Canada's Atlantic provinces are commanding center stage in that country's frontier exploration arena for the moment.
Western Newfoundland is shaping up as an exploration hot spot after reports of encouraging hydrocarbon shows in a rank wildcat Hunt Oil, Dallas, and PanCanadian Petroleum (PCP), Calgary, drilled there recently (OGJ, June 26, p. 32). The two companies have committed to drill a second wildcat in western Newfoundland after acquiring a farmout on Mobil Canada acreage. They will pay 100% of costs of drilling and testing a 9,840 It wildcat to earn an interest in Mobil's two offshore licenses. Permitting is under way for a directional well to be drilled from share at Long Point on the northern side of the Port au Port Peninsula to an offshore location on Mobil license EL 1011 in Port au Port Bay.
The well will spud after permits are in hand and release of the rig that drilled the 15,000 ft Hunt-PCP 1 Port au Port tight hole. In addition, Hunt and PCP have until Jan. 16 to drill a well on Hunt's offshore block south of 1 Port au Port, and authorities may extend the license term to allow a summer spud date.
Canadian Roxana, Tulsa, has formed a venture with Tucan Ventures, Vancouver, B.C., to explore an 85,928 acre permit in western Newfoundland next to a planned 15,000 It wildcat Talisman, Calgary, will spud in December.
Two Canadian firms are taking a new look at extending a gas pipeline from Quebec to the Atlantic provinces. TransCanada and Gaz Metropolitain, partners in the shelved Trans Quebec & Maritimes pipeline, estimate the line could be built from Quebec to New Brunswick for about $220 million (Canadian).
The project was first considered in the late 1970s and early 1980s but was shelved for economic reasons. Gaz Metropolitain is looking for industrial customers. Utilities in the region are currently served by coal and oil.
TransCanada and Gaz Metropolitain also are considering participating in the $2 billion Sable Island gas development project off Nova Scotia.
Canada is willing to consider fiscal incentives for more western Canada oilsands development, says Resources Minister Anne McLellan.
A national task force recently recommended the federal government provide $2.8 billion (Canadian) in tax and royalty incentives. It contends expansion of oilsands operations in northern Alberta could triple production and provide about $25 billion in added investment and 44,000 jobs the next 25 years.
McLellan said no immediate help is available because Ottawa is dealing with a deficit, but there would be tremendous long term benefit from expansion.
She said government will soon work with industry on R&D for more economic and environmentally friendly recovery techniques.
The task force said governments would lose short term revenues by offering incentives but gain $97 billion after 2002 from new development.
Alberta Energy Minister Pat Black said there should be one generic tax and royalty plan for future oilsands developments to attract investors.
MMS is adopting a policy to complete audits of royalty payments on U.S. federal leases within 6 years, probably forestalling congressional legislation to the same effect.
Producers had complained that existing law sets a 6 year statute of limitations on such payments, but they were subjected to and had to maintain records for longer periods. MMS, which detailed a few exceptions to the new policy, said it is trying to complete all audits on a more timely basis.
U.S. companies continue to respond to growing privatization in Latin America. Major U.S. gas pipeline El Paso Natural Gas and giant Mexican engineering and construction firm Empresas ICA Soc. Controladora SA de CV have agreed to jointly develop, construct, operate, and own natural gas pipeline systems and other infrastructure projects-including hydropower-in Mexico, Central America, and South America. The two companies are partners in the Samalayuca II project, a 706,000 kw gas fired power plant slated for Chihuahua.
Look for Venezuela's first E&P profit sharing contracts to be signed in January 1996 (see related story, p. 21). Pdvsa Pres. Luis Giusti said more than 300 companies have expressed interest in participating in bidding for 10 blocks.
A third overseas presentation is planned beyond those in Caracas last week and Houston this week, although the site has not been determined.
About the end of August, seismic and geological data packages will be available, and bidders will have 120 days to prepare tenders.
