. Owner American Western Refining LP acquired the refinery from Indian in 1995, since which time it has remained idle. American Western, which filed for bankruptcy protection last November, could find no buyer for the entire refinery.

U.K. Health and Safety Executive
blames management system failure for a 1994 explosion at Pembroke Cracking Co.'s refinery at Milford Haven, Wales. Lightning struck the refinery-owned by Texaco Ltd. and Gulf Oil (GB) Ltd.-causing a fire that forced shutdown of all units except the fluid catalytic cracker. HSE said a combination of management, equipment, and control system failures led to the release of 20 metric tons of hydrocarbons from the cracker flare's knockout drum.

Pipelines

An explosion in an underground gas line in Kaohsiung's densely populated Chienchen District killed four and injured at least 24-eight of them critically. The explosion and resulting fire, which destroyed at least 15 homes and 90 vehicles, is the latest in a series of serious accidents at facilities owned by Chinese Petroleum Corp. (OGJ, Sept. 2, 1996, p. 41). According to local news reports, accidents at CPC facilities have resulted in more than 50 deaths in the last 2 years, 42 of which occurred in 1996.

BHP Petroleum Pty. Ltd.
and Westcoast Energy Inc., Vancouver, B.C., agreed to pay aboriginal groups $2.7 million (Australian) for rights to lay a 740-km pipeline through aboriginal-title land (OGJ, Sept. 8, 1997, p. 40). The agreement includes jobs, training, and a promise to respect culturally significant sites. It is the first native title agreement to cross two Australian states and is viewed as a landmark because of the project size and cross-border cooperation involved.

Two energy companies
acquired 11% stakes in the proposed 1,900-mile Alliance pipeline project. The line will bring Canadian gas to the Chicago area (OGJ, Aug. 25, 1997, p. 29). Coastal Corp., Houston, and Westcoast Energy will each invest about $130 million. Westcoast retains through the end of September the option to reduce its investment to 6%. Westcoast has committed to 80 MMcfd of firm gas transportation capacity in the project and may increase its commitment to as much as 145 MMcfd.

Power

PT East Java Power Corp. (EJPC) signed a 20-year supply agreement with Pertamina for 30 bcf/year of gas to fuel a 500-MW power plant under development at Pasuruan, Indonesia. The plant will start up early in 2000. The gas will be produced from Madura BD field under a production-sharing contract between Pertamina and partners Mobil Madura Strait Inc. (operator) and Husky Oil (Madura) Ltd. Delivery will be made through a planned 60-km subsea line from Madura BD to a processing plant on Kambing Island, then on to the power plant. Enron Corp. is a 50.1% owner of EJPC; partners are Pasuruan Power Co. and Prince Holdings Ltd.

Labor

The Oil, Chemical, & Atomic Workers International Union is considering merging with the larger United Paperworkers International Union. OCAW official Rodney Rogers said UPIU suggested the merger. Similar merger attempts failed in 1981 and 1985. In the latter instance, an OCAW majority voted for the union, but UPIU rejected it.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.