INDUSTRY BRIEFS

Power

U.K.'s Department of Trade and Industry approved plans by Powergen plc, London, to build and operate a 500-MW gas-fired power plant alongside an existing 1,920-MW coal-fired plant at Cottam, Nottinghamshire. The new unit will be operated initially as a development and test center. Powergen and partner Siemens plc, Bracknell, U.K., will work on a new 500-MW nominal capacity industrial gas turbine, designed for high thermal efficiency with low nitrogen oxides emissions.

Geothermal

Amoseas Indonesia Inc. let a $40 million contract to Stone & Webster Inc., Boston, to engineer, design, procure, and construct a geothermal plant at Darajat power station, which serves geothermal fields in Garut Regency, West Java. The project involves development of the station's 70-MW second and third units, which will provide power to the state electric utility PT Pln. The units are set for completion in 1998 and 2000.

Companies

Gulf Canada Resources Ltd., Calgary, said before presstime last week its final cash offer in the takeover bid for Clyde Petroleum plc, Ledbury, U.K., is now unconditional. Gulf owned shares or had acceptances totaling 51.4% of Clyde as of 1 p.m. London time Feb. 18. Gulf is offering 120 pence/share, valuing Clyde at $800 million. Gulf's offer will remain open for acceptance until further notice.

Lukarco BV, recently formed joint venture of ARCO and Lukoil, disclosed the JV will invest in the Caspian Pipeline Consortium's (CPC) 900-mile pipeline project from Tengiz field in Kazakhstan to the Black Sea via Russia. The JV plans to invest about $5 billion in oil and gas opportunities in Russia and elsewhere for 18 years (OGJ, Feb. 17, 1997, Newsletter). Lukarco JV will hold a 12.5% interest in CPC. Lukoil earlier increased its ownership position in the Tengizhchevroil JV (OGJ, Jan. 27, 1997, p. 38). Lukoil will own a 54% interest in the Lukarco JV and ARCO 46%. Also, the JV intends to acquire a 5% Tengiz field interest, subject to final negotiations with Chevron Corp.

Talisman Energy Inc., Calgary, plans to buy all outstanding common shares of Wascana Energy Inc., Regina, Sask., for $18.50/share (Canadian) cash or 0.41 Talisman common share for each Wascana share, subject to certain limits. Total consideration involves about $615 million and 20.45 million Talisman shares. Talisman expects the deal would increase its consolidated 1997 production by 30% to an equivalent of about 175,000 b/d of liquids and 826 MMcfd of gas.

Bellwether Exploration Co., Houston, plans to acquire for $209 million interests in properties from 24 Torch Energy Advisors Inc., Houston, partnerships and institutional programs. The deal has a July 1, 1996 effective date, and the purchase price will be reduced by distributions to institutional programs after July 1. Torch, which has approved the offer, will recommend it to the institutional programs.

Vintage Petroleum Inc., Tulsa, agreed to buy from units of Burlington Resources Inc., Houston, certain Texas and Louisiana Gulf Coast properties for $114.1 million cash. The properties consist of several onshore fields, five offshore fields, and a number of smaller fields covering more than 74,000 net acres. Vintage will operate and exploit the properties, which produce about a net 5,200 b/d of oil and 17 MMcfd of gas.

El Paso Energy Corp., Houston, started cutting redundant positions in the newly combined El Paso-Tenneco Energy structure. El Paso completed its acquisition of Tenneco Energy early in December 1996. So far, El Paso has cut size of the work force by 261 employees in an effort to improve operating efficiency.

Exploration

Chevron Niugini Pty. Ltd. disclosed its 1X Moran sidetrack discovery in the Papua New Guinea highlands had the highest oil flow rate recorded in Papua New Guinea during a recent drill stem test. The well flowed 8,100 b/d of 44.7° gravity oil and 10.9 MMcfd of gas from Digimu sandstone intervals through 3.5-in. tubing. The well, on PDL 2 about 11 km north of the Agogo processing complex, is part of Kutubu field development.

Fina Exploration Minh Hai, operator of a joint venture with Sodec Vietnam, disclosed 51-UM-1X discovery on Block 51 in the Malay basin off Viet Nam tested at a combined rate of 36.4 MMcfd of gas and 500 b/d of condensate. The well is its third discovery off southwestern Viet Nam. Fina first became involved there in 1990 (OGJ, Aug. 27, 1990, p. 19). Fina owns a 75% interest in the block. Sodec Vietnam, a unit of Japan's Showa Shell Sekiyu KK, has 25%.

