INDUSTRY BRIEFS

Environment

New Cure Inc., Los Angeles, let a $40 million contract to Foster Wheeler Environmental Corp. (FWEC), Clinton, N.J., for cleanup of Operating Industries Inc.'s landfill site 10 miles east of Los Angeles. New Cure is the entity created by parties principally responsible for cleaning up the Superfund site, including ARCO, Chevron, Exxon, Unocal, and Texaco. FWEC will provide project management, value engineering, and remedial construction. The closure design will include a gas collection system, landfill cap, and thermal destruction facility.

Exploration

Woodside Petroleum Pty. Ltd. found a large new deep gas reservoir on the North West Shelf off Western Australia with its 1A Lynx wildcat. Initial estimates are that the reservoir could contain as much as 10 tcf of gas. The find, near producing North Rankin and Goodwyn fields, could mean that Woodside is close to its goal of proving 35 tcf of gas reserves in the region. That is the volume needed to fulfill existing North West Shelf LNG contracts as well as extensions to those contracts and new contracts into early next century. Woodside is stepping up its exploration/appraisal drilling plans in the region, running two rigs there full time in 1997.

Tullow Oil plc, Dublin, reported test results from its 1 Sara West new pool wildcat on East Badin extension block in Pakistan. The well flowed 25 MMcfd of gas, but Tullow said gas quality is poor and the find noncommercial. However, the well confirmed a potentially large accumulation in a new type of play in an area where several undrilled structures exist and where the quality of gas is generally good. The rig has been moved into Sara commercial discovery nearby to drill Sara C appraisal well.

Lubes

Morris Lubricants Ltd., Shrewsbury, U.K., spent $450 million on new manufacturing plants and laboratories, to increase exports to Pacific Rim countries. Morris is the U.K.'s largest family-owned independent lubricants manufacturer.

Power marketing

Norway's Den norske stats oljeselskap AS (Statoil) is trying to gain entry into the Scandinavian electricity market, positioning itself as a Nordic energy company. Statoil said Denmark, Finland, Norway, and Sweden need to expand their combined generating capacity by 3-7 terawatt-hr each year for 10 years, to meet electricity demand without imports. Statoil sees Norwegian gas as the obvious fuel source and is part of a group planning to build two 350,000 kw gas-fired power plants in Norway to export power within Scandinavia.

Drilling-production

ARCO Alaska Inc. and Exxon Co. U.S.A. completed the 2 West Niakuk step-out on Alaska's North Slope near Prudhoe Bay and reported initial production rates of as much as 4,500 b/d of oil. The well was drilled to a measured depth of 21,405 ft with a bottomhole location 18,098 ft from the surface location. Evaluation of pressure data from 1 and 2 West Niakuk wells indicate the Niakuk formation extends beneath leases owned 50-50 by ARCO and Exxon and is larger than previously believed.

Carigali-Triton Operating Co. extended Suriya field to the southwest on Block A-18 in the Malaysia-Thailand Joint Development Area in the Gulf of Thailand. The 2 Suriya step-out flowed on test 56 MMcfd of gas and 268 b/d of condensate from four intervals at 3,616-6,838 ft through various choke sizes. The well was drilled in about 186 ft of water to TD of 8,315 ft. Carigali-Triton is owned 50-50 by units of Triton Energy Ltd., Dallas, and Malaysia's state owned Petronas.

Oryx Energy Co., Dallas, reported its first development well in Columbus B field in the U.K. North Sea flowed on test 10,000 b/d of crude. Drilled from the Ninian Southern platform, the well cut 77 net ft of pay in three zones. The test was conducted on 46 ft of upper Ness sands; remaining zones will be perforated and tested later. Two follow-up wells are slated for 1997. Gross reserves in the field are estimated at 10-15 million bbl.

EnerVest Management Co. LC, Houston, and partner GE Capital, Stamford, Conn., paid $70 million to Emerald San Juan Co. LP, Durango, Colo., for gas properties in the San Juan basin. The transaction includes interest in 48 wells with current production of 45 MMcfd. Enervest said the purchase enables it to establish an operating base in the San Juan basin, where it plans to expand. Including this purchase, Enervest and GE Capital have invested a total $200 million the last 20 months to acquire properties in 10 states.

