A Review of the Nigerian Energy Industry

ConocoPhillips plans new Alaskan well

conocophillips_logo12 August 2013, News Wires – ConocoPhillips has applied for permits to develop a new field in Alaska’s National Petroleum Reserve, a vast unit of federal land that has yet to yield commercially-produced oil, according to a Reuters report.

The US major has applied to drill a production well at a site known as GMT1, part of the Greater Mooses Tooth unit established in an area where its exploration wells struck oil, Bureau of Land Management, BLM, spokeswoman Erin Curtis said.

The company has also applied for a permit to build roads and other infrastructure needed to access the site, Curtis said.

ConocoPhillips Alaska spokeswoman Amy Burnett said a decision by senior corporate leaders on whether to sanction the project was anticipated in the second half of next year.

The Indiana-sized reserve, on the western side of the North Slope, was established in 1923 by President Warren Harding to provide fuel to the military, Reuters said.

However, the big North Slope oil discoveries and all production to date have been east of the reserve on state land in and around the Prudhoe Bay and Kuparuk fields.

ConocoPhillips, with minority partner Anadarko Petroleum, aimed to change that pattern and produce oil from federal land on the North Slope. They have been the most active explorers in the reserve since the BLM launched a series of lease sales in 1999.

The companies are developing another field – CD-5 – on the far eastern edge of the reserve that is expected to come on line in 2015. The field would be linked by pipeline and a road to the ConocoPhillips-operated Alpine field under the company’s plan. The project’s construction is expected in the winter of 2014, Burnett said.

According to Reuters, CD-5’s development was delayed by a dispute over a wetlands-fill permit needed to build the road, pipeline and an aircraft landing strip. The Army Corps of Engineers then issued it a permit in late 2011 after ConocoPhillips, the Fish and Wildlife Service and other organisations negotiated a compromise plan.

Expansion at GMT1 was eased by the planned CD-5 development, Burnett said in an email to Reuters, adding that a recent controversial cut in state oil taxes also helped.

The plans to expand in the reserve come after ConocoPhillips put ambitious offshore Arctic plans on the back burner. The company said in April it would not seek to drill in 2014 in the remote Chukchi Sea off north-western Alaska, where it spent more than $500 million in 2008 to acquire leases.

Other companies also have plans to drill in the reserve. Three permits are held by Australia-based Linc Energy and two by Houston-based Hilcorp, both relatively new operators in Alaska.

The US Geological Survey has estimated the sprawling reserve contains 896 million barrels of technically recoverable oil. It is also home to wildlife and considered by the region’s native Inupiat people to be an important area for fishing and hunting.

The BLM plans another lease sale in November, the ninth in the series that started in 1999. Curtis said the level of industry interest was as yet unclear.

– Upstream

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