INDUSTRY BRIEFS

Exploration

A CMS Nomeco International Inc. group found large new reserves in Cretaceous Lower Sendji with an exploratory well drilled from a Yombo field platform off Congo. The well cut existing Cretaceous Upper Sendji and Tchala pays and logged 135 ft of net pay in three new deeper hydrocarbon bearing zones to TD 9,930 ft measured depth, 7,875 ft true vertical depth. The group will sidetrack and deepen to 11,850 ft MD to evaluate a large presalt closure identified on 3D seismic data.

Egyptian General Petroleum Corp. awarded a group led by British Gas plc a 4 year license to explore Block 1 in the Red Sea off Egypt. The concession covers more than 12,000 sq km, nearly half Egypt's Red Sea territory. Partners during the term of the license must spend at least $6 million on exploration, including drilling one well. Operator British Gas holds 44% interest in the license, Lasmo Oil Egypt Ltd. 36%, and Edison International SpA 20%.

Harken Energy Corp., Dallas, last week was to begin mobilizing drilling equipment to Rio Negro prospect in Colombia's Middle Magdalena basin where it will drill 2 Torcaz well to TD of about 9,000 ft to test Tertiary Mugrosa, Esmeraldas, and La Paz formations for oil. Harken expects to spud mid-July.

Westmount Energy Ltd., St. Helier, Jersey, U.K., agreed to take a 20% stake in Desire Petroleum Ltd., London, a company set up to bid for license interests in the forthcoming Falkland Islands offshore licensing round. Westmount said Desire has a 20% interest in a bidding group headed by operator Lasmo plc, London. The Falklands' government tendered 19 groups of blocks last year, with a July 1, 1996 deadline (OGJ, Oct. 9, 1995, p. 36).

Refining

Coastal Aruba Refining Co. NV let contract to Parsons Process Control Group unit of Parsons Corp., Pasadena, Calif., to design improvements to the saturate gas plant at Coastal's refinery at San Nicholas, Aruba. The upgrade, to be completed in September, will increase the plant's capacity to produce naphtha, process liquid propane for local sale, and produce mixed butanes for export. The refinery's saturate gas plant extracts liquefied petroleum gas from crude oil feedstock.

Interline Resources Corp., Alpine, Utah, agreed to build two 500 b/d used oil refineries for environmental services companies in Montreal and Cleveland. The two plants, each costing about $3.3 million, are to use Interline solvent extraction technology to refine used oil into marketable base oils, diesel fuel, refinery feedstock, industrial lubricants, and asphalt modifiers. Sani Mobile, Quebec, and Research Oil Co., Cleveland, also agreed to pay Interline a 5/gal royalty on finished products.

Drilling-production

Russia's Lukoil is expected to replace state gas giant Gazprom in a group hoping to develop Kazakhstan's giant Karachaganak gas field in a $6 billion project. The group's joint operators, British Gas plc and Agip SpA, reportedly brought Gazprom into the group to help secure a gas export route to Russia's pipeline grid. Sources in the group claimed Gazprom had not paid maintenance costs attributed to its 15% share in the venture because it was preoccupied with other projects. Karachaganak reserves are estimated at 20 tcf of gas and 2 billion bbl of liquids (OGJ, July 13, 1992, p. 24).

Chinese National Petroleum Corp. (CNPC) signed a cooperative agreement with Enron Oil & Gas Co., Houston, to evaluate prospects for further development and improved recovery in China's Sichuan basin. The pact calls for a 13 month study of 19,000 sq km Chuanzhong block, which contains several fields producing crude oil and natural gas. Pilot tests are planned to assess the economic viability of the study area ahead of any joint development agreements.

Coastal Oil & Gas Corp. and partners gauged a combined flow of 56.8 MMcfd of gas and 542 b/d of condensate from two Northeast Jeffress field extension wells in Hildalgo County, Tex. The 1 Coates F well tested at 31 MMcfd of gas and 240 b/d of condensate from Tertiary lower Vicksburg at 13,322-13,784 ft after logging 623 ft of net pay in four zones. The 2 Coates F flowed 25.8 MMcfd and 302 b/d from lower Vicksburg at 13,828-14,292 ft and logged 341 ft of net pay in three zones. Coastal holds various interests in 1,200 acres in the area.

