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NEWS BULLETIN

February 26, 2001 --- Vol. 7, No. 23February 2001

Phillips files draft environmental evaluation for two new pads at Colville

The Colville Delta unit west of Kuparuk, where Phillips Alaska Inc. and Anadarko Petroleum Corp. started up the Alpine field in mid-November, could see two satellites in production by the end of 2003.

While the companies have not made a final determination that the accumulations are commercial, Phillips has filed a draft environmental evaluation document proposing facilities and alternatives for development of Colville Delta South approximately four miles south of the Alpine central processing facility and Colville Delta North approximately five miles north of Alpine.

"Presently," Phillips said, "these accumulations have not been deemed commercial and are dependent on future delineation drilling to confirm commerciality," but the company said each is estimated to contain 50 million barrels of reserves. If they do prove commercial, Phillips and Anadarko could start pad, road and airstrip work next winter.

Phillips told the state that a gravel drill site would be built at each prospect with three-phase (oil, water and gas) hydrocarbon production to the Alpine central processing facility. The company would connect Colville Delta South (Nanuk) to Alpine with a 3.8-mile gravel all-weather road. Access to Colville Delta North (Fiord) would be via a 6,000-foot airstrip.

Construction would start next winter with production set to begin in late 2003.

BP to develop Schrader Bluff at Milne Point with only one new pad

BP Exploration (Alaska) Inc. will begin construction this summer of a new production pad at Milne Point for Schrader Bluff development.

In 1997, BP proposed a Schrader Bluff development at Milne Point but that plan called for seven new pads, 75 miles of new pipeline and 300 wells.

"Due to its scope, the 1997 project proved to be uneconomic," BP told the state in permit applications submitted in February.

The 2001 plan calls for one new production pad (S pad, in the southern portion of the Milne Point unit), a 0.7-mile access road, a 4.4-mile water injection pipeline from the central facilities pad at Milne to S pad; a 3.3-mile oil production pipeline from S pad to the K pad oil production pipeline, power and fiber optic cables and ice roads to develop reserves.

BP said it estimates Schrader Bluff reserves at Milne Point, between the Kuparuk River unit and the Prudhoe Bay unit, at 200-300 million barrels. As many as 100 wells will be drilled from existing Milne Point pads and as many as 50 wells from the new S pad.

Construction will begin Aug. 1 with gravel mining. Pad, water and oil pipeline construction will be complete by July 1, 2002.

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