BP hopes Egypt gas find will lead to more

London (Reuters) -
Oil major BP, which yesterday announced a "significant" gas find in its offshore North Alexandria concession in Egypt, said it was hopeful of further successes.

BP Egypt, operator of the block, announced that Fayoum (L-1x) well, drilled with its German partner RWE, tested at a rate of 21 million cubic feet per day (594,600 cubic metres) from the main target zone and at 6 million cubic feet per day from a secondary, siltier zone.

"We're drilling Libra-1 (well) at the moment and there will be one more in the area this year, and one in the West Mediterranean Deepwater concession towards the end of 2001," a BP official told Reuters.

Fayoum was the second discovery on the block after Taurus-1 also successfully tested gas last year, although figures on estimated reserves have not been announced, he said. "The commerciality issue will follow after the drilling campaign is over...We are very hopeful," he said when asked about the commercial prospects of the block.

BP said preliminary estimates showed the well, in 400 metres of water some 35 kilometres from Egypt's north coast, proved combined reserves of 600 billion cubic feet (17 billion cubic metres) gross from the two zones.

"Clearly, one well doesn't complete the picture but we are very hopeful. The picture will become clearer as the year goes on," the BP official said. Some analysts expressed surprise that the company had announced estimated reserves from the one well discovery.

An analyst specialised in Egypt's upstream who asked for anonymity described the Fayoum find as "a good discovery" but it depended on what else the block would yield. In comparison, BG International's block to the north of BP's concession was estimated to hold reserves of between 7-9 trillion cubic feet of gas.

BP Egypt has a 60 percent stake in the North Alexandria concession while RWE, the second largest utility in Germany which acquired its share from Spanish firm Repsol, has 40 per cent. Egypt has proven gas reserves of 50 trillion cubic feet (1.416 trillion cu metres), a figure which is expected ultimately to reach 110-120 trillion.

Petrobras oil leak wreaks havoc in residential neighbourhood

Sao Paulo (Reuters) -
Brazilian oil giant Petrobras said yesterday a break in its Paulinia pipeline a day earlier dumped 220,000 liters (58,000 gallons) of fuel oil in a residential neighbourhood. The spill, which occurred Wednesday morning 30 kilometres from the city of Sao Paulo, follows two unexplained and unclaimed oil spills in the Campos Basin off the coast of Rio de Janeiro state.

A spokeswoman said the state-owned company had not yet identified the cause of the leak. Petrobras had already contained the spill with a crew of 600 that placed barriers to prevent contamination of the Tiete River, the biggest river in Sao Paulo state. Clean-up should be complete by today, the spokeswoman said.

The pipe burst near a posh residential neighbourhood in the town of Barueri and black ooze rained onto picture-perfect green lawns and sky-blue swimming pools. The spokeswoman added that transport through the pipeline, between the Paulinia refinery and Barueri terminal, had been suspended. Paulinia is capable of refining 352,000 barrels of oil per day.

Wednesday's spill was the third reported by Petrobras this month. A week ago, Petrobras shut down 12 offshore rigs after detecting an oil slick on the ocean surface in the Campos basin. Output at 13 offshore platforms was stopped for days a week earlier.

But Petrobras has said that it is not at fault for the two prior spills. Investigations showed that the kind of oil skimmed off the ocean was not the same type of oil produced in the Campos basin.

Monica Araujo, an oil sector analyst for BES Securities, said those two spills may have resulted from ships passing or docked in the area. But Wednesday's accident appeared to rest on Petrobras' shoulders.

"This is a consequence of the important growth in Petrobras' production. If you look at the company's last investments, you can tell that there was an explosive increase in exploration but not in maintenance and control," Araujo said.

The state-run company suffered its most embarrassing accident this March, when a series of blasts that killed 11 people sank the P-36 -- the world's largest offshore oil platform. Last year, Petrobras caused an oil spill of 1.3 million liters (345,000 gallons) in Rio de Janeiro's world-famous picturesque Guanabara Bay and another one of four million liters in the Rio Iguacu in Parana state.

Kuwait's Shuaiba refinery set to resume full operations

Kuwait (Reuters) -
Kuwait's Shuaiba refinery will resume operations next week with an output of 200,000 barrels per day (bpd) after a 40-day full refinery turnaround, executives said yesterday.

One said Shuaiba, the smallest of three domestic refineries, will come back on stream between June 4-June 6 and will operate at its full capacity of 200,000 bpd. The plant was shut down on schedule on April 28 for standard repairs performed every five years.

Operations at Shuaiba were not affected last year when two Kuwaitis were killed in an explosion at the refinery while trying to start a unit damaged in the 1990-91 Iraqi occupation. The country's largest refinery, the 450,000 bpd Ahmadi, was forced to close in June 2000 when six people were killed in a huge explosion.

It is now operating at around 300,000 bpd while Mina Abdullah has a capacity of 265,000 bpd. In a financial statement to the country's parliament, KPC said it plans to run the three domestic refineries at around 759,320 bpd in the fiscal year which started on April 1.

The detailed statement, obtained by Reuters, shows plans to run Ahmadi at 338,673 bpd during the April-March 2002 fiscal year, Mina Abdullah refinery producing at 250,033 bpd while Shuaiba refining 170,614 bpd.

Maersk to partly resume North Sea production at weekend

Copenhagen (Reuters) -
Danish oil and shipping conglomerate A.P. Moeller hopes to resume some of its 120,000 bpd North Sea oil production, which was halted 11 days ago due to a gas explosion, the Danish Energy Agency said yesterday.

"There are considerations about resuming some of the production this weekend. We are thinking about it and will meet with Maersk on Friday," an agency spokesman said. The gas explosion occured on May 20 on the Gorm Field, where production was halted immediately as well as on its four satellite fields Halfdan, Skjold, Rolf and Dagmar.

In all, the five fields produced 120,700 barrels per day in April or 40 per cent of Danish Undergrund Consortium's (DUC) total production of 302,200 bpd. The cause of the explosion was likely corrosion in the pipeline caused by injection of scavenger, a product preventing gas turning sour, Maersk said in a report, the spokesman said.

"We will try to resume production as soon as possible particularly in the Halfdan Field," Moeller's Maersk Oil deputy manager Bo Wildfang told Reuters but declined to give any specific date. The Halfdan field produced 43,000 barrels of oil per day in April.

A.P. Moeller operates and owns