Industry Briefs

Tankers

Statoil and Rasmussen AS, Oslo, established a joint venture to operate a fleet of multipurpose tankers. Based on a Statoil concept, the ships can be used in tankering or converted for use as production/storage ships or drillships by installing topsides modules. Navion AS, Stavanger, will be owned 80% by Statoil and 20% by shipowner Rasmussen. It will operate 51 ships initially, with fleet expansion planned.

Drilling-production

Twelve passengers aboard a Super Puma helicopter were killed off Norway. The helicopter, operated by Helikopter Service AS, Stavanger, crashed as it attempted to land on the Norne production/storage ship in the Norwegian Sea. Casualties included the crew, one Statoil employee, one Kvaerner AS worker, and eight Aker Stord AS workers. U.K. operators Bond Helicopters Ltd., British International Ltd., and Bristoro Ltd. have grounded their fleet of more than 30 Super Puma aircraft as a precaution. Other models will continue in service.

Phillips Petroleum Co. U.K. Ltd.
and Shell U.K. Exploration & Production disclosed test results for a 50-50 exploratory well on a prospect that straddles U.K. North Sea Blocks 22/23b and 22/28a. The well, drilled with the Rowan Gorilla IV jack up, tested two intervals: the first flowed 5,590 b/d of oil and 6 MMcfd of gas through a 56/64-in. choke; the second flowed 5,900 b/d of oil and 16 MMcfd of gas through a 44/64-in. choke.

U.K. Science, Energy, and Industry
Minister John Battle said that European Directive requirements for offshore developments will take effect this year rather than March 1999, as first planned. The rules will require offshore operators to submit environmental impact assessments for planned developments with production capacities of more than 500 metric tons/day of oil or 500,000 cu m/day of gas. They also will apply to new pipelines with diameters exceeding 800 mm or lengths exceeding 45 km.

Black Sea Energy Ltd.,
Calgary, reports production at its Tura Petroleum joint venture in Russia has increased to 7,100 b/d from initial production of 4,800 b/d. Several fracture treatments have been performed, and six development wells and four exploration wells were drilled in the 6 months ending June 30.

China National Petroleum Corp.
won management rights for New Wujin, Kazakhstan's second largest oil field. Bid amount was not disclosed. The deal follows CNPC's investment of $325 million in Kazakhstan's Aktyubinsk oil field and a promise to invest another $4 billion in the activities of state firm Aktyubinskmunaigaz during the next 20 years (OGJ, June 9, 1997, Newsletter).

U.S. Minerals Management Service
developed new well naming and numbering standards to simplify and clarify well identification and data storage. MMS said the changes will significantly reduce its costs and labor and may save the industry 10-15% from current data processing costs.

Environment

Interstate Oil and Gas
Compact Commission published foreign language versions of guidelines for effective oil and gas waste management regulation. A Spanish version of Iogcc environmental guidelines for state regulatory programs will be distributed to South America, and a Russian version will be offered to the former Soviet Union.

Gas storage

Iogcc will publish weekly estimates of the percentage of gas in underground storage as supplements to those provided by the Energy Information Administration and the American Gas Association. The commission said producers, pipelines, consumers, and regulators need current and reliable gas storage data, expressed as a percentage of presumed storage capacity.

Exploration

Norsk Hydro AS says a rank wildcat on Block 6305/5 in the Norwegian Sea could be a big discovery. At presstime, the well was said to be only in the top section of the Ormen Lange prospect, with further pay expected to be cut as the well progresses. The company is not planning to test the well immediately but intends to return next year to conduct tests. The well is being drilled in 890 m of water off central Norway.

Mobil Oil Canada Ltd.
and Chevron Canada Resources Ltd. are forming a joint venture to explore 29 million acres in the Jeanne d'Arc basin on the Grand Banks off Newfoundland. The companies say the strategic alliance offers potential cost reductions. Mobil said the arrangement will allow both companies to move more quickly on exploration and development plans for Canada's east coast. Mobil and Chevron are two major partners in the Hibernia oil field development off Newfoundland, scheduled to start up late this year.

