INDUSTRY BRIEFS

Government

Hungary reportedly postponed controversial energy price rises that the government had promised to international investors. London's Financial Times newspaper said Hungary's cabinet rejected state energy office price proposals due in October, delaying their introduction until January. Western utilities have invested almost $2 billion in state gas and electricity company privatizations since last autumn. Government previously said it would increase domestic energy costs to reflect world market prices, so investors could begin reaping a promised 8% return by 1997.

Exploration

Denison Mines Ltd., Toronto, reported an oil discovery in the Prinos area of the Aegean Sea off Greece. The well in Prinos North field area flowed on test at rate of about 3,500 b/d of high sulfur crude. Denison has a 45% interest in Prinos North field and a 69% interest in the larger Prinos field. The two fields have combined production of about 13,000 b/d.

Seagull Energy Corp., Houston, disclosed details of two gas discoveries in Texas. The 1 Vastar Fee in Orange County flowed on test 3.3 MMcfd and 77 b/d of condensate from Eocene Yegua sand through a 12/64 in. choke with flowing tubing pressure of 3.725 psi. In the Gulf of Mexico, A-1 Brazos 377 cut 35 ft of pay that yielded 8.5 MMcfd of gas through a 24/64 in. choke with flowing tubing pressure of 1,620 psi.

PanCanadian North Sea Ltd., London, acquired a farmout of 22 blocks and partial blocks operated by Oryx U.K. Energy Co. By paying $55 million exploration and appraisal costs, PanCanadian will earn at least half Oryx's interest in all 22 blocks. The deal does not include producing blocks. Oryx recently bought Ninian interests and other assets from Chevron (U.K.) Ltd. (OGJ, Aug. 12, p. 27).

Pipelines

Tenneco Energy plans to expand capacity on its 1,149 mile, 577 MMcfd East Tennessee Natural Gas pipeline by 32 MMcfd. The project involves adding 6 miles of line and 1,820 hp to five compressor stations. Tenneco says construction of facilities will begin in July 1997, pending regulatory approvals, with new capacity available November 1997.

Express Pipeline let a $27 million (Canadian) contract to O.J. Pipelines Corp. to lay part of a crude oil pipeline from Alberta to Wyoming. The 146 mile segment of 24 in. line will extend from the Alberta/Montana border to Alberta's Red Deer River region. Work under the contract is to begin this month for completion by Nov. 30. O.J. Pipelines is a unit of Ocelot Energy Inc., Calgary.

TE Products Pipeline Co. let contract to Tellepsen Pipeline Services Co. (Tepsco) to lay 54 miles of 10 in. products pipeline from Sarpeta, La., to El Dorado, Ark. The new 10 in. pipeline will replace an existing 8 in. pipeline that will be filled with nitrogen and decommissioned. Products will move from the Sarpeta interconnect north to a tank farm near El Dorado. Construction is under way for completion in October.

Alberta Energy and Utilities Board scheduled a joint hearing on three liquids pipeline projects in Alberta proposed by Calgary companies. Alberta Energy Co. Ltd. wants to lay a 6 in., 58 mile condensate pipeline extending south from Cold Lake to the Elk Point/Lindbergh area. Husky Oil Ltd. and a combine of Gibson Petroleum Co. and ELAN Energy Inc. made applications for 12 in. pipelines extending from Lindbergh to Hardisty. The Husky project involves an 87 mile blended heavy oil line, and the Gibson/Elan project a heavy oil line.

Gas processing

ANG Gathering & Processing Ltd. (AG&P) paid $20 million (Canadian) to acquire a 25 MMcfd capacity gas gathering and processing system from Ocelot Energy Inc, Calgary. The purchase provides AG&P, a unit of Alberta Natural Gas Co. Ltd., a 100 % interest in gas processing facilities and associated gas gathering systems in Southwest Saskatchewan. Ocelot will continue to use the facilities for its own production.

Saudi Aramco let a lump sum turnkey contract worth about $150 million to France's Technip for design, procurement, and construction of gas processing facilities at Abqaiq, Saudi Arabia. The contract is tied to development of Shaybah oil field in southeastern Saudi Arabia. New downstream facilities to be installed and incorporated with existing processing facilities include a crude oil stabilizer, a two-stage compression plant, and an NGL stripping unit, as well as storage, utilities, water treatment, and a distributed control system. Construction is to be completed by November 1998.