Environment

U.S. Environmental Protection Agency approved Arizona's request to add the Phoenix metropolitan area to the reformulated gasoline (RFG) program. RFG will be available at Phoenix service stations at the start of the 1997 ozone season. Areas in 17 states and the District of Columbia are participating.

Pipelines

Petrozuata, a joint venture of Conoco Inc. and Maraven, let a $44.9 million contract to Venezuela's Industria Mecanics Orion SA and Soldadura y Tuberiss de Oriente CA (Soltuca) to supply pipe for a new 125-mile, 36-in. crude oil pipeline to move extra-heavy crude from the JV's 55,000-acre Zuata region block in the Orinoco heavy oil belt to a complex slated at Jose, northern Venezuela. Construction will begin this year, with completion set for 1998. Venezuela's Atlantida Internacional CS will coat pipe. Brazil's Confab was awarded a $16.6 million contract to supply pipe for a separate 125-mile, 20-in. diluent line. Diluent will be mixed with oil transported to Jose, where diluent will be removed, returned in the 20-in. line, and reused.

Williams Field Services, a unit of Williams Cos., Tulsa, will construct a 35-mile, 10-in. gas gathering pipeline from Green Canyon Block 205 Genesis field to a connection with Transcontinental Gas Pipe Line in the Ship Shoal area of the Gulf of Mexico. The system will be able to handle an expected peak flow of 72 MMcfd of gas. Construction will begin in second half 1997. Operator Chevron U.S.A. Production Co. will use a spar to develop Genesis, slated to come on stream late in 1998 (OGJ, Jan. 20, 1997, p. 37).

Amoco Pipeline Co., operating partner of the 76-mile, 54,000 b/d Beartooth crude oil pipeline from Billings, Mont., to Elk Basin, Wyo., placed the line in operation with joint-venture partner Conoco Pipeline Co. The line, which connects with other crude pipelines, began moving oil Feb. 17 from Canada for refining in Colorado, Wyoming, and Utah. Officials said the system eliminates a bottleneck between Canadian oil fields and U.S. refineries in the Rockies. The line connects Conoco's Glacier crude pipeline system, extending from the Canadian border to Billings, with Amoco's Big Horn pipeline.

U.K.'s Department of Trade and Industry issued a consultative document revealing proposals to deregulate a law covering onshore pipelines. While most of the 1962 Pipelines Act is intended to be retained, DTI proposes reducing requirements for notification of plans to build local pipelines. DTI said notification requirements are now set out in Health and Safety Executive pipeline safety regulations. Comments close May 2.

Australia's Victoria government gave environmental approval to the planned $383 million (Australian) Eastern Gas Pipeline project, which will transport Bass Strait gas directly to Sydney. The 750-km pipeline project is a joint venture of BHP Petroleum Pty. Ltd. and Westcoast Energy Inc., Vancouver. The project is awaiting similar approval by the New South Wales (NSW) government. Plans call for gas deliveries in 1998. Separately, the NSW government gave preliminary approval to Australian Gas Light Co.'s proposed $130 million pipeline interconnection between Victoria's gas grid at Wodonga and nearby Moomba-Sydney trunk line at Wagga Wagga.

Drilling-production

U.S. Minerals Management Service postponed meetings slated for Feb. 25 in Houston and Mar. 5 in Lakewood, Colo., regarding a proposed rule changing valuation of crude oil for royalty purposes (OGJ, Feb. 17, 1997, p. 30). MMS decided to extend the period for written comments to Apr. 28 from Mar. 25.

Overseas Private Investment Corp. (OPIC) approved a protocol under which Sakhalin Energy Investment Co. Ltd. can apply for $116 million in project financing to develop Piltun-Astokhskoye field off Russia's Sakhalin Island (OGJ, Nov. 25, 1996, p. 36). U.S. firms involved may also apply for OPIC political risk insurance (see related story, p. 36).

Chesapeake Energy Corp., Oklahoma City, plans production in its third fiscal quarter after completing what it claims is the world's deepest horizontal well, 19-1 Grezaffi in St. Landry Parish, Louisiana (OGJ, Dec. 23, 1996, p. 21). The well tested at a rate of 4.1 MMcfd of gas and 3,200 b/d of oil through a 24/64-in. choke with 3,600 psi flowing tubing pressure from Austin chalk. The well was drilled to 17,413 ft TVD, and a new updip lateral was drilled 4,379 ft from 17,193 ft. A previously drilled 3,090 ft downdip lateral is also productive. Chesapeake, which owns about 150,000 acres in the area, has a 98% working interest in the well. It plans to spud two additional wells in the area in coming months.

