Offshore northern Europe, despite its age as a hydrocarbon producing province, is likely to remain a major factor in world oil supply for years to come.
The Norwegian Sea will provide a major boost to Offshore Norway's oil production this year when Heidrun giant oil and gas field starts up.
That is expected to occur on schedule despite a mishap May 3 when Conoco dropped the second of 16 tethers to be installed as part of the world's first concrete tension leg platform (TLP), built to develop Heidrun. During the 150 mile journey from Norway's Ulrika yard to Block 6507/7, straps holding buoys at each end of the tether gave way. The 270 m long tether was laid on the seabed. The first tether was installed Apr. 30. Plans call for installing the remaining tethers before floating the sunken one and installing it last.
The field, 50 miles south of the Arctic Circle and the world's northernmost offshore development, is to start production in mid-August and build to 200,000 b/d by yearend. Reserves are 750 million bbl of oil and 1.6 tcf of gas.
The topsides is to be towed to the field June 26, when Conoco will hand over field operatorship to Statoil. Oil will be loaded into shuttle tankers via one of two loading buoys. Gas is to be reinjected until a methanol plant under construction at Tjeldbergodden, Central Norway, starts up in 1996 and uses the gas as feedstock. Project cost is $4 billion.
BP has decided to export oil produced under the first phase of development of Foinaven field in U.K.'s West of Shetland province via Flotta terminal in the Orkney Isles. Options studied for Foinaven crude included shuttle tanker transport to Flotta, Sullom Voe terminal in the Shetland Islands, Nigg terminal in Scotland, and direct shipment to Rotterdam. The transshipment contract will be awarded for at least 5 years.
Flotta terminal, operated by Elf Enterprise Caledonia, has capacity to receive 500,000 b/d of crude. Current Flotta throughput is about 300,000 b/d. Elf Enterprise expects Foinaven deliveries to reach 85,000 b/d and is looking for other business from developments expected in the West of Shetland area.
A total of 67 U.K. offshore fields with estimated combined reserves of 3 billion bbl of oil and 10.5 tcf of gas are candidates for development by 2000, says Wood Mackenzie. The Edinburgh analyst last year compiled a list of 62 development prospects. Since then 17 fields have received development approval. Total outlay required to develop these fields is estimated at $16 billion vs. $26 billion thought needed to develop the 1994 list of fields. Wood Mackenzie contends total output from these fields could peak at about 840,000 b/d in 2000, with flow of about 800,000 b/d in 1998-99 helping to sustain a new peak in U.K. production projected at 2.75 million b/d in 1997. Subsea technology is likely to be the predominant development method, accounting for 28 of the 67 prospects. Floating production systems will account for 15 others, with the rest platforms.
Britain's Department of Trade & Industry (DTI) is seeking comments on its draft guidelines for abandonment of platforms.
Deadline is Aug. 4 for submission of comments to DTI's Aberdeen office. DTI earlier said a "best practicable environmental option" (BPEO) assessment would be a key requirement for each abandonment proposal (OGJ, Mar. 20, p. 36). DTI's proposal hit an obstacle Apr. 30 when Greenpeace members, protesting the abandonment policy, seized Brent field's spar loading buoy in the U.K. North Sea (OGJ, May 8, p. 25). DTI approved Shell Expro's plans to dump the spar in deep water about 200 miles northwest of Britain during the summer.
Ireland will assume responsibility from oil companies for holding strategic oil stocks. The new stock holding entity, National Oil Reserves Agency, will have its costs met by a 2.8/gal levy on oil products sales. Oil companies will be able to recoup a portion of the levy without passing on all the costs to customers by being relieved of the present requirement to hold stocks for 80 days and because Whitegate refinery will receive a subsidy to help keep prices down. Emmet Stagg, minister for Transport, Energy & Communications, said, "These measures will enable Ireland to improve the manner in which strategic stocks are held while keeping the cost to a minimum."
