INDUSTRY BRIEFS

EXPLORATION

TOTAL drilled a significant discovery on its Mahakam permit off eastern Kalimantan, Indonesia. Its 1 Nubi wildcat flowed 1,650 b/d of 28 gravity oil from one zone and a combined 60 MMcfd and 1,200 b/d of condensate from three others. Total depth is 3,535 m. The strike is 25 km south of Sisi field, discovered in 1956. Plans call for an immediate appraisal, 2 Nubi. Total is permit operator in partnership with lnpex under a production sharing contract with Indonesia's Pertamina.

ALASKA'S Department of Natural Resources (DNR) is seeking information and comments on proposed oil and gas lease Sale 83 in the western Beaufort Sea, scheduled for November 1995. The sale will include about 190,000 acres in and near Smith Bay between Pitt Point and Tangent Point. Comments will be accepted until Apr. 30, 1993. DNR plans Feb. 23, 1993, to issue a final finding and decision on Nanushuk Lease Sale 77 and is accepting comments until Dec. 28, 1992. It also adjusted and deleted acreage for the Kuparuk uplands Lease Sale 75.

TRANSPORTATION

RUSSIA plans to place 3,831 miles of gas pipeline in operation in 1993, including 1,612 miles of large diameter trunk line. Russia's gas distribution enterprise estimates it will need $114-123 million/year to provide more gas to users. The republic is emphasizing construction of small diameter lateral gas lines using polymers instead of steel to serve smaller towns that were bypassed by major trunk lines only a small distance away. In the early to mid-1980s the former U.S.S.R. laid as much as 6,000 miles/year of gas trunk lines and laterals.

ESTONIA obtained a $46.2 million loan from European Bank for Reconstruction & Development to build a terminal at Tallinn to offload imported oil arriving by tanker. That will give the Baltic nation flexibility beyond its near total reliance on Russian oil and gas imports.

CANADA'S National Energy Board will conduct an inquiry on the federal Transportation Safety Board's recent recommendations on external stress corrosion cracking in pipelines. It will focus on TransCanada PipeLines' maintenance program in light of two pipeline breaks on the company's gas pipeline system near Tunis and Cardinal, Ont., in December 1991. Deadline for participation is Jan. 11.

WESTERN GAS RESOURCES INC., Denver, received permits to begin construction of the Katy natural gas storage and exchange facility near Katy, Tex. The site will have capacity for about 22 bcf of working gas and have a compressor/gas transfer facility that will provide an exchange service among as many as 13 gas pipelines. Peak deliverability will be more than 400 MMcfd. Total cost of the project, to be on line by early fall 1993, is $65-70 million.

HOUSTON FUEL OIL TERMINAL CO. (Hfotco) commissioned 1.3 million bbl of crude oil and fuel oil storage tanks and its second 42 ft draft ship dock at its Channelview, Tex., terminal. Part of the new storage is connected by pipeline to an area refiner, marking the company's entrance into crude oil terminating. Completion of the $25 million facilities brings Hfotco's total storage capacity to 6.5 million bbl. Hfotco is a partnership of Chartco Terminals and Shell Oil Co.

BRENT AND NINIAN pipeline participants, representing 32 oil companies operating in the North Sea, wrapped up an agreement to commingle liquids at Sullom Voe terminal in the Shetland Islands. Comingling both streams upstream of stabilization trains started Dec. 1 . The agreement eliminates the need for separate Brent and Ninian facilities, enabling further reduction of operating costs and plant rationalization. Sullom Voe's four 330,000 b/d stabilization trains have exported comingled Brent blend crude since July 31, 1990.

PETROCHEMICALS

LANZHOU CHEMICAL INDUSTRY CORP. let contract to M.W. Kellogg Co., Houston, for a major expansion of its ethylene plant in China's Gansu province. Kellogg is to provide design and basic engineering for five more Millisecond furnaces to double plant capacity from 80,000 metric tons/year. Kellogg started up the plant's existing five Millisecond furnaces, fed by naphtha, gas oils, and recycled ethane, in April 1988.

ENRON CORP. dedicated its 15,000 b/d methyl tertiary butyl ether plant at Morgan's Point, Tex. The plant started up Nov. 1 and will receive isobutane feedstock from an Enron isomerization unit at Morgan's Point and methanol from an Enron plant at Pasadena, Tex. M.W. Kellogg handled engineering, procurement, and construction.

