Platform renaissance: built mostly in the 1960s, Cook Inlet oil and gas leviathans still have some life left.

Author:Loy, Wesley
Position:OIL & GAS
 
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Just a few years ago, many of the oil and gas platforms in Cook Inlet appeared done for. Built mostly in the 1960s, the platforms had contributed strongly to a grand oil boom during the early years of Alaska statehood. But diminishing oil and gas reserves suggested the end of their useful lives. Some platforms were shuttered, and plans were laid to decommission others. Separately, in 2009, a company bankruptcy left an other platform in jeopardy of becoming a financial albatross for the state.

It was a pretty bleak picture all in all. But recently, the outlook has brightened. Aggressive new companies have taken over most of the sixteen platforms. The companies are infusing new capital and enthusiasm, betting the structures aren't ready for retirement just yet.

"It's no secret, the investments we've made," says Lori Nelson, spokeswoman for Hilcorp, the privately held company that operates twelve of the platforms.

The platforms would seem an ideal challenge for the Houston-based company, which has a reputation for reviving mature oil and gas assets.

Birth of a Boom

Cook Inlet today is Alaska's secondary oil patch, producing only a fraction of the volume seen from the North Slope. Before the Slope's enormous Prudhoe Bay field was developed, Cook Inlet was the star.

Exploratory drilling exploded in the early 1960s, and fourteen platforms were installed between 1964 and 1968 in the icy, tidally turbulent inlet. Some of the platforms took names such as Dolly Varden and King Salmon, reflecting the living resources of Cook Inlet. Another was called Spurr, after one of the volcanoes along the inlet's western side.

Cook Inlet oil production peaked in 1970 at around 225,000 barrels per day, and the platforms contributed substantially to the basin's output.

Two more platforms were installed subsequent to that 1960s building spree--the Steelhead platform in 1986 and the Osprey platform in 2000.

Looking at a map of the inlet, eleven of the platforms are arrayed along the western side. Pipelines carry production from the platforms to shore-based processing plants.

The other five platforms feed their production to facilities on the Kenai Peninsula, on the inlet's east side. The peninsula is home to the Tesoro refinery, which converts Cook Inlet crude oil into finished products such as gasoline.

Lucrative Production Stream

Aside from Hilcorp, three other companies operate Cook Inlet platforms. XTO Energy, a subsidiary of ExxonMobil, runs a pair of platforms...

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