PETROCHEMICALS
TERRA INDUSTRIES INC., Sioux City, Iowa, plans to coproduce methanol and ammonia at its Woodward, Okla., nitrogen fertilizer plant. Terra will license technology from Haldor-Topsoe Inc. as part of the process. The $15.5 million project is to be complete in first quarter 1994 and is to have capacity to produce 400 metric tons/day of methanol. The project includes new storage capacity, and Terra will consider investor partnerships or supply arrangements with methyl tertiary butyl ether producers.
COLUMBIAN CHEMICALS CO., a unit of Phelps Dodge Corp., Phoenix, and Hungary's Tiszai Vegyi Kombinat RT (TVK) formed a joint venture company, Columbian Tiszai Carbon Ltd., to construct a $55 million, 50,000 metric ton/year carbon black plant at Tiszaujvaros, Hungary. The plant is to be complete by second half 1993. Columbian Chemicals will own 60% of the joint venture and TVK the remainder. The project is the first cofinancing between Overseas Private Investment Corp. and European Bank for Reconstruction and Development.
DRILLING-PRODUCTION
ELF PETROLAND BV and partners began development of gas fields on Blocks K4b aid K5a in the Dutch North Sea. First phase includes installation of a central complex including a processing platform with design capacity of 254 MMcfd, a wellhead riser platform, and one satellite. Production start-up is planned for October 1994. Gas will be transported to Den Helder.
APACHE CORP., Houston, closed a $67 million purchase of Shell Offshore Inc.'s 92.6% interest in Matagorda Island Blocks 681 and 682 in the Gulf of Mexico, where Apache and a drilling partnership already held the other 7.4% (OGJ, Nov. 16, p. 31). In the deal--effective last July 1--Apache acquired properties producing 60 MMcfd of gas, drilling and recompletion opportunities on about 11,500 net acres, and 14 miles of gathering pipeline.
PRIDE PETROLEUM SERVICES INC., Houston, is shipping a rig to Russia, with operations to begin as soon as it arrives in western Siberia. The rig is contracted to Siberian Sperry-Sun, which has been operating in the area for 2 years (OGJ, Sept. 21, p. 56). The rig will be used on an initial 11 well horizontal reentry drilling project.
INTERNAL REVENUE SERVICE issued final rules detailing producers' costs that are eligible for the enhanced oil recovery tax credit. The rules, published in the Nov. 23 Federal Register, limit the definition of what constitutes a significant expansion of an existing EOR project, which would be eligible for the credit.
REFINING
PETROLEOS MEXICANOS let a $40 million contract to Badger Co. and Mexico's Desarrolo de Ingenieria SA to construct an isomerization unit at Pemex's La Cangrejera refinery near Vera Cruz, Mexico. Badger and Servicios de Procesos Idustriales SA will provide engineering, procurement, and start-up services. The unit is to be complete in mid-1994.
INDONESIA approved a proposal by British Petroleum Asia Pacific and C. Itoh to construct a $600 million, 120,000 b/d export refinery on Bintan Island in Riau Province. Jakarta Post reported it is the second totally foreign owned project to be approved. Originally BP and C. Itoh planned a $1.6 billion plant under a joint venture with state owned Pertamina (OGJ, Mar. 18, 1991, p. 50).
INDIAN REFINING LP, a unit of Castle Energy Corp., Blue Bell, Pa., plans to spend about $57 million on projects at its 67,000 b/d Lawrenceville, Ill., refinery. Plans include increasing capacity to 85,000 b/d-facilitating the refinery's ability to process condensate delivered by Salmon Resources Ltd., complying with Clean Air Act guidelines for ultra low sulfur diesel fuel and reformulated gasolines, and increasing the plant's capability to run sour crudes.
GAS PROCESSING
PARKER & PARSLEY PETROLEUM CO. completed purchase of a 20% interest in the Midkiff and Benedum gas processing plants in the West Texas Permian basin operated by Western Gas Resources Inc., Denver, for $22 million (OGJ, Nov. 2, p. 42). The plants process gas from Spraberry trend fields. Parker said the deal will enable it to capture more of the value associated with the expected increase in gas production from the more than 600 development wells it plans to drill the next 3 years.