LPG

AmeriGas Propane LP purchased Phillips Petroleum Co.'s retail propane marketing operations. The acquisition of Phillips 66 Propane Co. includes five bulk storage plants, 28 propane delivery trucks, and 11 satellite storage facilities in Colorado, Wyoming, and Missouri. Phillips will retain its wholesale propane subsidiary PhilGas.

Companies

Tom Brown Inc., Denver, agreed to purchase Presidio Oil Co. for $183 million. As part of the agreement, Tom Brown also will assume an undisclosed portion of Presidio's liabilities. The transaction will be consummated through a Chapter 11 bankruptcy proceeding that was filed by Presidio in August and is subject to final court approval.

Berry Petroleum Co., Taft, Calif., agreed in principle to acquire Tannehill Oil Co. Inc., also of Taft. Berry will pay $25.2 million for about 600 acres that produce about 1,400 b/d of crude oil. Berry estimates proved reserves at 7.1 million bbl on the Tannehill properties. Included as part of the transaction is a 17,700 kw cogeneration power plant that provides steam enhanced recovery operations on the Tannehill properties and generates surplus electricity for sale to a utility.

Northrock Resources Ltd., Calgary, completed purchase of Inland Oil & Gas Ltd. from parent B.C. Gas Inc. for $105 million (Canadian). B.C. Gas will use proceeds to reduce debt and buy back shares, among other purposes. Both are Vancouver, B.C., firms.

Canadian Arctic Petroleums Ltd. completed a takeover of Tekerra Gas Inc. Both are Calgary firms. The combined company, Canadian Arctic Petroleums, will have crude production of more than 160 bbl of oil equivalent/day.

Drilling-production

American Pacific Marine Inc., Port Hueneme, Calif., removed four platforms off California for Chevron Corp. Dismantling Platforms Hope, Heidi, Hazel, and Hilda started in April and was finished 2 months ahead of schedule at a cost of about $35 million. Erected by Chevron during 1958-65, they were California's first major offshore platforms.

Total put on line a long offset horizontal well drilled from Hidra Central platform off Tierra del Fuego, Argentina, to tap reserves in the southern part of Hidra field. The well tapped pay 5,000 m from the platform at a true vertical depth of 1,700 m. Measured depth is 6,000 m. The well's initial output of 9,500 b/d places it among the highest producing wells in Argentina. Total also plans to drill a well from Hidra North platform to tap the Ara satellite.

Flores & Rucks Inc., Baton Rouge, agreed to pay $139 million for Mobil Corp.'s interest in 13 Gulf of Mexico producing fields. The fields, which produce about 10,000 b/d of oil equivalent, are mainly in shallow waters off Louisiana. Mobil's working interests in the fields are 20-100%.

Forest Oil Corp., Denver, paid Amerada Hess $9 million to acquire an additional interest in Katy field in Harris County, Tex. The field has about 11.3 bcf of proved natural gas reserves and net production of 4 MMcfd. The acquisition brings Forest Oil's combined working interests in the unit to about 33%. To reduce price risk, Forest locked in a wellhead price of $2.44/Mcf through Dec. 31, 1997. Katy field, operated by Exxon Corp., has produced more than 10 tcf of gas from Eocene Yegua and Wilcox.

Coastal Corp. will begin fabrication of a platform to be installed on West Cameron Block 498 in the Gulf of Mexico. It will handle production of 10,000 b/d of oil and 50 MMcfd of gas from four wells. Production is to begin in 1997. After installing the platform, Coastal will drill additional delineation wells on the block. It last month acquired a 68.71 % working interest in the block from Amerada Hess Corp. and Apache Corp. Coastal replaced Amerada as operator.

Cultus Petroleum (U.K.) Ltd., an affiliate of Australia's Cultus Petroleum NL, Perth, bought Mobil North Sea Ltd.'s 6.7% interest in Hutton field off the U.K.