ARCO Qatar Consortium is on schedule to start producing 35,000 b/d of oil by Sept. 1 at Al-Rayyan field off Qatar under a development plan effective through May 2017. The field's discovery well flowed at a pump restricted rate of 9,655 b/d from a 2,200 ft horizontal lateral at an undisclosed depth. Interests are operator ARCO and Gulfstream Resources Canada Ltd. 27.4% each, British Gas 25%, Wintershall 15%, and Preussag Energie 5%.

BP Exploration Operating Co. Ltd. let contract for an undisclosed sum to Framo Engineering AS, Bergen, Norway, for supply of three subsea multiphase flow meters for use in its $2.4 billion Eastern Trough Area Project (ETAP) development in the U.K. North Sea (OGJ, Jan. 22, p. 21). The meters, important for BP's ability to optimize production from the fields because no well test facilities will be available, are to be installed at a depth of 90 m in Monan and Machar fields to measure unprocessed well fluids before export to Marnock platform.

Total Oil Marine plc acquired BHP Petroleum Ltd.'s 12.43% interest in North Sea Mungo and Monan oil fields. Operator BP Exploration Operating Co. Ltd. is developing the fields as part of its ETAP development. The sale is part of BHP's efforts to divest nonstrategic assets, and BHP's U.K. focus will be on Liverpool Bay, southern North Sea, Bruce field area, and west of Britain.

Seven Seas Petroleum Inc., Houston, expected to start a 15 day production test of 1 El Segundo well on Emerald Mountain prospect in Colombia's Magdalena basin last week after receiving permits for the operation from Colombia's energy and environmental ministries. The company will truck oil from the test 78 miles to a terminal, where it is to be sold.

Norway's Den norske stats oljeselskap AS (Statoil) let contracts worth $110 million to ABB Offshore Technology AS, Stavanger, for maintenance and modification work in Troll and Sleipner fields. The contracts run for 3 years, with options for three 2 year extensions. The Troll contract will involve work on the field's A platform and Kollsnes onshore gas treatment plant, for which Statoil assumed operatorship this month (OGJ, July 1, p. 42).

Union Pacific Resources Group acquired part of Nuevo Energy Co.'s Austin chalk oil and gas interests in Giddings field in Texas and Brookeland field in Texas and Louisiana for $27.3 million cash. Involved are reserves of about 19 bcf of gas and 970,000 bbl of oil and production of about 19 MMcfd and 1,090 b/d.

Diamond Offshore Drilling, Inc. let contract to Texas Drydock Inc. (TDI) to refurbish its Ocean Victory semisubmersible drilling rig to increase its water depth capacity to 5,000 ft from 1,000 ft at a cost of about $110 million. It is the third Diamond Offshore rig TDI is converting. Diamond Offshore's Ocean Quest drilling unit is scheduled for delivery in early August 1996, and Ocean Star for delivery 3 months later. TDI is to finish converting Ocean Victory by Aug. 15, 1997.

U.S. Bureau of Land Management(BLM) released an environmental impact statement for proposed drilling in the Moxa Arch region of Southwest Wyoming. BLM said oil companies have drilled 957 wells in the three county area and have proposed to drill as many as 1,325 more wells the next 10 years.

Tankers

Mobil Shipping & Transportation Co. let contract to Sumitomo Heavy Industries Ltd. for two double hull very large crude carriers (VLCCs), each with capacity for as much as 2.2 million bbl of crude oil. The 280,000 dwt, 1,100 ft long by 190 ft wide VLCCs, to be delivered in October 1998 and May 1999, will bring to four the number of double hull VLCCs in Mobil's fleet.

Cogeneration

Osborne Cogeneration Pty. Ltd., a venture of CU Power unit of ATCO Group, Calgary, and Boral Energy, Australia, is to begin construction in October 1996 of Australia's largest private cogeneration plant. The 180,000 kw, gas fired cogen complex at Osborne, South Australia, will sell power to ETSA Corp.-formerly the Electric Trust of South Australia-and steam to Penrice Soda Products Pty. Ltd. for a soda ash plant near Adelaide. CU Power Australia Pty. Ltd. unit of ATCO recently closed financing for the $170 million (Australian) project.