Amerada Hess Ltd. extended the primary term of its contract with Transocean ASA, Tananger, Norway, for the semisubmersible rig Transocean 8. The extension covers the period from Nov. 3, 1996, for 5 months prior to the rig going into a shipyard for upgrading. Amerada Hess earlier hired the rig for a 2 year term starting around May 1, 1997, with three 1 year extension options. The agreement includes a $45.5 million upgrade of the rig to allow all-season deepwater drilling in the U.K. West of Shetland area.

Exxon Corp. affiliate Exxon Neftegas Ltd. began drilling an appraisal well in Arkutun-Dagi field in the Sea of Okhotsk off Sakhalin Island with Russian equipment and personnel. The well, about 12 miles offshore, is in about 100 ft of water and will be drilled to about 8,200 ft with the Rosneft-Sakhalinmorneftegas (SMNG) Okha jack up. SMNG also will supply three workboats and a ship to be used as a floating warehouse to support the drilling effort.

Petro-Canada agreed to exchange some of its Saskatchewan heavy oil properties area with PanCanadian Petroleum Ltd., Calgary, for certain natural gas properties in Southwest Alberta plus $22.4 million (Canadian) cash. Petro-Canada will add about 13 MMcfd of natural gas production by acquiring interests in Benjamin Creek and Limestone fields. In exchange, PanCanadian will receive all of Petro-Canada's heavy oil interests in the Golden Lake area of west central Saskatchewan, where current production is about 2,260 b/d.

Amoco Norway Oil Co. acquired from Norske Conoco AS a 10% interest in Ula field and 9.375% in Gyda field plus 10% in the PL164 license covering nearby Blocks 2/1, 7/12, and 8/10. In return Conoco received an undisclosed amount of cash plus a 20% interest in PL011 license, which covers Blocks 1/3 and 1/6. Amoco retained a 30% share in the Norske Shell AS operated PL011 license, where the partners plan to drill a wildcat this year.

Texaco Ltd. and Amerada Hess Ltd. let a development concept screening study to Offshore Design Engineering Ltd. (ODE), London. ODE said the study will provide capital and operating expenditure estimates for a variety of oil and gas development types, in 400-1,200 m of water and at various production rates. The data are intended to help in any potential development in Britain's western waters.

Oilsands

A Jerez Energy International Inc., Calgary, unit signed a memorandum of understanding to develop a bitumen property in Nigeria. Jerez Energy (Barbados) Inc. made the deal with Tar Sands Mining International Ltd., Lagos. Jerez said the Alberta Research Council will assist in technical development.

Suncor Inc., Calgary, placed a new $190 million (Canadian) sulfur dioxide reduction plant on stream at its Fort McMurray oilsands complex in northern Alberta. The technology, designed by Chiyoda Corp., Tokyo, will capture 95% of sulfur dioxide emissions by mixing sulfur with limestone and oxygen to produce inert gypsum. The company also plans to hold carbon dioxide emissions at a 1990 level despite planned oil production increases to 105,000 b/d by 2001 from a current 78,000 b/d.

Companies

Spain's Repsol SA wants to buy a 10% stake in YPF SA from the Argentine government for about $750 million. The investment is part of Repsol's plan to pump $2 billion into oil and gas projects in Argentina and elsewhere in Latin America the next 5 years. The government's remaining 20% interest in the former state oil company is slated for sale early next year.

Parker Drilling Co., Tulsa, agreed to acquire Mallard Bay Drilling Inc., Iberia, La., from Houston's Energy Ventures Inc., for $338 million in cash and stock. Mallard Bay owns 47 rigs. Most are barge and platform rigs that operate primarily in the U.S. Gulf Coast region. Mallard Bay also operates barge rigs in Nigeria, platform rigs in Peru, and land rigs in Argentina. The deal is close before Dec. 31, when Parker completes financing.

Morgan Hydrocarbons Inc. agreed to acquire Stampeder Exploration Ltd. in a stock and cash deal valued at about $500 million (Canadian). The Calgary companies have many adjacent operating areas in Saskatchewan and North Alberta, with combined current production of about 38,000 b/d of oil equivalent.

