Alaska oil-search plans favor western North Slope
Date: 30-Nov-01
Country: USA
Author: Yereth Rosen
Phillips Petroleum Co. unit Phillips Alaska Inc. and its partner in some of the North Slope development, Anadarko Petroleum, plan a busy season of exploration drilling in the National Petroleum Reserve-Alaska, west of Prudhoe Bay and Kuparuk, the nation's biggest oil fields.
Phillips, which last year acquired Atlantic Richfield's Alaska assets, appears eager to continue Arco Alaska Inc.'s successes in the area.
The company has applied for permits to drill about a dozen exploratory wells in the federal petroleum reserve, said Ed Bovy, a spokesman for the U.S. Bureau of Land Management.
Phillips will likely drill up to six of the sites, depending on what weather and equipment allow, Bovy said. Anadarko, too, is seeking permission to drill its own well there, said Steve Schmitz, natural resource officer for the Alaska Division of Oil and Gas.
Phillips and Anadarko have also applied for permits to drill wells on state land south of the Kuparuk field, Schmitz said.
The key areas of planned exploration are well west of Prudhoe Bay.
"That's where the action is," said Chuck Logsdon, chief petroleum economist for the Alaska Department of Revenue.
The region is on the opposite end of the North Slope from the Arctic National Wildlife Refuge, where the Bush administration wants to allow oil drilling. Environmentalists and many Democrats oppose drilling there, and some have argued that oil companies should concentrate instead on the National Petroleum Reserve-Alaska.
The 23 million acre (9.3 million hectare) reserve sprawls from the Colville River, about 60 miles (98 km) west of Prudhoe Bay, to the Chukchi Sea coastline of northwestern Alaska. It was explored sporadically, mostly by government agencies, starting in the 1940s, but was not considered a serious prospect until recently.
In 1999, the BLM held a lease sale in the area, offering about 4 million acres (1.62 million hectares) in the northeast corner. The sale drew $104.6 million in bids.
In May, Phillips Alaska President Kevin Meyers told an Anchorage audience that the company had found significant accumulations of oil and gas condensates at three prospects in the reserve.
But BP Exploration Alaska Inc., which explored the petroleum reserve last winter, has no plans for drilling there this winter, said company spokesman Ronnie Chappell.
BP, a unit of Britain's BP Plc , announced in August that it would not return this year to the reserve, and is concentrating instead on prospects near existing production, he said.
"We expect to participate in a number of exploratory wells around existing fields," he said. Though there has been no final decision on numbers, it will probably be "on the order of two to three," he said.
BP has in the past concentrated its searches for new oil on the eastern North Slope. But the company has had disappointments there.
Its Sourdough discovery, near the border of the Arctic National Wildlife Refuge, is too small to be commercial as a stand-alone development, for example.
And its Badami field, located about 30 miles (50 km) east of Prudhoe Bay, is producing below expectations, only 2,50 0 barrels a day.
The experience contrasts with those of Phillips and predecessor Arco on the western North Slope.
In 1995, after several years of exploring the Colville River Delta area, Arco and its partners at the time, Anadarko and Union Texas, announced the discovery of the 430 million-barrel Alpine field on state land about 30 miles west of Kuparuk.
Alpine is now the North Slope's westernmost operating field. Production started last year and is now at 92,000 barrels a day, above earlier expectations of 80,000 barrels, Phillips spokeswoman Dawn Patience said.
Industry and state officials consider Alpine a state-of-the-art facility that can be used to help launch development of nearby satellite fields, two of which have already been discovered.
"Alpine was kind of the kicker to moving further west," Logsdon sa
