The Alaska Department of Natural Resources has approved an application by ConocoPhillips to expand the Colville River unit to include leases that were in the former Tofkat unit. The leases in question are on the southeast corner of the CRU. DNR had previously denied the expansion but in March DNR Commissioner Andrew T. Mack agreed to reconsider the decision.
Mack told ConocoPhillips in an Aug. 1 letter that, based on arguments raised by ConocoPhillips in March, he had decided that modifications to the unit expansion application now justify expansion approval. Those modifications include new bonding and drilling requirements.
The drilling of the Tofkat No. 1 well in the expansion area leases in 2008 by Brooks Range Petroleum, confirmed the existence of hydrocarbons in the leases. The hydrocarbons are believed to lie the Nanushuk formation, a rock unit of particular interest in the region because of its relationship to recent major oil discoveries. At issue in relationship to the expansion leases has been the fulfillment of drilling commitments for the leases.
In commenting on the unit expansion approval, Gov. Bill Walker said that the decision contains key provisions for drilling commitments and for creating jobs for Alaskans.
"It's important for the State of Alaska to find common ground with our oil industry partners and local stakeholders as we work to bring much-needed oil to the trans-Alaska pipeline," Walker said. "To get the full benefit of the decision, at least 80 percent of the hires must be Alaskan. ConocoPhillips has a strong record of training and hiring Alaskans. Because jobs in Alaska should go to Alaskans, my team and I will continue to ensure strong local hire provisions on this and other projects."
- ALAN BAILEY
See story in Aug. 13 issue, available online Friday, Aug. 11, at www.PetroleumNews.com