NEWS BULLETIN

December 07, 1998 --- Vol. 4, No. 55December 1998

ARCO not backing off Alpine

Contrary to recent news reports, ARCO Alaska Inc. is not backing off development of its Alpine field west of Kuparuk.

“We have not backed off the Alpine project. We are not slowing down field development,” ARCO Alaska spokesman Ronnie Chappell said Dec. 7.

The field, expected to produce 365 million barrels of oil from an estimated oil in place reservoir of 1 billion barrels, “will begin production at expected rates in mid-2000,” he said. “And we’re still looking for 40,000 barrels of oil per day at startup ramping up to 70,000 in 2001.”

With most large projects, Chappell said, it is normal to challenge plans made in the design stage. “With oil at $9 a barrel we’re going at that process a little harder than we have in the past,” he said. “We have gone back and taken a very hard look at the Alpine project and looked at ways to reduce spending on the project in 1999.”

Objectives cost reduction and cost deferral

“We have done two things,” Chappell said. “We’re looking for ways to cut total project cost and we’re looking for ways to delay some expenditures.”

Construction of Alpine living quarters has been suspended, he said, “while we determine if there is a lower cost option for providing camp facilities. We moved a temporary camp to location last year and we’ll be evaluating that camp to see if it could be converted to permanent quarters.”

Development drilling of the Alpine reservoir was planned to take five years, he said. What has changed is that early drilling will be focused on drill site No. 1.

“By focusing early development drilling at the Alpine drill site No. 1,” Chappell said, “we can defer construction and installation of some facilities destined for drill site No. 2 and still bring the field on production on schedule at expected rates.”

Gravel work, pipelines to be completed this year

Chappell said that all gravel work would be completed this year. The airstrip adjacent to drill site No. 1, the gravel roads between the drill sites and pad work at both drill sites will be completed. In addition, pipelines will be installed, a Doyon Drilling rig will be moved to location at Alpine and some 1,500 truckloads of supplies delivered, more than half of that drilling supplies.

More than 1,000 people will be employed on the project — on the North Slope, in Anchorage and at the Nikiski fabricating site, Chappell said; more than 300 people are fabricating facilities in Anchorage and Nikiski and more than 100 are working on Alpine engineering and procurement in Anchorage.


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