Thaipo Ltd., a unit of Pogo Producing Co., Houston, start up Tantawan field in the Gulf of Thailand (OGJ, Jan. 27, 1997, p. 25). Output is expected to reach 75 MMcfd of gas and 8,000 b/d of crude and condensate. Tantawan helped boost Pogo's 1996 reserves, totaling 658.6 bcf equivalent (bcfe). Its Thailand 1996 net yearend reserves were estimated at 273 bcfe, up from 245.6 bcfe a year ago. Pogo reported a 1996 production replacement rate of 147%-excluding the Thai reserve increase-and a total replacement rate of 187%.

Woodside Petroleum Ltd., Melbourne, was awarded a production license for the $1 billion (Australian) development of Laminaria/Corallina oil fields in the Timor Sea off Australia (OGJ, Oct. 28, 1996, p. 26). Production is to begin early in 1999 via the world's largest floating production, storage, and offloading (FPSO) system and wellheads. FPSO capacity will be 1.4 million bbl. Woodside expects peak production of 140,000 b/d from the fields, in 360-420 m of water about 550 km northwest of Darwin. Interests are Woodside 50% and BHP Petroleum Pty. Ltd. and Shell Australia 25% each.

Ashland Nigeria Exploration Unlimited plans to develop Okwori South field on OPL 90 off Nigeria. Production of more than 20,000 b/d is expected by July 1998. As many as six subsea wells could be required, producing into an FPSO. Work is covered by a 1992 production-sharing contract between Nigerian National Petroleum Corp. and an Ashland-Total Exploration Nigeria Ltd. JV. Ashland operates OPLs 90 and 225, covering about 450,000 contiguous acres. Ashland and Total hold equal PSC interests.

Seven Seas Petroleum Inc., Houston, disclosed its GHK Co. Colombia unit plans to spud 1 Tres Pasos stepout by mid-April on Rio Seco block in Colombia's Upper Magdalena basin after disclosing successful results from 2 El Segundo upper Cretaceous Cimarrona appraisal involving Dindal and Rio Seco blocks, about 60 km northwest of Bogota (OGJ, Jan. 27, 1997, p. 98). On pump, 2 El Segundo tested at a combined rate of 15,360 b/d of oil and 1.7 MMcfd of gas from three intervals at 6,054-6,280 ft.

Norway's Den norske stats oljeselskap AS (Statoil) let a $54 million, 5-year contract to Westminster Offshore AS, Stavanger, for offshore gravel dumping involving Statoil's Aasgard and Gullfaks satellite field developments and Europipe II, NorFra, and Ekofisk bypass gas pipeline projects. About 900,000-2 million cu m will be dumped.

Refining

Dubai's Emirates National Oil Co. (ENOC) is expected to let contracts in May for a $400 million, 100,000 b/d refinery in the Jebel A* Free Zone. Work is to begin this summer. the complex will be the first ENOC venture since it was formed in 1993. Tenders are expected in April, and officials said contractor agreements will be signed in May. Phase one, at a cost of about $199 million, is slated for yearend 1998 completion. It will have a capacity of 60,000 b/d of jet fuel, diesel, and naphtha for local consumption. More products will be added to the refining slate later, including gasoline and LPG.

Tankers

Turkey's largest oil tanker, the 159,982-dwt TPAO Istanbul owned by Turkey's Ditas, exploded and caught fire Feb. 13 while in drydock for repairs at Tuzla. The blaze, which injured 30, mostly firefighters, spread to four other vessels at the port, but those fires were extinguished. Firefighters, aided by officials of state-owned Tupras, controlled the blaze Feb. 14. Officials blamed the accident on a gas build-up in one of the tanker's holds, which was not inspected prior to the start of repairs.

Courts

Exxon Corp. is appealing to the U.S. Circuit Court of Appeals for the Ninth District in San Francisco a $5.058 billion amended final judgment rendered Jan. 17 at Anchorage by the U.S. District Court, stemming from the 1989 Exxon Valdez tanker spill in Alaska's Prince William Sound. Exxon claims the judgment is excessive, unwarranted, and unconstitutional.

Petrochemicals

Kemcor Australia, a venture of chemical units of Exxon Corp. and Mobil Corp., purchased the plastics business of Hoechst Australia for $80 million (Australian) amid continuing petrochemical restructuring in that country. Both Kemcor and Hoechst base their Australian operations at Altona, near Melbourne. The deal will double Kemcor's capacity of 260,000 metric tons/year of polyethylene and polypropylene.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.