Anadarko Petroleum Corp. is buying BP America Production Co.‘s 93% interest in the Wattenberg Processing Plant for $575.5 million. The plant in Adams County in northeast Colorado can process up to 195 MMcf/d of natural gas and 15,000 b/d of natural gas liquids and gas condensate. Upon closing Anadarko will operate and have 100% ownership. Anadarko volumes represent about 70% of plant throughput, said Chuck Meloy, Anadarko senior vice president of worldwide operations. “We are the largest producer in the Wattenberg field, with current sales volumes of approximately 63,000 boe/d, and our early efforts in the emerging horizontal Niobrara play are very encouraging,” Meloy said. The transaction is expected to close by mid-year, subject to regulatory approvals and contractual conditions.

BP plc said it remains committed to finding a way to resolve differences with its Russian partners after an arbitration tribunal extended an injunction of a historic stock swap and alliance with OAO Rosneft. In January BP and Rosneft, which is Russia’s state-controlled oil company, announced a strategic alliance that involved a stock swap and deal to jointly explore Russia’s Arctic region worth an estimated $7.8 billion (see NGI, Jan. 17). However, BP also has exploration agreements in place with Russia’s billionaire partners in a 50-50 alliance with TNK-BP, and they stepped in to dispute the Rosneft agreement. An arbitration tribunal was convened to resolve the issues, ruling in favor of AAR. BP said it intends to apply for a determination as to whether the stock swap with Rosneft, minus the exploration alliance, may proceed on its own. It has until April 14 to complete the stock swap in its current form.

The Federal Energy Regulatory Commission has given Florida Gas Transmission (FGT) the green light to place into service the remaining facilities associated with the $2.45 billion Phase VIII Expansion to serve gas-fired power generators and utilities in Florida. The remaining facilities include “Loops 1 and 11; Greenfield Laterals 1 and 3; modifications to compressor stations 11, 12, 13, 14, 15, 24, 26 and 27; new compressor station 29; and the Progress Energy Meter and Regulator (M&R) Station, the Transco-Citronell M&R Station and the Suwannee Lateral Regulator Station,” the FERC order said [CP09-17]. The Phase VIII Expansion Project, which FERC approved in November 2009, adds more than 483 miles of pipeline loops, laterals and mainline and installs 213,600 hp of compression at eight existing stations and one new compressor station (see NGI, Nov. 23, 2009). The project also called for FGT to acquire the existing 22.7-mile Martin Lateral from Florida Power & Light Co. (FPL), which will serve power plants located in Manatee, Martin, Miami-Dade and Suwannee counties, FL. The Phase VIII Expansion is intended to create 820,000 MMBtu/d of capacity on FGT’s system from Alabama to Florida. The expansion’s Phase 1 facilities, which involved the construction and operation of facilities to serve FPL’s Manatee Power Plant, went into service in mid-2010. Phase 2 service is scheduled to start by April 1. FGT proposes to transport natural gas to five other shippers: Florida Power Corp./Progress Energy Florida Inc.; Seminole Electric Cooperative Inc.; Tampa Electric Co.; the Orlando Utilities Commission; and the City of Tallahassee.

Houston-based Vanguard Natural Resources LLC has made an offer valued at about $567 million to buyout the remaining stake of Encore Energy Partners LP (ENP), about 54%, that it doesn’t already own. Based on Vanguard’s offer, ENP is valued is about $1.05 billion. ENP formerly was affiliated with Fort Worth, TX-based Encore Acquisition Co., which created the partnership in 2007. Denbury Resources Inc. in March 2010 completed a $4.5 billion transaction to purchase Encore Acquisition. Vanguard in turn paid Denbury $380 million to buy a 46% stake in ENP, which included the full interest in the general partner and a 54% stake in the common units of the master limited partnership (see NGI, Nov. 22, 2010). If the latest transaction is approved ENP would become a subsidiary of Vanguard.

Despite continuing uncertainty over the world economy, optimism is running high that salaries at oil and gas companies will increase over the next year, according to the 32-page survey “Oil & Gas Global Salary Guide 2011” issued by Oil and Gas Job Search and Hays plc, a recruitment and consulting firm based in Sydney, Australia. More than 10,800 people were polled for the survey — including more than 3,900 identified as employers in the industry — from more than 50 countries between September and October 2010. Although just under half of survey respondents said their salaries had increased within the last year, three-fourths said they believe salaries will increase within the next 12 months. Of those, 21.6% believe salaries will climb 10% or more. By comparison, in 2010 only 42% of respondents thought salaries would go up in a year. The survey found that the average annual salary at oil and gas companies in the United States totaled $117,000 in 2011, but the global annual average salary was $75,813, an amount relatively unchanged from 2010. The top five countries in salary were, in order, Australia, Norway, Canada, the Netherlands and the United States. Average annual salaries ranged from a low of $23,300 for maintenance workers with less than five years experience to a high of $146,400 for employees in the business development and commercial sectors with more than 20 years of service. Meanwhile, workers at oilfield services companies with less than five years experience were paid the lowest average annual salary of $39,200, while operator company employees with more than 20 years experience were paid a high of $141,300. The average global salary for those entering the industry ranged from $35,000 to $45,000.