OPEC production is on the rise again. OPEC output was slightly under 25 million b/d in April, Middle East Economic Survey (MEES) reports. Production of 24.99 million b/d was a jump of 400,000 b/d from March. Iran was largely responsible for the low March level and the April increase, hitting its 3.6 million b/d quota last month after slumping to 3.28 million b/d in March.
Tehran's output fall in March resulted from marketing problems as some multinationals shied away from buying Iranian crude because of its high price rather than the then-impending U.S. ban on trade with Iran, MEES contends.
U.S.-Iran friction isn't easing (see related story, p. 23).
Iran is trying to oust western firms from the Caspian Sea by invoking a 1940 Soviet-Iranian agreement that sought to put the sec[ off limits to any states, ships, or companies not belonging to countries that border the Caspian.
Tehran is increasingly critical of Azerbaijan after Baku dropped Iran from the group developing Caspian Sea oil fields. Although Baku has offered Tehran participation in other Azeri fields, anti-Azeri criticism is mounting in Iran.
Industry restructuring continues apace.
Ashland Petroleum Co. plans a sweeping management reorganization to give it an edge in an extremely competitive refining business.
Plans call for adopting what Ashland calls a "cross-functional management concept" and implementing an enhanced early retirement program to cut 250 jobs. If the early retirement effort fails, layoffs will follow. Ashland expects to book a charge of about $25 million in fiscal 1995 as a result.
U.S. EPA has granted Wisconsin Gov. Tommy Thompson's request to opt Sheboygan. Manitowoc, and Kewaunee counties out of the reformulated gasoline program. Effective immediately, sale of conventional gasoline is allowed in these moderate ozone nonattainment areas.
The National Research Council has recommended a more flexible approach to managing U.S. wetlands, adopting different wetlands definitions for different regions. Landowners and developers, including some oil operators, complain the wetlands permitting system is too restrictive. Last week, the House took up a Clean Water Act reauthorization bill that would bring some reform.
U.S. DOE is seeking requests for proposals for cost shared field R&D in a fourth class of oil field demonstration projects.
BDM-Oklahoma Inc., managing and operating contractor for DOE's National Institute for Petroleum and Energy Research at Bartlesville, Okla., issued the request for proposals covering strandplain/barrier island oil reservoirs.
Oil field operators that agree to demonstrate existing or new advanced technologies that can extend the life of the targeted reservoir types can receive as much as 50% in federal matching funds. Of the three earlier programs, 23 projects are under way, and six are being negotiated.
Officials of 88 companies braved flooding and severe weather last week in New Orleans to offer 880 bids for 588 tracts at MMS Sale 152 for acreage in the Central Gulf of Mexico. The number of bids offered and number of tracts receiving bids both were the fourth biggest of 41 federal sales in the central gulf. Apparent high bids totaled more than $307.3 million, nearly triple the level of interest MMS expected. MMS Director Cynthia Quarterman attributed much of the heavy turnout to the agency releasing ahead of the sale for the first time more data about relinquished tracts with confirmed discoveries.
Western petroleum companies continue to chase deals in the sizzling economies of East Asia.
Coastal has signed a joint venture contract with Chinese state companies to build and operate a 40,000 kw, diesel fired electric power plant in Wuxi City, China, at a cost of $26 million. Construction is to begin this month and start-up in September. A second phase would more than double plant output. Electricity will be sold under a 15 year take or pay contract.
BP and Sinopec have agreed to study feasibility of building a world scale acrylonitrile plant in China around the turn of the century. The study will focus mainly on marketing data, potential locations, and infrastructure.
BP, Union Carbide, and Samsung have entered into a venture to manufacture vinyl acetate monomer (VAM) for the Asia-Pacific region.
The venture, Asian Acetyls Co. Ltd., will build a 150,000 metric ton/year VAM plant at Ulsan, South Korea.
It will adjoin and get feedstock from an existing 200,000 ton/year acetic acid plant that BP and Samsung operate and plan to expand by 200,000 tons/year through debottlenecking the next 2 years. Construction on the VAM unit will start midyear, with completion set for third quarter 1996.
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