Taiwan's state owned Chinese Petroleum Corp. (CPC) is casting a broad global net to secure more oil reserves.
Although details are not disclosed, CPC has agreed to team with Elf to explore for oil in Congo, Gabon, and Zaire. CPC Chairman Chang Tzu-yuan says his company also is considering joining with Agip to develop oil reserves in Russia and Africa and with Greece's Tramex to explore for oil in Ukraine.
Chang last week was whistlestopping in Europe to line up these deals and look at major money markets there for issuing either convertible bonds or global depositary receipts in efforts to finance CPC's planned $11.45 billion naphtha based petrochemical/refining complex, Taiwan's eighth naphtha cracker.
Increasing use of gas in cogeneration and conventional power generation is driving gas demand in Denmark so high that a significant supply shortfall is expected after 1997.
Edinburgh's Wood Mackenzie notes Denmark gas utility Dangas now expects domestic gas demand to reach 332.5 bcf/year by 2000 vs. its 1993 prediction that 259 bcf/year would he required by then from Danish oil and gas producer DUC. Wood Mackenzie says DUC can meet the higher demand level in the medium term but has inadequate reserves to support much more in the longer term. DUC has no significant gas fields beyond those currently slated for development that could be brought on line in time to offset the shortfall, and there is little prospect for further gas discoveries off Denmark.
The likeliest solution, says the analyst, is for Dangas to count on growing Danish gas output, possibly coupled with reduced exports through flexibility in German supply contracts until long term supplies can be secured.
Ireland's oil hopes have taken a blow with a Marathon dry hole.
The 41/30-1 wildcat was drilled on Arklow prospect with the Kan Tan IV semisubmersible in 248 ft of water. Marathon plugged the well July 14 after reaching 7,343 ft TD. If successful, it would have justified drilling nearby prospects (OGJ, June 5, p. 17).
Iran plans in coming weeks to invite foreign oil companies to bid for 10 large oil development and refining projects, a disclosure coming soon after France's Total secured a $600 million deal to develop two offshore oil and gas fields (see story, p. 24). More than half the National Iranian Oil Co. (NIOC) bids will involve offshore oil and gas fields.
Among other projects reportedly under consideration are construction of a gas gathering system in onshore Amok field, construction of a refinery at Bandar Abbas, and expansion of NIOC's Lavan Island refinery. NIOC plans to issue tenders detailing the projects this month and then will invite foreign companies to a seminar in Tehran in September to familiarize themselves with the projects.
Arab states face outlays of almost $20 billion to 2010 to upgrade and expand refineries to meet growing world demand, says the Organization of Arab Petroleum Exporting Countries (Oapec) in a new study.
With projects currently on tap, Arab refining capacity is expected to rise only to 6 million b/d by 2000 from the current 5.7 million b/d. These projects will be required in circumstances where margins are receding, Oapec notes.
Expansions will create local surpluses in all refined products except gasoline, kerosine, and jet fuel.
Nigeria's government has threatened reprisals against BP and Royal Dutch/Shell over Britain's criticism of its military regime.
U.K. ministers have protested Nigeria's treatment of 40 people accused of plotting to overthrow leader Gen. Sani Abacha, saying Nigeria will not he welcome at a November summit of former British colonies.
The U.K. Foreign Office said Nigeria's Oil Minister Dan Etete summoned local representatives of Shell and BP to his office July 11 to inform them of the government's displeasure at Britain's actions, although there were no specific threats.
"Oil companies are major contributors to Nigeria's economy," the Foreign Office said. "It would not be in the interest of Nigeria , s government to prevent them working there."
Shell operates ventures producing more than half of Nigeria's crude oil production of almost 2 million b/d. BP is partner to operator Statoil in four exploration licenses off Nigeria, where only seismic surveying has taken place to date.
BP had more extensive operations in Nigeria until 1979, when a previous military regime nationalized its oil operations and took over its assets.
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