Poco Petroleums Ltd., Calgary, offered $225 million (Canadian) to acquire Gardiner Oil and Gas Ltd. Poco has a sales agreement with 73% of Gardiner owners and needs 90% to complete the acquisition. Poco is offering $5 cash and 0.6 common share for each Gardiner share.

Ethyl Corp. and its Canadian unit filed a $200 million lawsuit against Ottawa, charging that proposed Canadian federal legislation banning use of the gasoline additive MMT would amount to expropriation of Ethyl's business in Canada. The companies seek compensation under the North American Free Trade Agreement. A spokesman for federal Environment Minister Sergio Marchi said the government has no intention of shelving the legislation. It is scheduled to come before Parliament for a third, final reading this year.

Morrison Petroleum Ltd. and Morrison Middlefield Resources Ltd. will pay $87 million for equal interests in Resman Oil and Gas. Resman has production of about 3,000 b/d and 10 MMcfd of natural gas. It also has proven and probable reserves of 10.5 million bbl and 32 bcf of gas. All three are Calgary firms.

LNG

Qatar Liquefied Gas Co. let a $130 million contract to McDermott-ETPM East Inc., Dubai, for offshore work related to North gas field development in support of adding a third train to its Ras Laffan liquefied natural gas export project. The contract includes detailed design, procurement, construction, installation, hookup and commissioning of a processing platform, a wellhead topsides, associated bridging, and subsea cables. The first two of three 2 million metric ton/year trains are slated to start up in October, the third in 1998.

Pipelines

Canada's federal and Nova Scotia governments appointed a five-member panel to review the Sable Island natural gas pipeline to the U.S. Northeast and related field development off Nova Scotia (OGJ, Sept. 16, p. 30). The panel will include three independent specialists and two members of the National Energy Board. Mobil Oil Canada Ltd. and Westcoast Energy Inc., lead partners in the combined $3 billion (Canadian) project, are expected to make a final decision to proceed in fourth quarter 1997. No date has been set for public hearings, and a regulatory decision is not expected before mid-1997.

Beltrans, the Belarus state-owned pipeline company, will begin laying its section of the Yamal-western Europe gas pipeline this month. The 209 km Belarus section will link the compressor station at Nesvih in the Minsk region with the village of Kondratki on the Polish border. Construction was originally to begin last year but was delayed due to lack of capital. Talks are still under way between project sponsor Gazprom and various financial institutions to complete financing.

El Paso Natural Gas Co. completed repairs on its 30 in. main line about 30 miles north of Roswell, N.M., following a Sept. 11 rupture (OGJ, Sept. 16, p. 26). About 550 MMcfd capacity previously taken out of service on the 3.3 bcfd capacity pipeline was restored.

USX-Delhi Group, Dallas, marked progress on the second phase of its East Texas Cotton Valley Pinnacle reef gas gathering expansion program, adding 100 MMcfd of incremental gas gathering and treating capacity. The project included construction of 48 miles of 20 in. pipeline, installation of 4,000 hp of compression, and expansion in inlet capacity at Delhi's Aker treating plant. When the second phase is complete, the expansion will have added 275 MMcfd of capacity.

Gas marketing

Westcoast Energy Inc., Vancouver, B.C., and Coastal Corp., Houston, confirmed a merger of their gas marketing units (OGJ, Sept. 16, p. 16). The merger will create North America's fourth largest gas marketer with combined sales of about 7 bcfd. Westcoast will pay Coastal as much as $60 million as part of the deal.

Petrochemicals

Chevron Chemical Co., Houston, will spend $200 million to double paraxylene capacity at the Chevron Corp. refinery at Pascagoula, Miss., to a little more than 1 billion lb/year from 500 million lb/year. Construction is slated to begin during the fourth quarter of this year, pending receipt of all permits, and finish during the second quarter of 1998.

Saudi Yanbu Petrochemical Co. (Yanpet), a 50-50 venture of Saudi Basic Industries Corp. and Mobil Yanbu Petrochemical Co. Inc., let contract to ABB Lummus Global, Clinton, N.J., for technology and basic engineering of a 760,000 metric ton/year ethylene plant as part of a major expansion at Yanpet's Yanbu complex. The new plant will feature Lummus' advanced SRT cracking heaters and low pressure demethanizer recovery. Feedstock will be ethane, propane, and light naphtha. Construction will begin in 1997 with start-up scheduled for 2000.