INDUSTRY BRIEFS

Exploration

Elf Exploration Angola extended its contract for the Jim Cunningham semisubmersible drilling rig owned by Reading & Bates Corp., Houston, for deepwater exploratory drilling off Angola. The Elf program now calls for six firm wells in about 18 months, followed by another 18 months of firmly committed work, increasing the total contract value to about $117 million (OGJ, Feb. 26, p. 32). After an upgrade to 1,400 m water depth capacity, the rig will move to Angola by October.

Petronas Carigali Overseas Sdn. Bhd., a unit of Malaysia's state oil company, acquired a 37.5% interest in British Gas plc's (BG) Gambat block in Pakistan. Operator BG will retain a 57.5% interest, and Pakistan's government will hold 5%. The block covers 6,600 sq km of the central Indus basin in Sindh province. BG began acquiring seismic data on the block early in June and plans to drill its first wildcat there in first quarter 1997.

Safety

BHP Petroleum Pty. Ltd. accepted conclusions of a government review that criticized safety on the Griffin Venture production, storage, and offloading vessel operating in Griffin oil field off Western Australia. BHP responded that it will improve remedial work, currently under way. This will require several shutdowns during the next 6 months. The company has cut Griffin production by 20% to ease the load on people and equipment and plans to modify gas compressors and upgrade gas turbines on the ship.

Spills

Milford Haven Port Authority conducted a tribunal that leveled a charge of incompetence against the pilot of the Sea Empress oil tanker, grounded outside Milford Haven harbor last February. The tanker was beached while entering the harbor mouth and during a bungled salvage operation spilled 70,000 metric tons of oil into the sea (OGJ, Feb. 26, p. 34). Pilot John Pearn had his license downgraded to piloting vessels of as much as 90,000 metric tons from 150,000 tons.

Oil Stop Inc., a unit of Superior Energy Services Inc., Belle Chasse, La., agreed to provide oil boom systems to all U.S. Coast Guard strike teams. Oil Stop's Fast Sweep oil booms are designed to contain oil spills in 8 ft seas and 20 knot winds and are expected to double Coast Guard skimming system capacity. Oil Stop will ship $900,000 of the systems the next 90 days with options for additional systems valued at $1.6 million.

Storage

Finland's Neste Oy will build a products storage terminal at Riga, Latvia, alongside a similar terminal under construction by Norway's Den norske stats oljeselskap AS (Statoil). Neste's terminal, to cost $17 million, is to be complete by yearend 1997. The terminal will be able to store 207,000 bbl of refined products and is expected to handle throughput of 2.6-3.6 million bbl/year. It will serve mainly Neste retail outlets in Latvia, Lithuania, and Belarus.

LNG

Ras Laffan LNG Co., Qatar, through a venture of main contractors JGC Corp. and M.W. Kellogg, hired Foxboro Co., Foxboro, Mass., to implement an integrated process control, safety, and business information system for Qatar's second of three liquefied natural gas plants tied to development of North field offshore gas development. Foxboro says the contract is the first of its kind for a grassroots LNG plant. Qatar Liquefied Gas Co., the first LNG project linked with North development, is slated for start-up in October, said Foxboro, which is Qatargas' primary instrument vendor.

Statoil and Linde AG, Hoellriegelskreuth, Germany, are to collaborate in improving technology for natural gas liquefaction. Statoil said the partners will try to find more cost effective technology and operating methods for LNG production, storage, shipment, and regasification.

Abu Dhabi National Oil Co. took delivery of a second 135,000 cu m capacity LNG carrier from Kvaerner Masa-Yards Inc., Helsinki, for use in its Das Island LNG export project. The first carrier, part of an April 1993 order for four such vessels, was delivered last January (OGJ, Jan. 15, p. 22).