JAPAN'S Teijin Ltd. and Amoco Performance Products Inc. (APPI) agreed to form Teijin Amoco Engineering Plastics Ltd., Tokyo, to develop and market superengineered plastics. The joint venture will import APPI resins and develop and offer locally compounded alloys based on both company's materials. The company is expected to develop new grades of Amoco's Amodel polyphthalamide for Japanese customers. The 50-50 venture was to be effective Dec. 18.

A SPECIAL COMMISSION will investigate two explosions Dec. 5 at Russia's Sterlitamak Caustic Production Society. Two workers were killed and a polyvinyl chloride plant extensively damaged in the accident. Early reports pointed to a large volume of gas leaked as a possible cause.

NOVACKE CHEMICKE ZAVODY (NCZ), a Slovak chemical firm based 140 km northeast of Bratislava in Slovakia's Upper Nitra Valley, retained Wright Killen & Go., Houston, to help secure partners to form a joint venture during the final steps of NCZ privatization. Formed in 1940, NCZ specializes in PVC and allied products, calcium carbide, and organic chemicals. The company is vertically integrated within the PVC business and has diversified to build a significant presence in European calcium carbide markets.

SHELL OVERSEAS INVESTMENTS BV acquired another 20% of the shares of Petrochemical Corp. of Singapore Pte. Ltd. (PCS) from the Singapore government, bringing its equity interest in the company to 50%. Japan-Singapore Petrochemicals Co. holds the remaining shares. PCS, the sole ethylene producer in Singapore with capacity of 400,000 metric tons/year, plans to double capacity by 1996.

ENVIRONMENT

TEXAS GENERAL LAND OFFICE in January 1993 will step up random inspections of oil spill contingency plans filed by 600 Gulf Coast oil handling facilities seeking operating certification under the Oil Spill Prevention and Response Act of 1991 (Ospra). To be certified under Ospra, facilities must have and be able to implement a realistic oil spill contingency plan. Land office inspections will include audits of companies' plans and personnel training records and inspections of cleanup and oil handling equipment.

DRILLING-PRODUCTION

BOW VALLEY (OGAN KOMERING) LTD. and Pertamina began production Dec. 1 from Air Serdang field on the Ogan Komering production sharing contract (PSC) in South Sumatra, Indonesia, at a rate of 3,000 b/d from Baturaja limestone, Two oil fields, Air Serdang and Guruh, and one gas field, Mandala, have been discovered on the PSC since February 1988. Guruh field is expected on line in mid-1993 using Air Serdang production facilities, and by yearend 1993 production from both fields is expected to reach 8,300 b/d.

POLISH OIL & GAS CO., Poland's upstream state petroleum company, ordered two custom built drive-in workover rigs under a $3.6 million contract with Cardwell International Ltd., El Dorado, Kan. Cardwell last week was to ship the first of the two rigs from Houston to Poland. The second will be shipped in mid-January. Cardwell designed the rigs to operate in cold weather and meet Polish highway standards.

ENERGY VENTURES INC., Houston, unit Highland Co. and Azerbaijan's state owned Azneftmash Concern formed a joint venture to manufacture artificial lift equipment, mainly sucker rod pumps, at Baku for sale in the C.I.S. Highland will hold a 51% interest and Azneftmash 49%. Highland will contribute technology and engineering and design methods, Azneftmash manufacturing facilities. The venture is to start up by yearend 1993 under Highland management.

NADYMGAZPROM, local production association in Russia's Tyumen region, began production from Yubileiny gas field without foreign investment. It is expected to produce as much as 1 .4 bcfd.

ENERFORCE ENERGY LTD., Vancouver, Wash., purchased Pretty Water gas field in South Wyoming from Grace Petroleum Corp., Oklahoma City, and Great Western Drilling Co., Midland, Tex. The deal includes an 880 acre lease with five wells completed in Permian Phosphoria at about 7,000 ft. Estimated proved reserves total 53 bcf with a methane content of 35%. Enerforce plans to use its wellhead gas cogeneration system and a gas splitting system in one facility for production, expecting to realize revenues of $4.5 million/year for 10 years.

