Pump Industry Analyst May 1999

Arco's executive management to consider options for closer co-operation between the two companies.

BP Amoco said the US$1 billion synergies, which are on top of the US$500 million cost-savings already targeted by Arco, will be achieved from a mix of organisational effi- ciencies, more focused explo- ration, improved business processes including IT, and rationalisation of operations.

ARCO INVESTS IN INDONESIA

The Indonesian government has approved Arco's acquisi- tion of the Muriah block off- shore central Java, which includes the Kepodang nat- ural gas field.

The block, to be operated by a wholly owned subsidiary Atlantic Richfield Muriah, is held under a production-shar- ing contract with Pertamina, the state oil and gas company. The block covers 7200 square kilometers in the Java Sea and was previously operated by a subsidiary of Shell.

Kepodang, which was dis- covered in the early 1980s and later confirmed by Shell with the Keladi-I well and a high resolution seismic programme, is estimated to hold in excess of 400 billion cubic feet of natural gas.

BP AMOCO SIGNS NEW SUEZ DEAL

BP Amoco has signed a new concession agreement with the Egyptian Government, which will help maintain investment in the country's mature Gulf of Suez oil fields, despite current low prices.

Under the agreement, BP Amoco will invest US$450 million over the next six years to maintain production and prolong the life of the fields, BP Amoco, in a joint venture with the Egyptian General Petroleum Company (EGPC), currently produces 300 000

gross barrels of oil per day from the Gulf of Suez.

PROGRESS ON MACHINERY

MERGER A Ahlstrom Corporation, the Finnish paper and engineer- ing group, and Kvaerner, the Anglo-Norwegian engineer- ing and construction group, have signed a definitive agreement to merge their pulp and paper machinery activities (see Pump Industry Analyst, February 1999).

The name of the new com- pany, which will be headquar- tered in Helsinki, will be announced once the registra- tion process is complete. It will have its own market identity independent of either Kvaerner or Ahlstrom.

The merged company will provide technology, equipment and services, primarily to the pulp and paper industry, but also to other process industries worldwide. It will combine the principal activities of Kvaern- er's Pulp & Paper business, excluding power boilers, and the panel systems division, with Ahlstrom Machinery Group. The estimated annual revenues of the newly merged business will amount to US$1.2 billion.

SAPPI RATIONALISES FURTHER IN US

Paper company Sappi Limit- ed is to close its pulp mill at its facility in Westbrook, Maine.

The closure will take effect in late June 1999. In making the decision to close the pulp mill, company officials cited a pending requirement to spend approximately US$50 million to bring the pulp mill into com- pliance with US Environmen- tal Protection Agency (EPA) regulations by 2001.

Sappi executive chairman Eugene van As said the

expenditure could not be justi- fied as it would not improve the competitiveness of the already high cost pulp mill.

KIMBERLY- CLARK CUTS

PULP EXPOSURE Kimberly-Clark Corpora- tion has agreed to sell its pulp mill in Miranda, Spain, to Rottneros AB, a Swedish pulp manufacturer.

The agreement is another step forward in Kimberly- Clark's plan to reduce its level of pulp integration.

"Pulp is a cyclical and cap- ital-intensive business that no longer corresponds with our focus on consumer and health care brands," said Wayne R Sanders, chairman and chief executive officer of Kimberly- Clark Corporation.

Kimberly-Clark is reduc- ing its dependence on internal- ly produced pulp in order to focus its resources on the con- tinuing expansion of its three global businesses: tissue, per- sonal care and health care. Since 1997, the company has sold a pulp and newsprint operation in Coosa Pines, Alabama, and announced the planned closure in September 1999 of its pulp mill in Mobile, Alabama. Kimberly- Clark also plans to sell its pulp mill in Terrace Bay, Ontario, but will continue to operate pulp mills in Everett, Wash- ington, and Pictou County, Nova Scotia.

PETRO- CHEMICALS

MOBIL CHEMICAL PLANT WINS NPRA'S TOP

SAFETY AWARD Three US petrochemical manufacturing facilities have received the National Petro- chemical & Refiners Associa- tion (NPRA) 1998 Distin- guished Safety Award.

The Association's most prestigious award was present- ed to Mobil Chemicals' Hous- ton Olefins Plant, Exxon Chemical Company's Baton Rouge Plastics Plant and El Dupont de Nemours' Sabine River Works. The award is given only to plants that display a superior level of safety perfor- mance and is based on a thor- ough evaluation of the facili- ties' safety programme, as well as their current and past safety record. To be considered for the award, a facility must have a total recordable incident rate of 1.0 or less for an evaluation period of 200 000 hours, and must have no fatalities or lost workday cases for two evalua- tion periods. The facility's over- all performance history over three evaluation periods, its contractor safety performance and a written description of the facility's safety programme are also evaluated.

KVAERNER UNVEILS RADICAL

RESTRUCTURING PLAN

Kvaerner, the Anglo-Norwe- gian engineering and con- struction group, is to with- draw from shipbuilding.

In a move designed to return to profitability and to regain financial strength, Kvaerner is restructuring its global activities, and will exit from all loss-making business- es. The programme of dispos- als and down-scaling will reduce business volume by NKr25 billion and employees by 25 000 to NKr55 billion and 55 000 respectively.

The major yards may be spun off to shareholders, with the remaining yards sold indi- vidually. The shipbuilding business area has a turnover of NKrl2.5 billion, and employs 10 000 people in 13 yards.