Oil country hot line

February 2000 Vol. 221 No. 2 Hot Line Oil prices spike to 9-year high Crude prices soared to $29.95/bbl in mid-January, the highest since the Gulf War in 1991, due in part to OPEC production

February 2000 Vol. 221 No. 2
Hot Line

Oil prices spike to 9-year high

Crude prices soared to $29.95/bbl in mid-January, the highest since the Gulf War in 1991, due in part to OPEC production cuts and winter storms. Spurred by a winter storm in the U.S. northeast, heating oil prices rose 50% in two weeks. Fears of Y2K disruptions also helped drive prices higher as petroleum products were hoarded. According to the International Energy Agency, world demand swelled to 77.3 million bpd in fourth-quarter 1999, exceeding available stockpiles by 3.1 million bpd. OPEC says it may keep its production cuts in place after the current March expiration date.

Experts examine Iraqi oil capacity

The Security Council said it stands ready to authorize additions to the current allocation for Iraqi oilfield equipment based on a U.N. oil expert team’s report. To be presented March 26, the report will examine the country’s current oil export capacity, spare parts and equipment inventory, as well as options for involving foreign oil companies to help increase exports.

Burning wells in Chechnya, Rio oil spills

Tens of millions of rubles will be required to put out fires in 16 oil wells in Chechnya. Hydrocarbon levels in the Terek River are well above permissible levels. Russian First Deputy Fuel and Energy Minister told Itar-Tass the burning oil is producing a serious ecological impact on local environment and "may result in serious consequences for the Caspian Sea." Meanwhile, corrosion and faulty software are being blamed for the severity of a pipeline leak in Brazil’s Reduc refinery. The spill went unnoticed for several hours, as about 338,000 gallons of oil spewed out of the broken pipeline and into Rio’s Guanabara Bay.

Texaco tests giant Nigerian discovery

Texaco’s offshore Nigeria Agbami-2 appraisal well confirms Agbami as a giant discovery with potential recoverable reserves of over 1 billion boe. The test, which surpassed expectations, and technical data suggest that it may rank among the largest single finds to date in deepwater West Africa. The structure covers 45,000 acres and extends from Block 216 into Block 217.

Santa Fe Snyder to explore Gabon

Santa Fe Snyder signed a 20-year production-sharing contract to explore the 945,000-acre offshore Agali Block in northern Gabon. The initial five-year exploratory term calls for new seismic and a wildcat. The firm’s net acreage in West Africa is about 3,724,000 acres.

Esso Exploration eyes deepwater Egypt

Re-entering Egypt’s exploration market, Esso Exploration and Production acquired a 25% interest in Egypt’s Northeast Mediterranean (NEMED) Block. Shell retains a 75% interest in the 10,000,000-acre block in water depths from 2,600 to nearly 9,800 ft. Encompassing the majority of the deepwater Nile Delta area, the tract is about one-half the size of the entire U.S. Gulf of Mexico deepwater area.

El Paso and Coastal to merge

El Paso Energy agreed to acquire Coastal Corp., combining two Houston-based energy companies. In the U.S., the new company will have 58,000 mi of pipelines and access to 70% of the population. Coastal’s offshore natural gas reserves would supply El Paso’s power facilities and pipelines in Brazil and Argentina. Coastal’s marketing and trading operations in Southeast Asia complement El Paso’s network of independent power facilities in the Philippines, Bangladesh and India.

Anadarko to develop HBN in Sahara

An addendum to Anadarko’s agreement with Brown & Root-Condor expands Anadarko’s plans to develop Stage II facilities for the Hassi Berkine South (HBNS) field to include Hassi Berkine (HBN) oil field in Algeria’s Sahara Desert. Plans call for completion of a production train capable of processing 75,000 bopd and installation of a gathering system, injection lines and storage / export facilities. Stage II facilities with a capacity of 75,000 bopd should be completed by late 2001. Total capacity of 210,000 bopd from three production trains at the Central Production Facility is expected in early 2002.

Reinvesting oil revenues urged

Iranian President Mohammad Khatami encouraged industry to reinvest oil revenues in development programs rather than daily life expenses. Iran lost $5.2 billion in revenue in fiscal year 1998, which ended in March 1999, due to declines in oil prices. The loss left the country with serious problems in guaranteeing the budget of development programs during the year. Experts say that FY 1999 could see Iran earning about $3 billion more than initially budgeted.

First gas delivered for Sable project

First sales gas delivered into the Maritimes & Northeast Pipeline completed ExxonMobil’s $2-billion Nova Scotia, Canada, Sable Offshore Energy Project. It consisted of three offshore platforms, a 125-mi subsea pipeline, natural gas-processing and fractionation plants, and a 650-mi gas sales pipeline to New England.

Angola’s first deepwater field onstream

Chevron’s 1,560-sq-mi Kuito field in Block 14 offshore Cabinda Province, Angola, came onstream in mid-December at 45,000 bpd. Combined with ongoing production from Block O, Kuito output raises Chevron-led production to a record level of 519,000 bopd. Peak production from Kuito is expected to be 100,000 bpd by the end of March.

New commercial Dutch gas field

TransCanada PipeLines and Gulf Canada Resources’ G17-4 wildcat tested 40 MMcfgd. The well is located in the Dutch sector of the North Sea. A development application will be submitted to the Dutch authorities, with production targeted for early 2002. Partners in the well are TransCanada International (Netherlands) B.V. and Clyde Petroleum Exploratie B.V.

FROM THE ARCHIVE