Petrochemicals

Chevron Chemical Co. obtained a license for BP Chemicals Ltd.'s Innovene polyethylene (PE) process to more than double capacity of its 100,000 metric ton/year PE plant at Orange, Tex. Chevron plans to rebuild the plant's high density polyethylene gas phase unit, enabling it to produce 250,000 tons/year across a range of product grades. The expanded plant is to begin operations in 1999.

Montell Polyolefins and Japan Polyolefins Co. Ltd. formed a 50-50 Tokyo venture to sell polypropylene compounds, mainly to the automotive market. The venture, Montell-JPO Co. Ltd., was to begin operations July 1. The company will mainly sell and develop products made using Montell's Catalloy process.

Drilling-production

British-Borneo Petroleum Syndicate plc chartered the Atwood Hunter semisubmersible drilling rig for 2 years beginning in mid-1997 from Atwood Oceanics Inc., Houston. British-Borneo will pay Atwood an initial $10 million to mobilize the rig from the Far East to the Gulf of Mexico and then a day rate of $88,400. The rig will be upgraded to drill in water as deep as 3,500 ft.

Saskatchewan is considering ways to bring its royalties on heavy oil production closer to Alberta levels. Alberta producers currently pay about 25% less on taxes and royalties than those in Saskatchewan. Canadian Association of Petroleum Producers said much of the difference could be eliminated if Ottawa changed regulations to give heavy oil producers in Saskatchewan the same terms as oilsands producers in Alberta. There is no regulatory designation of oilsands in Saskatchewan.

Numac Energy Inc. will expand natural gas drilling in the Martin area of Northeast British Columbia after purchasing for $14.1 million (Canadian) gas properties there from Gardiner Oil & Gas Ltd. Both are Calgary firms. The purchase includes 25,700 acres of drillable prospects and proved reserves in the Martin area.

France's Total started delineation drilling in Sirri A and Sirri E oil fields off Iran, part of a $600 million development project. Production is to start up in 1998. Last year, Total signed an agreement with National Iranian Oil Co. (NIOC) to develop the Sirri fields after President Clinton quashed a similar agreement Conoco Inc. had with NIOC (OGJ, July 24, 1995, p. 67). Clinton has threatened sanctions against non-U.S. firms that do business with Iran.

Elf Aquitaine, Neste Oy, and KomiTek, state owned company of Russia's Komi republic, formed a venture to develop and produce oil from four fields in the Shapkino region of Nenets district and Komi republic north of the Timan-Pechora basin near the Barents Sea. Development will begin in winter 1996-97 in South Shapkino field.

Oilsands

Shell Canada Ltd. is considering a pilot oilsands project on leases it holds north of the Syncrude Canada Ltd. plant near Fort McMurray, Alta. Shell is studying the most economic way to conduct the project. It would involve a 500 b/d pilot in 1997-98, a demonstration project calling for 15,000 b/d in mid-2000, and a 30,000 b/d commercial plant about mid-2003. Shell also is considering trading its leases for a share of Syncrude or pumping future oilsands production directly to its Scotford refinery, near Edmonton.

Canadian Oil Sands Investments Inc., Calgary, completed the purchase of a 10% working interest in Alberta's Syncrude oilsands project from PanCanadian Petroleum Ltd. The purchase is being funded through public and private offerings, respectively, of 10 million trust units at $14.15 (Canadian) each and 13 special warrants at $13.65 each. Syncrude is the world's largest producer of light, sweet, synthetic crude oil.

Government

Canada's Petroleum Monitoring Agency (PMA), an energy industry watchdog and statistical agency, has been axed by Ottawa as part of federal downsizing. PMA gathered industry data for government in areas such as foreign ownership levels, production, and profits.

Gas storage

Texaco Canada Petroleum and Chandler Energy Resources Inc. plan to develop a 25 bcf natural gas storage site in Central Alberta to be known as the Alberta Hub. The companies are considering four sites for the project, which will have an offtake/injection capacity of 500 MMcfd. The hub will be operated by Sabine Hub Services, a unit of Texaco Canada. The partners want it to be the contract delivery point for gas futures on the New York Mercantile Exchange, which will start trading an Alberta contract this fall.

