NEWS BULLETIN

March 01, 2007 --- Vol. 13, No. 20March 2007

Conoco drops Chukchi, Beaufort seismic plans

ConocoPhillips Alaska has abandoned plans to shoot three-dimensional seismic offshore northern Alaska, the company told federal officials in mid-February when it asked them to discontinue work on seismic permit applications for the Beaufort and Chukchi seas where the company planned to use the MV Western Patriot during the upcoming open water season.

Instead ConocoPhillips has cut a deal to acquire seismic data from another company, which is likely Shell Offshore, the only other company that applied for permits to acquire 3-D seismic in the Beaufort and Chukchi in 2007. Both Shell and ConocoPhillips listed WesternGeco on their permit applications as their seismic contractor.

The only other firm planning to shoot seismic in both areas is GX Technology Corp., which is looking at a two-dimensional seismic program.

Bruce St. Pierre, senior environmental coordinator for ConocoPhillips, told federal officials in an e-mail that ConocoPhillips “listened hard and heard the concerns of the communities, the whaling entities and the federal agencies. We evaluated the risks associated with permit timing and we weighed our options. For this season, we have worked out an arrangement to acquire data from another operator. This will significantly reduce the level of activity in the environment, reduce the amount of workload on agencies and save money. As with any action, there is a reaction and other implications to be considered.”

AOGCC releases summary of gas offtake study

The Alaska Oil and Gas Conservation has released a summary of a study it completed late last year on the gas offtake rate from the Prudhoe Bay oil field.

Commission staff concluded that a major gas sale would add some 4 billion barrels of oil equivalent to Prudhoe Bay recovery based on the known 24 trillion cubic feet of natural gas at the field, but also concluded there was insufficient evidence to recommend increasing the offtake rate at this time.

The commission sets gas offtake rates under its charge to promote greater ultimate recovery and prevent waste of hydrocarbon resources in the state. In 1977, at the startup of production, it set a maximum gas offtake rate of 2.7 billion cubic feet per day from the Prudhoe oil pool, well below the 4.5 bcf a day that has been discussed recently for a natural gas pipeline from the North Slope.

Gas extraction lowers reservoir pressure, decreasing the energy required for oil production and oil recovery suffers, commission senior reservoir engineer Jane Williamson said in a Feb. 28 public summary of the Prudhoe oil pool offtake study. Gas is produced at Prudhoe along with the oil and the bulk of the gas is reinjected to maintain reservoir pressure and increase oil production.

While the commission has not received an application to alter its 1977 gas offtake rule, it is trying to position itself so that it is not a holdup when there is a major North Slope gas sale, said commission Chair John Norman.

Editor’s note: See full stories in the March 4 edition of Petroleum News which will be available online on Friday noon, March 2.


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