Turkmenistan
officials plan to reveal in London this week details of a licensing round covering acreage on the Turkmen Caspian shelf (OGJ, Sept. 1, 1997, Newsletter). The round is being funded by the European Commission, but details are hazy. The Turkmen government is reluctant to issue details because of continuing border disputes with Azerbaijan over the Caspian Sea territorial boundary. Western Atlas International Inc., London, will market data packages. The Turkmen government said bid qualification and evaluation will be held in December.

Oilsands

Husky Oil Ltd., Calgary, began preliminary engineering on a $200 million (Canadian) expansion of its heavy oil upgrader at Lloydminster, Alta., to 85,000 b/d from 55,000 b/d. A final decision on the project will be made by yearend. Husky is discussing the expansion plan with the Saskatchewan government, which has a 50% interest in the plant. The $1.6 billion plant lost about $1 billion during 1991-95 but began making a profit in 1996 when heavy oil markets improved. Heavy oil production in the area is expanding, and current price differentials for heavy oil vs. light crude are favorable.

Suncor Energy Inc.,
Calgary, reports production at its Fort McMurray, Alta., oilsands plant exceeded 100,000 bbl in 24 hr for the first time in 30 years. Production Aug. 25 was 102,118 bbl. Output is expected to average 85,000 b/d in second half 1997.

Pipelines

U.S. Department of Transportation's Office of Pipeline Safety issued data on how it will run its pipeline risk management demonstration program. The program will let operators demonstrate that their risk management programs can outperform federal pipeline safety regulations.

Canada's National Energy Board
begins hearings on the proposed Alliance pipeline on Nov. 17 in Calgary, Edmonton, Regina, and Fort St. John, B.C. The line includes a 970-mile main line and 480 miles of laterals in Canada and a U.S. portion from the Saskatchewan/North Dakota border to the Chicago area (OGJ, Aug. 25, 1997, p. 29). Completion is slated for November 1999. Alliance Pipeline LP chose six financiers and advisers: Bank of Montreal; Bank of Nova Scotia; National Westminster Bank of Canada; Chase Manhattan Bank of Canada; Goldman, Sachs & Co.; and Scotia Capital Markets. Partners will supply 30% of funds.

Companies

EVI Inc., Houston, acquired McAllister Petroleum Services Ltd., Calgary, and Rotary Drilling Tools Ltd. (RDT), Singapore, in a $27 million cash and assumed-debt deal. McAllister is part of EVI Oil Tools-EVI's production tool division. RDT was combined with Grant Prideco-EVI's drilling tools, tubulars, and marine connector division.

Abacan Resources Corp.,
Calgary, is taking a $100 million write-off because of lower-than-forecast reserves at its Ima oil field in Nigeria. The company has reduced its reserves estimates by 30% for the field near the Niger River delta.

Pakistan,
in advance of a privatization auction, published operating details of five public petroleum enterprises. Fixed assets owned or leased by Sui Northern Gas Pipeline Ltd., originally valued at $785 million, have a book value of $532 million. Sui Southern Gas Co.'s total assets are about $717 million. Net profits for the two companies during 1995-96 were about $10 million and $13 million, respectively. Oil & Gas Development Corp.'s capital assets are about $85 million; Pakistan State Oil's are about $380 million ($700 million including capital work in progress).

Gas Authority of India Ltd.
(GAIL) outlined a $1.2 billion expansion program involving a $720 million gas processing plant at Gandhar, Gujarat; a $360 million LPG plant at Auraiya, Uttar Pradesh; and a $156 million Kandla-Loni LPG pipeline. The pipeline will be financed by Asian Development Bank. The gas processing and LPG plants will be financed through a combination of internal sources and financial institutions. GAIL is already involved in a petrochemical project at Pata, Uttar Pradesh, and LPG plants at Assar and Usar, Maharashtra, worth a total $1.6 billion (OGJ, Sept. 8, 1997, p. 37).

Shell Canada Ltd.,
Calgary, will receive a $220 million (Canadian) tax refund from Revenue Canada. The refund is based on a court action by Gulf Canada Resources Ltd. in 1992 over deductions permitted for resource allowances dating to the 1970s. Gulf won the case, and other energy and mining companies have been receiving refunds. Imperial Oil Ltd., Toronto, received an $843 million refund in 1996.

Refining

North Atlantic Refining Ltd.'s 105,000 b/d refinery at Come By Chance, Newf., will be in turnaround for maintenance for 15 days beginning Sept. 10.

