REFINING
AMOCO OIL CO. expects about 86% of the employees affected by the closing of its Casper, Wyo., refinery (OGJ, Oct. 21, 1991, p. 41) will stay with the company. The remaining 30 employees chose early retirement or severance benefits. Those staying will transfer to other company plants, mainly in Texas City, Tex., and Whiting, Ind. Eleven employees will remain at the Casper site to aid shutdown and remediation.
CHINESE PETROLEUM CORP. (CPC) started up Taiwan's first fluid catalytic cracking unit for residual oil. The unit, at CPC's Ta-Lin-Pu refinery in Kaohsiung, is based on M.W. Kellogg Co. technology.
PETROCHEMICALS
BANGLADESH'S largest fertilizer plant began production late last month with capacity to produce 1,700 tons/day of granulated urea. The product will be sold for $108/ton, almost half the market price. Construction began late in 1988. The project cost more than $297 million, of which $251 million was covered by financial aid from Japan.
SAUDI BASIC INDUSTRIES CORP. (Sabic) affiliate National Plastic Co. (Ibn Hayyan) completed its 100,000 metric ton/year polyvinyl chloride expansion project, boosting capacity to 300,000 tons/year (OGJ, Jan. 7, 1991, p. 22). The Ibn Hayyan plant also produces 300,000 tons/year of vinyl chloride monomer feedstock. The added capacity will enable Sabic to introduce injection molding PVC grade for making bottles for potable water and will permit development of specialty resins.
DOW CHEMICAL CO. started up a 450,000 metric ton/year ethyl-benzene plant at Terneuzen, Netherlands, using Mobil/Badger technology. Design, engineering, and procurement was carried out by Badger Co. Inc. The design uses a dilute ethylene stream as feed to the ethyl-benzene unit, which reduces debottlenecking costs in the ethylene unit.
OCELOT INDUSTRIES LTD., Calgary, closed the first part of a $51.6 million (Canadian) purchase of methanol interests from Metallgesellschaft Corp. (MG) involving a sales and purchase contract with Tenneco Methanol and a two-thirds interest in OMG Methanol Co., the top merchant marketer of methanol in the U.S. (OGJ, Oct. 14, 1991, p. 40). The second part of the purchase, involving MG's 10% interest in a 1,500 ton/day methanol plant under construction in Trinidad, is expected to close early this year.
COGENERATION
DESTEC ENERGY INC., Houston, completed financing for a $67 million cogeneration plant near Bakersfield, Calif. The Live Oak project will provide as much as 48,000 kw of electricity to Pacific Gas & Electric Co. under a firm 20 year contract and as much as 45,000 lb/hr of steam to Texaco Inc. for use in enhanced oil recovery operations. Construction is under way, aiming for start-up in 1992.
EXPLORATION
JAPAN PETROLEUM EXPLORATION CO. (Japex) was awarded a 3,670 sq km exploration and development concession southwest of Kompong Som Port in the Gulf of Siam by Cambodia's government. Japex will conduct seismic surveys and drill two wells. Estimated cost is $80 million, of which 80% will be covered by Japan National Oil Corp. Kyodo News Service reported a new company, Cambodia Oil Development Co., including Nissho Iwai Corp., will be formed for the work.
AMERICAN INTERNATIONAL PETROLEUM CORP. (AIP), New York, received a concession in Colombia, making it the country's fourth biggest concession holder. State owned Empresa Colombiana de Petroleos granted AIP the 194,345 acre Lagunillas concession in the Middle Magdalena Valley. The 6 year contract includes seismic reprocessing, new seismic surveys, one well in the first year, and no more than two wells/year thereafter.
COMPANIES
AMERICAN INTERNATIONAL GROUP INC. (AIG), New York, will receive about $184.8 million from Peru's government under an agreement in principle to settle the Belco Petroleum Corp. expropriation case (OGJ, Nov. 26, 1990, p. 23). AIG will receive $40 million when a definitive agreement is signed, with the balance due in seven yearly installments. Enron Corp., owner of Belco when Peru nationalized the company, will receive about $30 million of the settlement.
WASHINGTON ENERGY RESOURCES CO., Seattle, agreed to manage the oil, gas, and mineral acreage of Hanson Natural Resources Co.'s Cavenham Energy Resources division. The acreage, in Louisiana, Mississippi, Oregon, and Washington, covers about 1.3 million acres. The deal includes some nonoperated working interests and a geological and seismic database covering the acreage. The 3 year agreement requires Washington Energy to negotiate for more activity on the leases.