Companies

Clyde Petroleum plc, London, agreed to acquire Crusader Ltd. from Triton Energy Ltd., Dallas, for $69 million. Clyde agreed to pay $1.67 (Australian) for each Crusader share it doesn't already own, or about 80% of Triton's original stake in its Australian oil and gas unit. Clyde earlier acquired the other 20% of Triton's Crusader interest.

Halliburton Co. agreed to acquire Landmark Graphics Corp., Houston, in a tax free stock transaction worth about $557 million. The merger, subject to shareholder and antitrust approvals, is to close in fall 1996. Halliburton and Landmark also want to form an alliance with a third company to develop a global oil field data management capability.

Marketing

Neste Oy bought out partners in Lithuanian venture Litofinn Service, previously owned 50% by Neste, 30% by Lietuvos Kuras, and 20% by Mazeikai Nafta. Under the deal Neste will take over nine service stations in Lithuania, the first retail outlets it established there. Neste will begin construction work this year on another four gasoline stations in Lithuania. Neste recently disclosed plans to build a refined products import terminal at Riga to serve its retail outlets in Latvia, Lithuania, and Belarus (OGJ, July 1, p. 46).

Neste plans to open five more service stations by June 1997 near St. Petersburg, Russia, including two equipped with the region's first brushless car washes. In addition to selling Neste's standard 95 octane gasoline, two grades of low volatility, low emission gasolines, Russian 92 octane gasoline, and diesel, the 24 hr/day Neste St. Petersburg outlets also will feature convenience stores selling beverages, snacks, and groceries and automotive care and maintenance products. Construction is to start in August 1996.

Pipelines

Gasoducto GasAndes SA settled the route of a 24 in., 4 km gas distribution lateral for the city of San Alfonso, Chile, adding another customer for Argentine gas to begin flowing by May 1997 to Santiago, Chile, by way of a 465 km trunk line from La Mora, Argentina. Construction is to begin soon.

Enron Corp. and Yacimientos Petroliferos Fiscales Bolivianos (YPFB) revised terms covering Enron's role in the $1.7 billion Bolivia-Brazil gas pipeline (OGJ, July 1, Newsletter). Terms of the new agreement call for Enron to have all financing lined up and start construction by June 15, 1997. The companies also agreed to a combined profit margin cap of 18.5%. Meanwhile, Bolivia's government has pushed back by 2 months the date for YPFB's privatization to Sept. 26 from July 24.

Government

U.S. Environmental Protection Agency is giving service stations selling more than 10,000 gal/month of products an additional 6 months to ensure gasoline pumping rates do not exceed 10 gal/min. The pumping rate limit is intended to enhance the performance of current and future evaporative emission and onboard vapor recovery systems. EPA said most U.S. stations already are complying with the 10 gal/min rate.

EPA proposed a program to reduce nitrogen oxide and hydrocarbons emissions from heavy trucks and buses effective with the 2004 model year. The agency said such vehicles contribute 20% of mobile source nitrogen oxide emissions. When the truck and bus fleet turns over around 2020, the new standards are expected to cut emission by about 1.2 million tons/year, a 50% savings from current levels.

U.S. Department of Energy sold Basis Petroleum another 940,000 bbl of oil from Weeks Island Strategic Petroleum Reserve site for $17.20-17.90/bbl. The deal brought to 2,485,000 bbl the volume of SPR crude DOE has sold to private companies at an average price of $18.52/bbl. Congress has directed the federal agency to sell $227 million worth of oil for budgetary purposes.

U.S. Minerals Management Service invited comments about proposals to allow third parties to administer training program certifications for lessee and contractor employees working on the U.S. Outer Continental Shelf. MMS said an entity such as an industry association might perform a role in training program certification.

Spills

Colonial Pipeline Co. at presstime had recovered more than 492,000 gal of about 735,000 gal of diesel fuel spilled after its refined products pipeline ruptured at the Reedy River near Greenville, S.C., June 26. Cleanup efforts continued as of June 29, when Colonial completed repairs to the 36 in. main line that extends from Houston to Greenboro, N.C.

U.S. Transportation Department's research and special programs administration (RSPA) issued a final rule setting oil spill planning and response requirements for oil shipments in tank trucks and cargo tank cars. The rule covers shipments greater than 42,000 gal. RSPA also issued a final rule setting performance standards for excess flow valves that close automatically to restrict the flow of gas when a pipeline is ruptured.

Copyright 1996 Oil & Gas Journal. All Rights Reserved.