A pipeline project to deliver Marcellus Shale ethane from Pennsylvania to Canadian markets is under way by MarkWest Liberty Midstream & Resources LLC and Sunoco Logistics Partners LP. Project Mariner West would deliver ethane from MarkWest Liberty’s Houston, PA, processing and fractionation complex to Sarnia, ON. The pipeline is being developed “at the request of Marcellus producer customers and is supported by Sarnia ethane consumers,” said MarkWest Liberty, which is a partnership of MarkWest Energy Partners LP and The Energy & Minerals Group. The Mariner West pipeline would use new and existing pipelines to transport up to 65,000 b/d of ethane by the second half of 2012. Mariner West is an expansion of Project Mariner, designed to transport ethane produced in the Marcellus Shale to U.S. Gulf Coast and international markets by mid-2013 (see NGI, June 7, 2010). To support ethane deliveries to Canadian markets in 2012, “minor modifications” are to be made to the MarkWest Liberty processing complex and a 25-mile pipeline from the complex would be built to an interconnection with an existing Sunoco Logistics pipeline at Vanport, PA.

The Pennsylvania Department of Environmental Protection (DEP) has ordered Chesapeake Energy to stop work on a natural gas drilling well pad in rural Potter County for failing to implement required erosion and sediment controls. Chesapeake was ordered to correct by Tuesday (March 29) the existing violations at the Beech Flats well pad, which is located in West Branch Township in northern Pennsylvania, and review and revise as appropriate its erosion and sediment control plan, DEP said. DEP had issued a notice of violation for several infractions of the state’s Clean Streams Law and Oil and Gas Act following a routine site inspection in early March. According to DEP, Chesapeake did not respond to that notice and, during follow-up inspections, DEP staff discovered additional violations and impacts resulting in the order to cease work at the well pad. The well site’s erosion and sediment control plan was insufficient for recent snowmelt and precipitation in the area, according to a Chesapeake spokesman, who said the company is working with DEP to quickly rectify the situation.

The state of Pennsylvania has filed criminal charges against a Greene County business owner for allegedly dumping millions of gallons of wastewater — including Marcellus Shale drilling fluids — into local streams. The state Attorney General’s office filed 98 criminal charges against Robert Allan Shipman and 77 charges against his company, Allan’s Waste Water Service, for illegally dumping wastewater between 2003 and 2009. If convicted on all charges, Shipman could face prison time as well as a $1.5 million fine, and his company could be on the hook for another $1.2 million.

A Colorado family alleges in a lawsuit that natural gas driller Antero Resources and contractors Frontier Drilling and Calfrac Well Services contaminated their drinking water supply and air, which forced the couple and their two children to abandon their home. The lawsuit, which was filed in Denver District Court, claims negligence by the drilling operations; the family is seeking damages to cover medical costs and health monitoring. According to the Colorado Oil and Gas Conservation Commission (COGCC), tests previously conducted on the plaintiff’s water well showed no chemical contamination that could be attributed to gas drilling. However, the plaintiffs claim that independent tests of the water well were found to be “abnormal.”

The Washington Utilities and Transportation Commission (UTC) has filed a complaint against Cascade Natural Gas Co. alleging “serious safety violations” in the operation of the utility’s natural gas distribution system in parts of the state. The Kennewick, WA-based MDU Resources Group utility contends that its system is safe, although it does not dispute the allegations, a company spokesperson told NGI. UTC staff cited more than 364 violations of what it characterized as many different gas safety rules and recommended a unspecified penalty be imposed. UTC may impose penalties of up to $100,000 for each violation of gas safety rules with a limit of $1 million for related violations. UTC staff conducted a two-year investigation involving five Cascade operating districts, and some of what the staff called the “more significant alleged violations” involved the utility’s operating gas pressures being at higher than allowed levels; not performing regular leak detection surveys; and failing to inspect for pipeline corrosion every three years. Cascade Natural Gas serves nearly 200,000 residential and business customers in 65 communities throughout Washington state. It has 4,436 miles of gas distribution and transmission pipelines in the state that are regulated by the UTC.

Occidental Petroleum Corp. and affiliates Occidental Oil and Gas Corp. and OXY USA Inc. have agreed to pay the federal government $2.05 million to resolve claims that they knowingly underpaid royalties owed on natural gas produced from federal leases, the Department of Justice (DOJ) said. The settlement resolves claims that the Occidental companies improperly deducted from the royalty values they reported the cost of boosting gas up to pipeline pressure, and failed to properly report and pay royalties related to a natural gas keep-whole agreement, pool pricing for gas and gas resold to affiliates, DOJ said. The settlement arises from a lawsuit filed by Harold Wright under the False Claims Act against the Los Angeles-based Occidental companies as well as a number of other producers. The current settlement brings the total recovery in the case to approximately $230 million (see NGI, April 12, 2010).

Seal Beach, CA-based Clean Energy Fuels Corp. has contracted with Dallas-based national truck fleet operator Dillon Transport to build, operate and supply fuel to a natural gas fueling station on Dillon’s property in Dallas. The station will provide both liquefied natural gas (LNG) and compressed natural gas (CNG) for transportation use. The facility, which Clean Energy expects to have operating by the third quarter, will be a public CNG/LNG fueling station open 24/7. Clean Energy, a T. Boone Pickens-founded natural gas transportation supplier, will provide all of the gas supplies dispensed at the station.

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