April 10, 2013 --- Vol. 19, No. 25April 2013

ConocoPhillips cancels 2014 Chukchi drilling

ConocoPhillips has announced that it is putting on hold its plans to drill in Alaska’s Chukchi Sea in 2014. The company says that, given the “uncertainties of evolving federal regulatory requirements and operational permitting standards” it would not be prudent at this time to make the significant financial commitment required for drilling in 2014.

“While we are confident in our own expertise and ability to safely conduct offshore Arctic operations, we believe that more time is needed to ensure that all regulatory stakeholders are aligned,” said Trond-Erik Johansen, president of ConocoPhillips Alaska.

The company cites the Department of the Interior’s recently published report from the federal interagency working group that coordinates federal permitting in the Arctic as a prime reason to pause the Chukchi drilling plans. That report recommends a more integrated approach to the management of Arctic offshore economic activities, with better alignment between stakeholders in the region and the balancing of environmental, economic and cultural objectives.

“We welcome the opportunity to work with the federal government and other leaseholders to further define and clarify the requirements for drilling offshore Alaska,” Johansen said. “Once those requirements are understood, we will re-evaluate our Chukchi Sea drilling plans. We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic.”

—Alan Bailey

Hilcorp plans oil exploration well in Ninilchik unit

Hilcorp Alaska has applied to the Alaska Department of Natural Resources for an amendment to the plan of operations for the Ninilchik unit on Alaska’s Kenai Peninsula, to allow the company to drill a 12,000-foot exploratory well from the Susan Dionne pad in the unit.

Hilcorp spokeswoman Lori Nelson told Petroleum News in an April 9 email that the well will target oil, the first well for some considerable time to target oil rather than gas in the unit. There have been six oil exploration wells previously drilled in the unit, with one of these, a well drilled in 1978 at Clam Gulch, having minimal oil shows, Nelson said.

The Ninilchik unit currently holds a large natural gas field that was discovered in 1961.

Hilcorp anticipates mobilizing a rig to the Susan Dionne pad in June for the drilling, Nelson said.

—Alan Bailey

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