OGJ NEWSLETTER

Eastern European countries are seeking--and getting--more foreign aid and technology.

The U.S. Agency for International Development has given Hungary a $10 million grant to support reform of its energy sector. The grant will reimburse Hungary for imports of as much as $10 million in U.S. goods, but Hungary must use the refunded money to pay for a program to help low income consumers hit by energy price increases. AID said that will help the Hungarian government reduce energy subsidies and move domestic energy prices closer to world market levels.

Bulgaria chose EQE International, San Francisco, as a consultant for restructuring and upgrading its entire energy industry. EQE has a multiyear contract to upgrade oil and gas facilities, improve nuclear power plant safety practices, improve the performance of coal fired and other power plants, reduce environmental effects, and introduce western technology and management practices.

Mexico is getting a big assist for upstream operations.

U.S. Export-Import Bank approved four loan guarantees to support almost $1.3 billion in U.S. exports to Mexico's Petroleos Mexicanos. Four projects, all in the Bay of Campeche, include delineation of oil fields and development of Caan, Maloob, and Zaap oil fields. Pemex has not yet chosen the lenders or the U.S. suppliers. Included in the Eximbank guarantees is $235.3 million to help finance $269 million in U.S. drilling services, oil field services, and heavy marine construction for field delineation at several sites. The bank also will support $519.6 million in U.S. exports of oil field services and equipment for development of Caan oil field, $112.4 million in U.S. exports for development of Maloob, and $420.6 million in U.S. exports for Zaap development.

More opportunities are opening in the Soviet Union.

Turkmen S.S.R. asked for competitive cash bonus bids for development and production rights in the Livanov, Barinov, Gubkin, Lam, Zhdanov, and Prercheleken Kupol group of oil fields in the Apsheron trend of the Caspian Sea. Wavetech Geophysical Inc., Denver, which is helping with preparations for the bidding, reports the fields' combined reserves amount to more than 750 million bbl. Data packages will be available from Wavetech starting Oct. 14. Deadline for bid submissions in Moscow is Nov. 27.

Meantime, officials of Taiwan's Chinese Petroleum Corp. (CPC) and a Soviet delegation organized by the Yuganskneftegas Production Association ended a week of talks in Taipei. Heading the list of topics was a possible CPC role in development of Salyn oil field in Tyumen, western Siberia. CPC sent a mission to inspect the field last May and is evaluating data gathered during the visit.

CPC, which only weeks ago dropped out of a joint venture to build a refinery in Malaysia, now looks set to go ahead with an alternative project in that country. The company has asked Taiwan's Commission of National Corporations for permission to cooperate with Pacific Resources Investment Corp. and Malaysia's Petronas in a $1.23 billion (U.S.) refinery to be built at Bintulu. CPC plans to own a 45%, interest in the 150,000 b/d plant. It also plans to buy "significant holdings" in one or more oil fields in Southeast Asia.

Japan's MITI is braking that country's scramble to add ethylene capacity. It city concern about an impending domestic surplus of ethylene at the same time an ethylene building boom is under way in South Korea. Tosoh has delayed start-up of an ethylene plant at Yokkaichi 1 year to spring 1995, Tokyo business newspaper Nihon Keizai Shimbun reported. At the same time, competitor Maruzen plans to go ahead with a 600,000 ton/year plant at Ichihara. To be complete in second half of 1993, the 84 billion yen complex will also produce 360,000 tons/year of propylene.

The two companies settled a dispute over which project would be allowed to proceed when MITI signaled its intent to allow only one ethylene project before 1995. Under an agreement,

Maruzen will produce ethylene for Tosoh to partly make up for ethylene sales lost because of the project delay.

Kuwait is rounding up more firefighters.

In the latest action, Kuwait Oil Co. let contract to Kuwaiti British Group (KBG) for oil well firefighting and reconditioning in Sabriyah and Bahra fields in northern Kuwait. A joint venture of U.K. companies George Wimpey, Amec, and Taylor, Woodrow, KBG will subcontract the firefighting work to Neal

Adams Firefighters, Houston. Forty-eight of the 80 wells covered by the contract are ablaze. About 100 British personnel and 14 firefighters from the U.S. are expected to be involved. KBG declined to reveal the value of the contract, but British sources said it is worth about $80-100 million.

The U.S. Eximbank approved an agreement with the Kuwait Investment Authority setting up a framework for Eximbank to support as much as $2 billion in U.S. exports to Kuwait. The bank said, "Because this is the first borrowing agreement entered into by the government of Kuwait, it should give U.S. exporters a competitive edge in bidding on Kuwaiti contracts for reconstruction and other public sector projects."

Iroquois Gas Transmission System and two New York state agencies are negotiating in an effort to end their feud over environmental effects of construction along Iroquois' 370 mile pipeline project. Talks are taking place while Iroquois and the agencies await a final federal court ruling on an Iroquois request that the agencies be barred from further interference in the pipeline's construction.

A federal court in Syracuse, N.Y., denied without prejudice Iroquois' Sept. 12 request for an injunction to allow the agencies time to prepare a response. Iroquois' request followed by 1 week its response to the state Public Service Commission's show cause order in the matter of 11 violations that could cost Iroquois and contractors on Spread 3 more than $1.1 million. Iroquois said PSC lacks authority to impose the penalties (OGJ, Sept. 16, p. 42).

Wainoco Oil Corp. has come up with a two pronged response to droopy wellhead gas prices. Last week the Houston operator disclosed it will diversify into refining and pipelining and sell all of its remaining gas interests in the Appalachian basin. Wainoco agreed to pay about $50 million for privately owned Frontier Holdings Inc., which owns a 38,000 b/d refinery at Cheyenne, Wyo., and a 25,000 b/d interest in a crude oil pipeline from Guernsey, Wyo., to the plant. John B. Ashmun, Wainoco chairman, called the purchase "a timely downstream acquisition" in a period of low gas prices.

Wainoco also agreed to a $4 million sale of its interests in Athens gas field in Crawford County, Pa., to an undisclosed buyer. Wainoco's gas sale contract with Columbia Gas Transmission Corp. is among more than 4,100 rejected in Columbia's bankruptcy proceedings (OGJ, Sept. 2, p. 40).

In Washington:

The Senate approved 86-6 a U.S.-Soviet Union boundary treaty that affects oil and gas leasing in the Bering Sea. Under the treaty, both nations agreed that the line established in the 1867 Alaska Purchase is the maritime boundary and split a 21,000 sq nautical mile area that was under dispute.

FERC approved a final rule that streamlines the process for authorizing pipeline construction projects. The rule expands the use of prior notice and automatic construction authorizations and allows expedited permitting for projects meeting standards for supply and demand.

House leaders dropped a proposed 5/gal gasoline tax increase from a highway and mass transit bill. The tax had met with stiff opposition in the House last month. Instead, to fund programs in the highway bill, a provision will be inserted to extend half of last year's 5 addition to the gasoline tax for another 3 years. It was due to expire Sept. 30, 1995.