Pipelines

Workers laying a disputed section of the GasAndes pipeline from Argentina to Santiago, Chile, have a police escort. NOVA Corp., Calgary, lead partner in the project, cited violent protests earlier this month near a 21/2 mile section of the line in the Maipo River Valley near the town of San Alfonso. The project is opposed by some local residents. GasAndes has received all required approvals for the $350 million project. It suspended construction on the disputed section to allow time for a solution but now says it can no longer wait. NOVA noted there are limited routes where the line can be safely laid through the narrow valley.

ARCO Oriente Inc. and Agip Petroleum (Ecuador) Ltd. signed an agreement with Ecuador's government allowing them to lay a 170 km secondary pipeline to ship crude from Villano oil field to the Transecuadorian Pipeline System. The agreement amends ARCO-Agip's existing service contract for Villano development with state owned Petroecuador to include the secondary pipeline. Detailed engineering and environmental studies for both projects will be complete in 6-7 months, with the line to start up by 1999. The pipeline, designed to move 80,000 b/d, will at first carry 30,000 b/d, allowing for increased output later from Villano or other fields.

Refining

Shell Co. of Thailand Ltd. inaugurated its $2 billion, 145,000 b/d Rayong refinery at Mab Ta Phut, Thailand. Rayong, Thailand's fourth refinery, was developed by a venture of Shell 64% and state owned Petroleum Authority of Thailand 36%. Construction began in August 1993, and the plant was completed for start-up in December 1995 and is ramping up to full production. Products include liquefied petroleum gas, unleaded gasoline, jet fuel, low sulfur diesel, and fuel oil.

Nigeria approved proposals by local investors to build the country's first privately owned refineries, each export oriented. Brass Oil Refinery Ltd. would build and operate a 200,000 b/d refinery in Rivers state, and Qua Petroleum Refinery Ltd. would build and operate a 100,000 b/d refinery at Ibino, Akwa Ibom state. The investors are taking advantage of new government incentives encouraging private domestic involvement in Nigeria's petroleum industry.

Catalysts

Orient Catalyst Co. Ltd., Tokyo, and Degussa Corp., Ridgefield Park, N.J., formed a long term alliance to produce hydrotreating catalysts. The agreement enables Degussa to increase the number of product lines produced at its Calvert City, Ky., plant, and gives Orient a production source close to its customers outside Japan. Degussa's plant was expanded to use Orient's technology to produce HOP light oil desulfurization catalysts.

NGL

Mapco Natural Gas Liquids, Tulsa, signed a letter of intent with Rexene Corp., Dallas, to form a venture to fractionate and market natural gas liquids. The new company will acquire a fractionator at Rexene's Odessa, Tex., petrochemical complex, expand its fractionation capacity to 80,000 b/d, and construct additional pipeline and storage facilities. Much of the resulting ethane/propane will be used at Odessa, where Rexene plans an olefins capacity expansion and a new linear low density polyethylene plant slated to start up in 1998. The rest of the products will be sold in the U.S. Southwest and northern Mexico.

Companies

Phillips Petroleum International Investment Co. closed the purchase of Bridge Oil Timor Sea Inc. from Parker & Parsley Petroleum Co., Midland, Tex., for $78.4 million. Bridge Oil Timor owns interests in Bayu (ZOCA 91-13) gas/condensate field in the Zone of Cooperation Area in the Timor Sea between Australia and Indonesia.

Enron Capital & Trade Resources (ECT) agreed with Shell Western E&P Inc. to finance onshore oil and gas exploration and development. ECT will arrange for part of the capital Shell needs to acquire land, conduct seismic work, and drill wildcats and development wells in South Louisiana. ECT plans to invest in and manage investments by a group of institutional investors that will participate in the E&D financing scheme. The agreement is for at least 2 years and could be extended to other areas.