Frontier oil and gas exploration marks progress around the world.
The Falkland Islands government has approved a draft agreement between the U.K. and Argentina designed to enable cooperation over future oil and gas E&D.
The issue of the islands' sovereignty, which sparked the war between the U.K. and Argentina in the early 1980s, was put aside. Instead, the draft accord identifies areas of potential cooperation in E&D and ways to coordinate petroleum activities. The draft was sent to London and Buenos Aires, with signature of a final agreement expected by end of September.
The Falklands government plans to open its first offshore licensing round Oct. 3 (OGJ, Nov. 14, 1994, p. 40). On that date full details of blocks on offer will be announced, and briefing meetings will be organized about that time.
Companies applying for acreage in Greenland's offshore exploration licensing round planned early next year may end up fighting over a single license. There have been various recent press reports of a large discovery off Greenland. However, these may have been overly optimistic reports of a potential hydrocarbon trap identified by recent seismic data that Statoil says reveals a "flat spot" structure two and a half times larger than the one that first indicated giant Troll oil and gas field off Norway. Statoil's Danish unit said, "The data show two large flat spots close together. However, we know of no other prospects in the data available so far." Interest in exploration off Greenland is growing after four recent onshore wells showed traces of oil.
Earlier offshore drilling found nothing. The licensing is being organized by Denmark's Ministry of Energy, and deadline for applications is Feb. 29, 1996. Statoil and Mobil are evaluating the Greenland continental shelf. The seabed in the area up for licensing slopes steeply, with water depths of 200-1,000 m.
Hunt Oil and PanCanadian Petroleum have spudded a second well on West Newfoundland's Port au Port Peninsula (OGJ, July 24, Newsletter).
They are tightholing their first wildcat in the area near Cape St. George, about 30 miles from the new well location. Residents reported gas flaring from the location of the first well. The new test is on a farmout from Mobil Canada.
Statoil and BP have a deepwater oil strike off Nigeria.
Their 1 Oyo wildcat is about to be tested, but results will be kept tight. Drillmar 1 semisubmersible rig drilled the well in 316 m of water. Statoil and BP early this year undertook an extensive seismic survey of Block 210 as well as of Blocks 213, 217, and 218, in which the alliance also has interests.
Statoil plans to drill a rank wildcat on Block 213 next year. Although Statoil is effectively operator of Block 210, a share of 57.5% and official operatorship are held by Nigerian firm Allied Energy Services. Statoil and BP each holds a 20% interest in Block 210, and Nigerian firm Camac holds the remaining 2.5%
No sooner has Total disclosed its withdrawal from a project to build Viet Nam's first refinery than three South Korean companies are reported to be vying to pick up the threads.
Total recently pulled out of the project, citing a feasibility study that showed it would give little return on investment because its proposed inland site is far from coastal access to crude supplies (OGJ, Sept. 11, Newsletter). Daewoo, Hyundai, and LG -- formerly Lucky-Goldstar -- have held separate talks with PetroVietnam about taking stakes in the project.
Total has signed a deal with Yemen covering that country's proposed $3 billion LNG export project. The project, to start up by 2000, would export 5 million metric tons/year of LNG to Asia and Europe for 25 years (OGJ, Mar. 27, p. 28). Total will have a 70% stake in the project and Yemen's General Gas Corp. 30%. Talks with Exxon, Hunt, and Yukong are under way regarding their possible participation in the project.
Capacity utilization of some key petrochemicals will decline the rest of this decade. Chem Systems Inc. (CSI), Tarrytown, N.Y., expects U.S. ethylene capacity growth to outpace a projected average 3.5%/year increase in consumption. As a result, margins and prices will decline for most of the decade. A similar trend is expected for benzene, with supply from toluene disproportionation and Aromax processes outpacing an expected 2%/year growth. However, propylene bucks this trend, with 4.4%/year demand growth for the rest of the decade creating tight supplies. CSI says growth in propylene supply due to increased ethylene capacity will not satisfy the added 4 billion lb/year demand, leaving refinery supplies to take up the slack.