NOVA CORP., Alberta, expects a loss of $940-950 million (Canadian) for 1991, largely because of depressed prices for chemicals and heavy oil, after asset writedowns totaling $675 million (OGJ, Dec. 23, 1991, Newsletter). That includes a $435 million writedown on the value of Nova's Polysar Energy & Chemical Corp., Sarnia, Ont., which it acquired in 1988 for $2.4 billion.
MARIGOLD LAND CO. purchased the Caballo Rojo surface coal mine in Wyoming from Mobil Corp. for an undisclosed price. The mine, which produced about 9 million tons of low sulfur coal in 1990, is the 15th largest mine in the U.S. The deal marks Mobil's exit from the coal mining business.
ULTRAMAR CANADA LTD.'S eastern Canada assets will be sold as a result of the takeover of the British parent company by Lasmo plc (OGJ, Dec. 23, 1991, Newsletter). The assets include a refinery at St. Romuald near Quebec City and 1,540 service stations in eastern Canada, which will be sold as one unit. Lasmo said there will be no changes to the Canadian operation which employs 1,749.
PENNZOIL CO. will adopt Financial Accounting Standard 106 retroactive to Jan. 1, 1991. The new standard requires costs of providing postretirement benefits other than pensions to be accrued during the employee's career. Pennzoil expects the one time cumulative effect will reduce 1991 net income by about $49 million. The standard is expected to increase Pennzoil's postretirement life insurance and medical coverage expense by about $2.5 million.
EXPORTS-IMPORTS
POLAND will export to Russia coke, sulfur, and other items valued at $900 million in 1992 under a bilateral trade protocol. The plan includes exports of food to Russia valued at $500 million (OGJ, Oct. 7, 1991, Newsletter). In exchange Russia will provide Poland 100,000 b/d of oil and about 775 Mcfd of natural gas.
AN OIL DISCOVERY below 13,123 ft in the former Soviet Turkemia republic in the foothills of the Kopet-Dag mountains near the Turkmenia/Iran border will earn needed hard currency via oil exports to Switzerland. Export proceeds will be used to build petrochemical and gas processing plants in the Achak area. Moscow press reports said other oil and gas finds have been made there in recent months.
CANADA'S National Energy Board authorized Poco Petroleums Ltd., Calgary, to export about 15 MMcfd of natural gas at Huntingdon, B.C., for use by Washington Natural Gas Co. serving Pugent Sound, Wash. NEB also authorized Poco to export about 20 MMcfd of gas at Huntingdon to be sold to IGI Resources Inc., which will resell the gas to local distributors Intermountain Gas Co. and C.P. National Corp. Intermountain serves southern Idaho, and C.P. serves Oregon, California, and Nevada.
DRILLING-PRODUCTION
WALTER INTERNATIONAL began production from one well Alba field off Equatorial Guinea at a rate of 20 MMcfd of gas and 1,200 b/d of condensate from 430 ft of pay in multiple sands (OGJ, May 27, 1990, p. 26). More drilling on the 500,000 gross acre production sharing contract area is planned this year, aimed at doubling production. Condensate will be stored on Bioco Island until there is enough to warrant tanker transport to market. Samedan of North Africa, a unit of Noble Affiliates Inc., Ardmore, Okla., owns a 40% interest, which will convert to 30% after payout.
ORANJE-NASSAU ENERGIE PARTICIPATIE MIJ. and Dyas, Hague, jointly purchased Pacific Enterprises Oil Co. (Netherlands), from parent Pacific Enterprises, which includes Pacific Enterprises' oil and gas interests in the Dutch North Sea. Pacific Enterprises will record a pretax gain of $21 million on the sale. Proceeds will be used to reduce debt. Assets include Pacific's 21% interest in the 104,000 acre Block P/15, site of Rijn oil field and six consecutive natural discoveries through 1991.
AZER-PETOIL, a 50-50 joint venture of Azerbaijan's state oil company Azerneft and Turkey's Petoil, completed drilling its first well in an enhanced oil recovery project near Baku. The joint venture is working in Kazanbulak and Terter fields which cover about 3,150 sq km. The fields were abandoned in the 1950s as uneconomic, but estimates of productive capacity are 3,000-5,000 b/d.