GERRITY OIL & GAS CORP., Denver, plans to buy oil and gas leases in Wattenberg field in Colorado's Denver-Julesburg basin for $131.2 million. The deal includes about 414 producing wells, 750 drillsites, 100 miles of pipeline, and an interest in a water disposal facility. Net production from the wells is about 1 700 b/d of oil and 30 Mmcfd of gas. Gerrity said the purchase will essentially double the company's size.

TOTAL OIL MARINE PLC received U.K. Department of Trade and Industry (DTI) approval to develop Dunbar oil field on North Sea Block 3/14a. Recoverable reserves are estimated at 119 million bbl of oil and 508 bcf of gas, with a field life of 18 years. Production is scheduled to begin in December 1994. Dunbar will be developed using a minimally manned platform as a satellite to North Alwyn field, with a semisubmersible for tender assisted drilling.

PHILLIPS PETROLEUM CO. U.K. LTD. received DTI approval to develop Ann gas field. Lying on Blocks 48/10a and 49/6a in the southern North Sea, the field is estimated to hold 127 bcf of gas, with a 14 year life. Production is to begin in October 1993 using a subsea structure to export gas via the Conoco (U.K.) Ltd. Loggs complex 25 miles away, then on to the Theddlethorpe terminal.

MARAVEN SA agreed to extend contracts 1 year for each of two Cliffs Drilling Co. jack ups working in Lake Maracaibo, Venezuela. The extensions are effective Jan. 15, 1993, for the Marquette and Feb. 9, 1993, for the La Salle.

COMPANIES

HALLIBURTON GO. signed a letter of intent to acquire Smith International Inc.'s Directional Drilling Systems & Services for about $240 million of Halliburton common stock and fold it into Energy Services Group.

HORSHAM CORP., St. Louis, agreed to acquire all outstanding shares of Clark Oil & Refining Corp. from AOC LP, a Missouri limited partnership owned by P.A. Novelly and S.R. Goldstein, for $100 million and other considerations, giving Horsham 100% ownership of Clark. The deal, which was scheduled to close about Dec. 21, includes a contingency payment to AOC of $25 million within the next 4 years if Clark's financial performance substantially exceeds current levels and a warrant to buy 3 million Horsham shares the next 2 years.

BELDEN & BLAKE CORP. (B&B), North Canton, Ohio, agreed to pay $35 million for outstanding shares of two Presidio Oil Co. units that own its West Virginia producing leases. The units, Peake Energy Inc. and Peake Operating Co., own about 43 bcf of proved developed reserves of gas and associated gathering systems as well as 50,000 bbl of oil. Presidio will retain about 30 bcf of proved undeveloped gas reserves and 84,000 net undeveloped acres in West Virginia that it and B&B expect to develop jointly.

ABB LUMMUS CREST acquired assets and current projects of Czech owned Chemoprojekt SP, an engineering company in Brno, Czechoslovakia, that specializes in refining, petrochemical, and oil and gas processing projects. ABB Lummus acquired the company from the national property fund of the Czech republic as part of Czechoslovakia's privatization process.

REFINING

PETROGAL SA, Portugal's state refining company, let a $70 million turnkey contract to Badger Co. for a new gasoline complex at its 206,000 b/d Sines, Portugal, refinery. The new unit will give Petrogal more capacity to produce reduced emission, higher octane gasoline. Badger, a unit of Raytheon Co., Lexington, Mass., will provide engineering, procurement, and construction services for the complex to be complete in mid-1994.

SHELL U.K. LTD. plans to cut 500 jobs at its 262,000 b/d Stanlow, Cheshire, U.K., refinery, citing economic difficulties and overcapacity in refining and petrochemicals operations in Europe. It plans to offer generous voluntary severance packages to the plant's 1,850 employees but expects additional layoffs will be required.

TATARSTAN, a republic seeking independence from the Russian Federation, signed an agreement with Lithuania to refine 11 million bbl of Tatar crude at Lithuania's Mazheikiai refinery. The products will be exported. Tatarstan also agreed to invest in improvements for the oil export terminal at Lithuania's Baltic Sea port of Klaipeda. In return, Lithuania will invest in Tatarstan's oil producing industry.