Independents and big three unite on North Slope: exploration and production are 'more robust' this year than recent past.

• Author: Liles, Patricia
• Position: OIL & GAS

Alaska's North Slope oil fields are entering a new phase of increased activity--one in which independents are working beside and with the three majors that currently produce the flow of oil from the maturing resource-rich region.

"It's certainly looking more robust than it has for a number of years," said Paul Laird, general manager of the Alaska Support Industry Alliance. "Look at the difference in oil price and the oil price outlook versus five years ago."

Recent new players to the North Slope fields include Shell Offshore, Talisman Energy's subsidiary FEX, Kerr-McGee, Chevron, Pioneer Natural Resources, a subsidiary of Italy's based Eni SpA, and a joint venture spearheaded by Alaska Venture Capital Group and its subsidiary, Brooks Range Petroleum. In addition, Anadarko Petroleum continues to work with its North Slope partner, ConocoPhillips, as well as on its own prospects.

The winter exploration season for 2007 that just concluded is wrapping up to be one of the most active periods in recent years. Exploration drilling and development work ranged from the far western prospects in the National Petroleum Reserve-Alaska to continued evaluation work by BP Alaska on its Liberty prospect, located east of the North Slope's mammoth-sized maturing field, Prudhoe Bay.

"What we believe very strongly is that we have a huge known resource base in a couple of areas," said Daren Beaudo, spokesman for BP Alaska. "We don't have to look for more oil to have a long-term robust business for many years. We here at BP talk about our 50-year future ... exploring the known and developing the known through technology."

While BP and the other two majors on the North Slope, ConocoPhillips and ExxonMobil, continue to invest in those known resources-nearby pockets of light oil, expansive resources of viscous and heavy oil and the future of natural gas commercialization--new explorers are looking at other prospects on the North Slope.

Those new explorers are investing in substantial work, including seismic and drilling projects, in an effort to find new oil resources on the North Slope, while the actual flow of crude is falling to less than half of its peak of nearly 20 years ago.

Back in the late 1980s, the 800-mile long trans-Alaska oil pipeline carried a little more than 2 million barrels of oil each day from the North Slope to Valdez, where ocean-going tankers then hauled Alaska oil to Lower 48 refineries.

Now, that flow has slowed to less than 800,000 barrels per day, and industry experts expect a continued decline that can only be reversed with development of a natural gas pipeline.

"I think everything hinges on what happens with gas commercialization. If that gets resolved favorably and investment picks up, not only by independents but also the majors, I absolutely see (oil) production going up," Laird said. "If the three major...