PRIMEENERGY CORP., Stamford, Conn., bought interests in more than 200 oil and gas wells and related equipment from Global Natural Resources Corp. of Nevada, Houston, for $2.135 million (OGJ, Dec. 2, 1991, p. 30). The wells are in Dimmit and Maverick counties, Southwest Texas, on the 39,000 acre San Pedro Ranch. PrimeEnergy has the right to drill more wells on the acreage.
SONAT EXPLORATION CO. exchanged its 25% interest in two offshore oil and gas fields operated by Chevron U.S.A. Inc. for all of Chevron's oil and gas leases in Arkansas. Sonat estimates it gained about 45 bcf of natural gas equivalent proved reserves.
ABRAXAS PETROLEUM CORP., San Antonio, bought interests in 29 producing oil and gas wells in five fields in the Texas Gulf Coast area and Alabama from Nuevo Energy Co., Houston, for $2.275 million (OGJ, Nov. 18, 1991, p. 48). The wells have estimated net proved reserves of 303,000 bbl of oil and 1.53 bcf of gas, increasing Abraxas' net proved oil reserves by about 68% and gas reserves by about 57%.
PIPELINES
TEXACO TRADING & TRANSPORTATION INC. reopened its pipeline between Bonanza, Utah, and Landmark Petroleum Inc.'s 15,200 b/cd Fruita, Colo., refinery and will use it to transport as much as 12,000 b/d of crude. The pipeline, originally used to transport gilsonite slurry, has been idle since 1985.
NOVA CORP. adjusted rates of return for its Alberta Gas Transmission (AGT) division. Effective Jan. 1, AGT's ROR on rate base falls to 11.62% from 11.78%, ROR on common equity slips to 13.5% from 13.75%, and deemed common equity rises to 35% from 32%. The adjustments reflect reductions in cost of capital to finance the gas pipeline system.
THAI PETROLEUM PIPELINE CO. LTD. (TPPC) let a $12 million contract to John Brown Engineers & Constructors Ltd. for detailed engineering and procurement of its 145 mile products pipeline from Sriracha to Saraburi and related facilities (OGJ, Aug. 26, 1991, p. 40). TPPC is a joint venture of Petroleum Authority of Thailand, Bangkok Aviation Fuel Service, and units of British Petroleum Co. plc, Caltex, Exxon Corp., Kuwait National Petroleum Corp., Mobil Oil Corp., and Royal Dutch/Shell Group.
SANTA FE PACIFIC PIPELINE PARTNERS LP filed a general rate increase of 9% on all California intrastate movements with the California Public Utilities Commission. The company also filed a 9% rate increase with the Federal Energy Regulatory Commission for interstate deliveries to Calnev Pipeline at Colton, Calif. The CPUC increase is to become effective during first half 1992, and the FERC increase is to be effective on Jan. 20, 1992.
TRANS MOUNTAIN PIPE LINE CO. LTD., Vancouver, B.C., let contract to Dames & Moore, Los Angeles, to prepare an environmental assessment and federal and state permit applications for its proposed $550 million Low Point crude pipeline project in Northwest Washington (OGJ, Aug. 19, 1991, p. 32). The project consists of a marine terminal and storage facilities and a 36 in. pipeline for crude shipments from Alaska and other sources to refineries in northern Pugent Sound.
ACQUISITIONS
LI KA-SHING and associates completed the purchase of 43% equity interest in Husky Oil Ltd., Caglary, from parent Nova Corp. (OGJ, Dec. 9, 1991, p. 45). Husky will remain a private company, held by Hong Kong companies Hutchinson Whampoa Ltd. and Cavendish International Holdings Ltd. jointly with 49% interest, Li Ka-shing and family 46%, and Canadian Imperial Bank of Commerce 5%.
GAS PROCESSING
VENEZUELA'S Corpoven let a $193.4 million contract to Technip, Paris, in association with Venezuela's Inelectra and DIT-Harris SA, for a 400 MMcfd cryogenic gas separation plant at Santa Barbara, Monaga state. The contract includes debottlenecking a natural gas liquids plant at Jose, Anzoategui state, to increase capacity to 100,000 b/d from 70,000 b/d, new storage facilities, and a pipeline monitoring-management system.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
