NEWS BULLETIN

May 02, 2000 --- Vol. 6, No. 18May 2000

July 1 kickoff date for single operator at Prudhoe Bay

A joint BP-Phillips Prudhoe Bay integration team started working the last week in April with a goal of having the field under a single operator by July 1. That was the update Greg Mattson, BP Exploration (Alaska) Inc.'s new development business unit leader, gave the Alaska Support Industry Alliance April 28.

Now that the deals are complete -- the BP Amoco acquisition of ARCO and the Phillips Petroleum Co. acquisition of ARCO Alaska Inc. -- we can "get on with some new beginning for Alaska that we've so long discussed, talked about, thought about, dreamed about," Mattson said.

"We just this week kicked off an integration team that will be the product of both BP and Phillips," he said, to work on the integration of Prudhoe Bay into a single operating entity.

"Our commitment is to finish that and be operational by the first of July," he said.

It remains to be seen, he said, how a single operatorship will look.

"Our commitment is obviously to keep everyone informed and let you know as soon as we know exactly what the shape of the organization is going to be."

Phillips Alaska, BP announce discovery south of Kuparuk

Phillips Alaska Inc., a wholly owned subsidiary of Phillips Petroleum Co., and BP Exploration (Alaska) Inc. have announced "the first oil discovery of the millennium on Alaska's North Slope." The companies said May 2 that the Meltwater discovery is estimated to contain about 50 million barrels of proven and potential reserves.

The Meltwater North No. 1 exploration well, about 10 miles south of the Tarn oil field in the Greater Kuparuk area, tested at 4,000 barrels per day of 37 degree API gravity oil. A second exploration well and sidetrack, Meltwater North No. 2 and Meltwater North No. 2A, conformed a northern portion of the reservoir.

The Meltwater discovery was made on acreage purchased in June 1998 in the state's first areawide oil and gas lease sale. Phillips Alaska holds a 58.46 percent interest in the Meltwater North No. 1 well, BP Exploration holds a 41.54 percent interest.

The companies said that Meltwater has the potential to be the fourth Kuparuk satellite field to begin production. West Sak began production in 1997. Tarn and Tabasco began production in 1998.

"State areawide leasing and the application of advanced 3D seismic technology made this discovery possible in less than one year," said Michael Richter, vice president of exploration and land for Phillips Alaska. "This discovery marks a new era in the Alaska oil industry. This is Phillips Alaska's first discovery as a new company and the first discovery this century for the state of Alaska."

"This discovery signals a bright start to exploration in the new millennium and will also serve to move production infrastructure farther south than ever before," said F.X. O'Keefe, exploration business unit leader for BP Exploration (Alaska). "We will soon we working with Phillips on a field development plan."


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