U.S. DISTRICT COURT in Tarrant County, Tex., ruled that $45 million is the purchase price Union Pacific Resources Co. (UPRC), Fort Worth, and other owners must pay to exercise their preferential right to buy Parker & Parsley's 36% interest in the Carthage gas processing plant in East Texas. As of Oct. 31, 1992, the plant had a net book value of $31 million. If UPRC and other owners decide to purchase the interest, Parker & Parsley expects to receive $32-35 million, based on an Aug. 31, 1990, effective date and adjustments for interest and revenues. Parker & Parsley may appeal the court's ruling that preferential right to purchase was triggered by a June 29, 1990, exchange agreement.
COMPANIES
ENSERCH CORP., Dallas, approved a capital spending budget for 1993 of $180 million compared with estimated spending of $141 million in 1992. Exploration and production spending is budgeted at about $92 million, an increase of 45% from 1992. Spending for the natural gas transmission and distribution segment in 1993 is estimated at $82 million compared with about $74 million in 1992.
CONCORP INTERNATIONAL LTD., Khartoum, Sudan, completed the purchase of Transocean Chevron Co.'s shares of Chevron Oil Co. of Sudan for an undisclosed price, giving Concorp all petroleum exploration and production rights in the 42 million acres concession that includes Belut and Muglad exploration blocks (OGJ, June 22, p. 41).
TOTAL CANADA OIL & GAS LTD., Calgary, plans to buy Total Energold Corp., a unit of Total Resources (Canada) Ltd., for about $10.3 million (Canadian). Total Canada and Total Resources are units of France's Total. Total Canada said Total Energold and units have substantial unused capital losses and other tax credits, and the acquisition will allow it to defer an estimated $21 million in income taxes the next 4 years.
ALTERNATE FUELS
OGDEN CORP., New York, and its Ogden Projects Inc. unit agreed to buy the U.S. waste to energy business of Asea Brown Boveri Inc. (ABB), Stamford, Conn., including rights in a 3,300 metric ton/day plant in Detroit, a 2,160 ton/day plant in Honolulu, and a 2,000 ton/day plant in Hartford, Conn. Each plant uses refuse derived fuel technology to convert municipal solid waste to energy. Terms of the deal, to close by yearend, are undisclosed.
OILSANDS
HUSKY OIL LTD., Calgary, Nov ' 20 commissioned a heavy oil upgrader at Lloydminster on the Alberta-Saskatchewan border. Husky is operator of the $1.6 billion (Canadian) project, which has run into cost overruns (OGJ, Aug. 24, Newsletter). Other participants include the federal, Alberta, and Saskatchewan governments.
TRANSPORTATION
STATE OIL CO. OF AZERBAIJAN REPUBLIC (Socar) signed feasibility study agreements Nov. 9 with British Petroleum plc, Den norske stats oljeselskap AS, Amoco Corp., Pennzoil Corp., and Turkish state pipeline company Botas for a common offshore and export pipeline for Caspian Sea fields. BP and Statoil plan to develop Chirag field (OGJ, Oct. 19, p. 25), Amoco is studying Azeri field development (OGJ, Oct. 19, p. 25), and Pennzoil plans to develop Guneshli field (OGJ, Oct. 19, p. 46). Socar said joint infrastructure investment could exceed $3 billion.
GAZ DE FRANCE and Ste. Quebecoise d'Initiatives Petrolieres (Soquip) plan to develop an underground natural gas storage facility at Saint Flavien, Que., at an estimated cost of $40 million (Canadian). Soquip has operated Saint Flavien gas field since 1980. While not yet depleted, studies show it could provide storage for as much as 5 bcf of gas. The project will be operated by Optigaz, owned by GDF and Soquip, and Quebec's gas distribution utility Gaz Metropolitain Inc. committed to use all available stored gas under a 15 year contract. Storage is to be available in winter 1995-96.
TRANSCANADA PIPELINES LTD. let a $50 million (Canadian) contract to O.J. Pipelines, Calgary, for a 33 mile pipeline expansion. O.J. Pipelines is a division of Lynx Energy Services Inc., a unit of Ocelot Energy Inc., Calgary. The Ocelot units now have a total $90 million in work this winter for expansion of the TransCanada gas pipeline system.
MOSS BLUFF GAS STORAGE partners Tejas Power Corp. and Phibro Energy Inc., both of Houston, lined up $25 million of project financing with Banque Indosuez offices in Houston and New York for second phase expansion of the Liberty County, Tex., salt dome storage facility. Plans include an interconnect with Natural Gas Pipe Line Co. of America's interstate system and creation of a second storage cavern, which by mid-1994 would increase Moss Bluff working storage capacity to about 5.55 bcf and withdrawal capacity to 300 MMcfd.