Lubricants

Mobil Corp. commissioned a $250 million lube base oil plant at Singapore, bringing its total investments there to more than $2 billion. Plant capacity is 8,000 b/d of base oils that can be blended into lubricant, hydraulic, compressor, gear, and engine oils. Mobil expects lubricants demand to grow 3.5%/year in Asia during the next 4 years. The new plant uses catalytic hydroprocessing technology (OGJ, Sept. 1, 1997, p. 63).

LPG

IBP Co. (formerly Indo-Burmah Petroleum) received permission from the Indian Ministry of Petroleum to move into LPG marketing. IBP, which sells gasoline, kerosine, diesel, and lubricants, soon will appoint dealers for launching LPG sales in the public distribution system. Parallel marketing of LPG will be done by ICL, a joint venture of IBP and Caltex Petroleum Corp. ICL is setting up an LPG terminal at Haldia (OGJ, Aug. 4, 1997, p. 35). This is expected to be ready by mid-1999.

Bharat Shell Ltd.
(BSL), a joint venture of Bharat Petroleum Corp. Ltd. and Shell International, leased from Finolex Cables Ltd. two 10,000-ton refrigerated storage tanks and a private jetty at Ratnagiri, India. BSL expects to triple LPG sales to 60,000 tons by yearend 1998. The facility will help BSL avoid demurrage that has averaged $70/ton of LPG this year due to congestion at the Bombay port. BSL is unable to use the facility because India's Petroleum Act of 1934 prohibits import of LPG through Ratnagiri. The company hopes to get clearance from the petroleum ministry in 2 weeks.

Petrochemicals

Turkmenistan signed a letter of intent with Mannesman KTI to build an ethylene and polymers plant at an undisclosed site. Polyethylene capacity will be 100,000 metric tons/year; polypropylene also will be produced. Investment cost is $100-150 million.

Titan Petrochemicals (Malaysia) Sdn. Bhd.
let contract to Krupp Uhde GmbH, Dortmund, for process licenses, engineering, and equipment for an aromatics plant at Titan's complex at Pasir Gudang, Johor, Malaysia. The plant will produce benzene and toluene from 232,000 metric tons/year of pyrolysis gasoline. Feed will come from Titan's 230,000-ton/year ethylene unit and from a 330,000-ton/year unit Titan plans at Johor Bahru. The plant will include feed fractionation, hydrogenation via a BASF process, extractive distillation via Krupp Uhde's Morphylane process, separation, and offsites. Start-up is scheduled for 1999.

Japan Energy Corp.
will participate in a Malaysian joint venture to produce paraxylene and benzene. Aromatics Malaysia Sdn. Bhd. was formed last year by equal partners Petronas and Mitsubishi Corp. (OGJ, July 22, 1996, p. 30). The plant will be built on the east coast of peninsular Malaysia, with capacity to produce 420,000 metric tons/year of paraxylene and 145,000 tons/year of benzene. Start-up is scheduled early in 2000. Aromatics Malaysia let a construction contract to a group led by Toyo Engineering Corp.

Formosa Plastics Group
let contract to Standard Fasel-Lentjes (SFL), Utrecht, for two waste heat boilers for Taiwan's sixth naphtha cracker. Value of the contract is 40 million guilders ($19.5 million). SFL will design, engineer, manufacture, and deliver to Mailiao Seaport the two 381 ton/hr units. The boilers will be fueled by CO-bearing regenerator flue gas from a reduced-crude conversion unit at the plant. The first unit will be delivered in March 1998, the second in September 1998. The ethylene plant is scheduled for start-up by yearend 1998 (OGJ, Apr. 21, 1997, p. 34).

Nitrofert,
Gazprom's Estonia subsidiary, plans a $200 million, 65,000-metric ton/year methanol plant at an undisclosed site. Gazprom will supply natural gas feed from Russia, and methanol will be sold locally and exported. A Deutsche Bank group is extending credit for the project.

Government

The U.S. Department of Energy opened 11 bids for sale of crude oil from Elk Hills Naval Petroleum Reserve near Bakersfield, Calif. It expects the sale to raise more than $76 million. DOE planned to award six 2-month contacts for 12,000 b/d, based on a West Texas intermediate pricing index. Another 29,950 bbl will be sold during 4 months using a posted price index.