Cook Inlet producers are under pressure: exploration for natural gas and oil continues in Cook Inlet as current reserves dwindle.

• Author: Campbell, Melissa

Recent studies suggest the known natural gas reserves in the Cook Inlet region will be all but gone within 10 years, at best. This is the stuff that heats most homes and businesses throughout Southcentral Alaska. A fertilizer plant in Kenai depends on the gas supply to make its products. A Nikiski plant turns Cook Inlet gas to a liquid and ships the concoction to overseas markets.

As things stand today, both plants may lose their main source of gas within a few years. The cost of heating homes will skyrocket.

Unless, that is, more is found soon.

That puts a bit of pressure on natural gas and oil leaseholders working in the Cook Inlet Basin.

The state Department of Natural Resources holds competitive bids for lease every May. DNR's Division of Oil and Gas currently has 17 companies on a list of leaseholders in the Cook Inlet area. Several individuals also hold leases, but aren't actively exploring or producing, according to the division. At least one company sold its interests in the area. Anadarko Petroleum Corp. sold its stake to Aurora Power. An Anadarko spokesman said the company wanted to put more focus on oil efforts on the North Slope.

For the last couple of years, companies have invested millions of dollars into exploration ventures to find new natural gas reserves in the area.

Throughout Alaska, Marathon Oil Co. in 2003 plans to spend roughly $75 million--the company's largest Alaska budget since the mid-1980s. A sizable chunk of that money will go toward exploration in Cook Inlet, said John Barnes, the Alaska business unit manager.

"Four or five years ago, there were no exploration wells, at least not enough to replenish the reserves in the inlet," Barnes said. "We really need more people looking for gas. Some independents came in, but the best measure is the activity level, and you don't have a whole bunch of drilling rigs out today."

Marathon is trying to do its share. The company currently is conducting a 3-D seismic survey in the Sterling area and is obtaining permits to begin a survey in the Ninilchik area. It also plans to begin explorations in the Kasil of Prospect this fall.

In conjunction with Unocal Corp., Marathon also is working to begin an exploration well in the East Swanson River area. The environmental impact statement is done and the company is working on construction issues now, Barnes said.

Production is to begin in the fall at a relatively new find in Ninilchik, also a Marathon/Unocal partnership.

Marathon has...