January 17, 2013 --- Vol. 19, No. 7January 2013

Conoco’s Alaska budget ‘about 1 billion’

ConocoPhillips plans to spend “about 1 billion” in Alaska this year, ConocoPhillips Alaska President Trond-Erik Johansen told an audience in Anchorage recently.

The projection is a slight increase over the 2012 budget, but Johansen warned against viewing the bump as sign ConocoPhillips suddenly approves of the investment climate in Alaska, after years of complaining about its tax burden. “When you look at the base development speed and pace in the legacy fields, it’s the same (budget) as 2006,” he said Jan. 11 at the Alaska Support Industry Alliance’s annual conference, Meet Alaska.

The date is not an arbitrary one, Johansen noted. In 2006, the state passed the Petroleum Profits Tax, which it revised in 2007 with Alaska’s Clear and Equitable Share. The major oil companies have been pushing lawmakers for years to change the current system.

The increase, according to Johansen, will primarily accommodate construction of the CD-5 satellite of the Alpine field and preparations for Chukchi Sea drilling 2014.

—Eric Lidji

See story in Jan. 20 issue, available online at 11 a.m. on Friday, Jan. 18, at

State denies unit expansion, drilling extension

ASRC Exploration’s application to expand the western North Slope Placer unit and defer a drilling obligation by a year has been denied by the state.

Bill Barron, director of the Alaska Department of Natural Resources, Division of Oil and Gas, said in a Jan. 14 decision that “expansion of the unit is unnecessary to accomplish the activities” ASRC set out in its application. He said the public interest is not served by granting a “six fold expansion of the unit before AELLC (ASRC Exploration LLC) has met the major initial work commitment upon which the Placer Unit approval was based.”

“Neither denial of the proposed unit expansion or drilling extension precludes AELLC from drilling exploration wells in the unit and the expansion areas to obtain data to support a development proposal that would implement efficient recovery of oil and gas resources,” Barron said, and while unit expansion and extension of the drilling deadline would protect ASRC Exploration’s interests, it “would not protect the state’s interest because it would delay development.”

—Kristen Nelson

See story in Jan. 27 issue, available online Friday, Jan. 25 at 11 a.m. at

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