EL PASO NATURAL GAS CO. (EPG) formed a marketing subsidiary to conduct all new marketing business within the company and act as EPG's agent as it phases out merchant services. El Paso Gas Marketing Co. (EPGM)-which began operating Nov. 1, 1992, mostly in the southwestern U.S.-offers customized purchases and sales and scheduling and nomination services designed to meet increasing diversity of U.S. interstate gas markets resulting from implementation of the Federal Energy Regulatory Commission's Orders 636 and 636a.
ENVIRONMENT
DEPARTMENT OF JUSTICE reached a settlement with Pennzoil Exploration and Production Go. and Quaker State Corp. resolving allegations they discharged oil field brine into northwestern Pennsylvania streams. Pennzoil will pay fines of $1.15 million and Quaker State $447,694.
A VIRGINIA TASK FORCE investigating a 200,000 gal Fairfax City, Va., tank farm leak recommended the state assembly pass laws giving local governments more power to regulate tank farms to require older facilities to install modern equipment. The task force also urged the Fairfax City tank farm, at a Colonial Pipeline Co. terminus, be relocated at an estimated cost of $200 million.
BAROID DRILLING FLUIDS INC. and Environmental Planning Group Inc., Chicago, opened an environmental action training center near Houston's Intercontinental Airport with onsite housing for up to 120 students. Training center infrastructure includes fully equipped classrooms, video and graphic production facilities, and field demonstration areas. Beginning in 1993, the center will offer courses and programs about international environmental project management, health and safety, law and policy, sampling, and remediation.
EXPLORATION
COLUMBIA GAS DEVELOPMENT CORP., Houston, 10-1 Kane Springs Federal wildcat in Grand County, Utah, flowed at a rate of 1,325 b/d of oil and 879 Mcfd of gas through a 10/64 in. choke with 4,390 psi flowing tubing pressure from the Cane Creek zone of Pennsylvanian Paradox. The well was drilled horizontally to a measured depth of 9,080 ft, a true vertical depth of 8,110 ft.
UNION TEXAS PAKISTAN INC. tested two wildcats drilled to Cretaceous lower Goru on its Badin block about 160 km from Karachi in southeastern Pakistan. The 1 Mahi flowed 17.3 MMcfd of gas and 151 b/d of condensate through a 1 in. choke with 814 psi flowing tubing pressure at 4,253-63 ft, and 2 Bari flowed 2,122 b/d of 42.3 gravity oil through a 48/64 in. choke with 191 psi flowing tubing pressure from 2,615-20 ft. Operator UT Pakistan and Occidental Petroleum (Pakistan) Inc. each owns 30% interest in the project and Pakistan's Oil & Gas Development Corp. 40%.
FRONTIER RESOURCES INTERNATIONAL INC., Houston, agreed to farm out to Mobil North Sea Ltd. an interest to be negotiated in option Blocks 49/22, 49/23, 49/24, 49/25, and 49/27 in the North Celtic Sea off Ireland, if Mobil drills an exploratory well on the acreage at no cost to Frontier. Mobil has acquired 320 line km of seismic data on the tracts and could conduct an additional seismic survey in early 1993. The decision to drill and Mobil's share of interest will be based on potential reserves indicated by seismic data.
ACQUISITIONS
ENERPLUS GROUP, Calgary, purchased the Canadian oil and gas operations of Pacific Enterprises for $50.5 million (Canadian). The sale of Pacific Enterprises Oil Co. (Canada) included proved oil and gas reserves of about 10 million bbl of oil equivalent and 400,000 net leasehold acres mainly in Alberta.
SAMSON INVESTMENT CO., Tulsa, plans to acquire and merge with Geodyne Resources Inc., also of Tulsa, in a deal valued at more than $20 million. Samson will pay $1 .22/share for outstanding Geodyne common stock. PaineWebber Capital Inc. holds 49.95% of Geodyne's stock and agreed to vote its shares in favor of the merger if a majority of public stockholders approve.
CABRE EXPLORATION LTD., Calgary, signed an initial agreement for a $19 million (Canadian) takeover of Polaris Petroleums Ltd., also of Calgary. A letter of intent approved by both firms calls for the deal to close in January, subject to approvals from shareholders, regulators, and an Alberta court. Cabre said the acquisition would give it additional natural gas reserves of 50 bcf and 1.2 million bbl of crude.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
