NEWS BULLETIN

March 03, 2004 --- Vol. 10, No. 22March 2004

Phase 2 of Alpine capacity expansion under way

ConocoPhillips and Anadarko Petroleum Corp. said today that they will increase oil production capacity at the Alpine field on Alaska’s North Slope to 140,000 barrels of oil per day (gross). The field, which started production in November 2000, currently is producing some 100,000 bpd.

The companies have approved phase 2 of the Alpine capacity expansion project, or ‘ACX2’, which will be completed by mid-2005.

This expansion will increase both the oil handling and seawater injection capacities at Alpine.

The project is expected to cost $58 million (gross) and follows the previously announced ‘ACX1’ project, which will start up later this year. The companies said more than 300 Alaskans are employed across the state on the construction and fabrication phase of the two projects.

“Many of the modules are already under construction and the first truckable modules will be arriving on the slope this winter,” ConocoPhillips Alaska spokeswoman Dawn Patience told Petroleum News.

The two expansion projects will increase oil production and maintain reservoir pressure. Eighty-one wells, 39 production wells and 42 injection wells, have been drilled to date, the companies said, with 94 wells in total planned for the two Alpine drill sites. Alpine has been developed exclusively with horizontal well technology and employs enhanced oil recovery.

ACX1 and ACX2 contractors include: NANA/Colt Engineering LLC, VECO Alaska Inc., ASRC Energy Services, Nanuq Inc., SteelFab, Flowline, The Weld Shop and Parsons Energy and Chemical.

State proposes licensing in Nushagak Bay; drilling only from shore

The Alaska Division of Oil and Gas has issued a preliminary best interest finding for an exploration license in the Bristol Bay basin, and said it is proposing to amend a 1996 ruling by the Alaska Department of Natural Resources excluding “all submerged land in and around Bristol Bay, from Ugashik Bay north to the western boundary of Kulukak Bay…” from exploration licensing, including Nushagak Bay.

The proposed exploration license includes a portion of Nushagak Bay south of Dillingham.

The division said it proposes to allow exploration licensing within Nushagak Bay, “but with the stipulation that exploratory drilling can only be conducted directionally from onshore locations.”

The division said that if a decision is made to award the exploration license, it will be awarded to Bristol Shores LLC.

The state has scheduled three public meetings to take public comment: March 8 in Dillingham; a video/teleconference from Anchorage to 13 schools in the areas of the proposed license; and March 31 in Dillingham. Meetings will begin a 7 p.m.

Comments on the proposal are due May 3, and the division said it expects to make a final finding available in late July.


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