Chemical Market Associates Inc. (CMAI), Houston, predicts worldwide methanol supplies will meet increased demand for production of MTBE and other methanol derivatives through 1999. CMAI projects global nameplate methanol capacity will expand by 47% between 1994 and 1999, although much of this 12 million metric ton/year increase depends on whether plans disclosed to date materialize. During the same period, demand growth will total 6.4 million metric tons/year or 29.6%. CMAI expects methanol balances and prices to remain rather loose for the foreseeable future, with global capacity utilization rates projected to decline to 74.1% in 1998 from last year's 84.7%.
European petrochemical sector consolidation continues.
Austria's OMV and Spain's Repsol are reportedly close to forming a joint venture of their polyolefins operations to create Europe's third largest petrochemical company. OMV's board apparently has okayed the move, and Repsol's board is expected to approve the deal this week. This follows creation of Borealis and Montell last year, now respectively first and second largest of Europe's polyolefins producers (OGJ, July 25, 1994, p. 40).
Despite the apparent scale of the venture, with OMV's capacity estimated at about 770,000 metric tons/year and Repsol's at about 720,000 tons/year, reaction to the plan has been muted as having little effect on Europe's petrochemical industry. OMV has a large market share in Austria, South Germany, and North Italy, but little outside that region, and a good position in polypropylene but not in polyethylene. Similarly, Repsol has a large market share in Spain and little outside while holding a good position in polyethylene but not in polypropylene.
U.S. Ex-Im Bank has approved a $150.5 million loan guarantee to support the $160 million sale of U.S. equipment and services to build a polyethylene plant outside Nizhny Novgorod, Russia.
BSI Industries Inc., Derwent, Ohio, is the engineering and procurement contractor for Russia's Nizhegorodnefteorgsintez.
Northern Border Pipeline plans to amend its FERC application, filed last February, to reflect sharply increased gas shipper interest in its expansion/extension project shown in its recently concluded second open season (see related story, p. 47). The proposed project would expand the pipeline capacity from the Canadian border to Harper, Iowa, and extend the system from Harper to a point near Manhattan, Ill., enabling shippers to reach new markets.
In its amended application, Northern Border wants to add 224 miles of 36 in. and 19 miles of 30 in. pipeline related to the extension and 17 miles of 42 in. and 147 miles of 36 in. pipeline loop related to the expansion. Plans also call for adding 168,000 hp of compression at nine new sites and 130,000 hp of compression at six existing stations. The project will increase Northern Border's receipt capacity at the Canadian border and in the northern plains by 700 MMcfd from 1.7 bcfd. Deliveries through the expanded system from Ventura, Iowa, to Harper will increase by 962 MMcfd, and the extension from Harper to the Chicago area will deliver 684 MMcfd. The revised project is expected to cost about $800 million and be in service by early 1998.
Reformulated gasoline burned in an internal combustion engine will be the dominant fuel on U.S. highways by 2015.
That's the view of members of the Society of Automotive Engineers surveyed by the society. SAE members, choosing from three scenarios, picked RFG by a 2-1 margin over alternative fueled vehicles and those fueled by current gasoline. Those surveyed also favored a hybrid electric/gasoline vehice as having the best chance of commercial success among alternative fueled vehicles the next 20 years. CNG came in a strong second, and all others trailed far behind.
Meantime, novel approaches to cutting vehicle emissions are the order of the day. U.S. DOE says a new catalytic converter design for cars and trucks could cut engine emissions by at least 50% and substantially reduce air pollution in cities across the country.
The design, based on technology developed at DOE's National Renewable Energy Laboratory in Golden, Colo., would halve "cold start" emissions that occur the first few minutes after an engine is started. Researchers used a form of vacuum insulation and phase-change heat storage to enable a catalytic converter to maintain its operating temperature for more than 17 hr after the engine is killed.
Stockholm County Council will use cheap red wine to fuel environmentally friendly buses because of an ethanol shortage.
The council won European Union approval to import 5,000 metric tons of surplus "plonk" from Spain, for conversion to fuel. The Swedish capital's council also cited a 30% price rise over the past year in the price of wood ethanol. Copyright 1995 Oil & Gas Journal. All Rights Reserved.
