Awarded

Murphy Oil Corp.’s E&P subsidiary has awarded a contract to J. Ray McDermott Inc. to construct a Floating Production System for the Front Runner Project, designed to handle 60,000 bbl/d and 110 MMcf/d from the Gulf of Mexico. Murphy operates the project and owns 37.5% with partners Dominion Exploration & Production Inc., (37.5%), and Spinnaker Exploration Co., (25%). The Front Runner partners have approved a plan for the development of the area utilizing a Truss Spar type Floating Production System. They continue to evaluate export pipeline options. Targeted first production for the project is the first half of 2004. SparTEC Inc., a wholly owned subsidiary of McDermott, will be the general contractor responsible for the engineering, procurement, construction and installation of the Spar. The Front Runner Project is located in 3,500 feet of water on Green Canyon Blocks 338 and 339 in the Central Gulf, approximately 135 miles south-southeast of Houma, LA. The initial discovery well reached a total depth of 22,925 feet in March 2001.

FERC yesterday awarded Florida Gas Transmission (FGT) a certificate to incrementally expand its existing 1.7 Bcf/d natural gas transportation system to 2.1 Bcf/d.

BJ Services and Precision Drilling were awarded a major fielddevelopment contract by Petroleos Mexicanos (Pemex). The projectentails the drilling and completing of 240 gas wells in the BurgosBasin, which covers more than 21,000 square miles and is located inthe northeastern part of Mexico near Camargo.

BJ Services and Precision Drilling were awarded a major fielddevelopment contract by Petroleos Mexicanos (Pemex). The projectentails the drilling and completing of 240 gas wells in the BurgosBasin, which covers more than 21,000 square miles and is located inthe northeastern part of Mexico near Camargo.

Utilicorp United’s Aquila Energy subsidiary was awarded afive-year contract to supply the power needs of Alcoa’s aluminumsmelting facility in Badin, NC. Under the contract, Kansas City,MO-based Aquila will provide risk management for both power and theimpact of weather on the energy production of Alcoa’s generatingunits. Aquila also will support the plant with the power it needsto operate its smelter 24-hours a day, seven days a week, throughthe optimizing of Aquila’s supply, Alcoa’s own generation, and themarket. “This agreement provides a stable and consistent powersupply for Alcoa’s base load energy demand, while effectivelymitigating the weather-related variability of its generatingcapacity,” said Tripp Dunman, senior director of IndustrialOrigination for Aquila.

Seeking to set aside what it called an “inappropriate” multi-billion verdict in which a jury awarded the State of Alabama $87 million in compensatory damages and $3.4 billion in punitive damages over unpaid royalty fees, ExxonMobil Corp. has filed an appeal with the Circuit Court of Montgomery County, AL. The case, decided last month, centered on charges that the energy giant (then Exxon, before its merger with Mobil) had underpaid up to $87.7 million in royalties on the Mobile Bay natural gas project in the Gulf of Mexico (see NGI, Dec. 25, 2000). The jury said it set the damages by tripling ExxonMobil’s annual production from 13 natural gas wells located on the Alabama coast in the disputed time. The long-standing contract dispute originally questioned whether an additional $40 million in royalties was due the state and exactly how the royalties should be calculated. To date, ExxonMobil said it has paid Alabama $1 billion in royalties and bonus payments under the lease agreement. “ExxonMobil believes that if this verdict goes unchallenged, other legitimate businesses in the state of Alabama – businesses that, like ExxonMobil, help expand the tax base, add to the economy and create new jobs – will also be potential targets,” the company said in a written statement. “Any company engaged in an open and reasonable contract dispute in the state will not be able to have reasonable disagreements with regulators without running the risk of being accused of fraud and being subjected to possible punitive damages.”

Seeking to set aside what it called an “inappropriate”multi-billion verdict in which a jury awarded the State of Alabama$87 million in compensatory damages and $3.4 billion in punitivedamages over unpaid royalty fees, ExxonMobil Corp. filed an appealyesterday with the Circuit Court of Montgomery County, AL.

FERC last week awarded a preliminary determination on non-environmental issues to Florida Gas Transmission (FGT) for its latest project to expand its existing 1.4 Bcf/d of transportation capacity by nearly one-third.

FERC yesterday awarded a preliminary determination onnon-environmental issues to Florida Gas Transmission (FGT) for itslatest project to expand its existing 1.4 Bcf/d of transportationcapacity by nearly one-third.