North slope exploration and development: ramped up activity with passage of SB21.

AuthorLavrakas, Dimitra
PositionOIL & GAS

The State of Alaska Department of Revenue reported in its Revenue Resources Book on December 5, 2013, that it forecasted a $2 billion drop in all oil and gas revenues for fiscal year 2014, which ends June 30, 2014. On the surface, that's troubling because that revenue is what supports a big chunk of Alaska's unrestricted general fund revenues. However, there are some who are right now positively bullish on the North Slope's oil and gas industry.

Dave Lachance, vice president, reservoir development, for BP Exploration (Alaska), Inc., on November 20, the first day of the Alaska the Resource Development Council's annual Alaska Resources Conference, said, "One number I want you to remember: 80 billion. Eighty billion barrels of discovered

hydrocarbons on the North Slope sits in two oil fields, Prudhoe Bay and Kuparuk. The thing to realize is you have two main fields, and a massive number. Elsewhere in the world, it's a giant if it's half a billion. If you added all of the [other] fields I've ever worked on in my thirty-five years, they wouldn't add up to 80 billion barrels."

With that optimistic perspective, here's a look at what oil companies have planned for the coming drilling season of 2014.

Kuparuk Still Brings Them Up

In November, ConocoPhillips Alaska announced it would add another drill rig to Kuparuk River field on the North Slope.

"This is the second rig that will be added to Kuparuk's rig fleet since last spring when SB21, the More Alaska Production Act, was passed by the Legislature," the company announced in a press release. "Nabors 9ES will begin drilling at Kuparuk in January. It joins Nabors 7ES, which has added production of 1,600 barrels of oil per day since it began working in late May."

Combined, the two rigs will employ about two hundred people directly and support hundreds of indirect jobs, says the company.

Upon the passage of SB21 by the Alaska State Legislature last year, the company also announced plans to pursue two new projects on the North Slope. The two projects: Greater Mooses Tooth No. 1 in the National Petroleum Reserve-Alaska and Drill Site 2S in the Kuparuk River Unit.

"These are the projects we want to move forward," says Natalie Lowman, director of ConocoPhillips media relations in Alaska.

Lowman says the company has to approve the funds for the projects to begin.

ConocoPhillips Alaska President Trond-Erik Johansen said the newest rig would start producing in January, but it's not as easy to extract oil from...

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