Oilsands

Solv-Ex Corp., Albuquerque, began start-up operations to develop a scaled-down version of an oilsands and minerals extraction project near Fort McMurray, Alta. First phase of the $170 million (Canadian) project will be a 5,000 b/d oilsands mine, about one third of project proposed capacity. Solv-Ex has financing of about $80 million on hand to proceed with initial development and expects the project to be completed by mid-1997.

Exports-imports

Canada's National Energy Board postponed a natural gas export hearing originally planned for November to December. A filing deadline for applicants also was extended from Aug. 29 to Sept. 26. NEB said some potential applicants may wish clarification on the types of information required under new supply filing requirements published Apr. 30.

Venezuela and Mexico renewed the San Jose oil accord under which the two countries supply about 160,000 b/d of crude oil to Central American and Caribbean nations. The pact, first signed in August 1980, has been renewed every year since and benefits Barbados, Belize, Costa Rica, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Nicaragua, Panama, and the Dominican Republic.

Environment

Chinese Petroleum Corp., Taipei, agreed to pay for damages following a series of accidents last month. CPC will pay $12.4 million to area residents affected by an Aug. 9 explosion at its Kaohsiung refinery and more than $24.4 million for an Aug. 10 subsea pipeline leak. The resulting oil spill, one of the worst in Taiwan's history, heavily damaged fishing vessels at several nearby ports. Industry sources in Taipei project CPC's total losses from the accidents could be as much as $72.7 million.

Used Oil Recycling Coalition, Cleveland, released results of a study performed by Entropy Inc., Research Triangle Park, N.C. The study shows that burning industrial fuel derived from used oil is a safe and environmentally benign form of energy recovery. Asphalt plants account for 43% of used oil burned as fuel in the U.S.

Refining

Midor, the Egyptian-Israeli group, let contract to Italy's Technipetrol SpA and France's Technip for procurement and construction of a $1.2 billion, 100,000 b/d refinery at Alexandria. Scheduled to come on stream at yearend 1999, the project will give Egypt its first private sector refinery. The refinery, which will feature UOP's hydrocracking process, is intended to be the first in the region to meet European environmental standards.

CPC formed a joint venture to build and operate a lubricant oil and asphalt plant in Viet Nam. Construction is slated to begin March 1997 and be complete in about 4 years. CPC will hold 45% of the shares in the venture with the Can Tho Province government holding 30%. Other partners are Taiwanese companies Yi Jinn Industrial Co. and China Technical Consultants Co.

Hanwha Energy Co. Ltd. expanded sulfur recovery capacity at its Inchon, South Korea, refinery using an oxygen injection system provided by TPA Inc., Dallas. The oxygen enrichment technology increased sulfur recovery capacity to 72 metric tons/day from 35 tons/day, well above the guaranteed capacity of 60 tons/day.

Lagoven SA let contract to a combine of M.W. Kellogg and Venezuela's Inelectra to build a naphtha catalytic cracker and a tertiary amyl methyl ether (TAME) unit at its Amuay refinery in Northwest Venezuela. The cracker will have capacity of 72,000 b/d and produce about 18,000 b/d of high quality olefins. TAME capacity will be about 4,000 b/d. Completion is slated for first quarter 1998.

Petrochemicals

Shanghai Petrochemical Co. Ltd. (SPC) will acquire from Shanghai Jiushi Co. its Shanghai Jin-Yang acrylic fiber plant at Shanghai. Total assets of the plant are 850 million yuan. The plant produced 25,800 tons of acrylic fiber in 1995. Sales were 520 million yuan and gross profits 1.884 million yuan. SPC will assume all debts at an agreed price of 38.8 million yuan cash.

Pequiven SA, petrochemical unit of Petroleos de Venezuela SA, plans to build a plastic resins plant to supply domestic and Latin American markets. The 120,000 metric ton/year, $120 million plant will be built by Venezuela's Jantesa SA and Italy's Technipetrol. Completion is slated for August 1998.

Alternate fuels

Bitumenes Orinoco SA (Bitor) sent the first shipment of Orimulsion, Venezuela's proprietary extra-heavy crude/ water/surfactant emulsion boiler fuel, to China. Bitor shipped 52,000 metric tons of Orimulsion to state-owned China National United Oil Corp.