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Oil Patch Insider Three-year contract on jack-up for Cook Inlet; Alaska gas pipeline contract in 2-3 weeks; Canadian rumor that won’t quit
On Feb. 23 at the Pac Com conference in Anchorage, Escopeta Oil President Danny Davis announced his company and partner Centurion Gold had agreements in place to bring a jack-up rig to Alaska’s Cook Inlet this summer.
That story was written from a pre-Pac Com interview with Davis and appeared in last week’s issue of Petroleum News.
At the conference, however, Davis also mentioned his Houston-based independent has a three-year contract (with options to renew it in one-year increments) with Songa Offshore, the Norwegian company that owns the Tellus jack-up, which will head to Alaska in late May. It’s currently in the Gulf of Mexico where it is being refurbished.
No word yet from ConocoPhillips or Forest Oil in the Cook Inlet basin on whether or not they will take advantage of the jack-up rig to drill some of their offshore prospects.
But the folks at Rutter and Wilbanks are reportedly talking to Davis about possible use of the Tellus to drill their offshore Cook Inlet leases. The Midland, Texas-based independent recently purchased the Northern Lights offshore prospect in upper Cook Inlet basin from Irving, Texas-based independent Prodigy Alaska (See story in the Feb. 19 issue of Petroleum News). Northern Lights is close to Escopeta’s Kitchen prospects where the jack-up will be used first.
—Kay Cashman Konrad: Gas line fiscal contract in 2-3 weeks In Feb. 28 testimony to Alaska lawmakers on proposed changes to the state’s oil tax regime Ken Konrad, BP’s vice president-Alaska gas, said he would be happy to address questions about a gas line fiscal contract between the state and North Slope producers when that document was public, and mentioned a timeframe of two to three weeks. The agreement was announced Feb. 21. Gov. Frank Murkowski’s chief of staff, Jim Clark, said at that time that exhibits remained to be finalized and the contract also needed a final legal review. It will be released with a Department of Revenue best interest finding.
—Kristen Nelson Rumor that won’t quit in Canada’s oil patch So long as nothing happens, it’s the rumor that will never go away in Canada’s oil patch.
On-line speculation, reported in the Globe and Mail on Feb. 25, once more touted the prospect of a state-owned Chinese company taking over Husky Energy, or possibly Canadian Natural Resources to gain a major stake in the Alberta oil sands.
This time Norwegian-based Upstream magazine said on its Web site that China National Petroleum Corp. is aiming to invest up to US$30 billion this year in a large-scale takeover, after scooping up a trio of Canadian-owned assets in 2005 — Petro-Canada’s holdings in Syria, EnCana’s troubled properties in Ecuador and the outright takeover of PetroKazakhstan.
Upstream based its speculation on a China National source who said independent consultants had been hired to put a price on Husky and Canadian Natural.
The Canadian companies had no comment and China National issued a denial to Bloomberg News.
A Beijing-based spokesman for China National said he had not heard any mention of talks with Canadian companies.
But after the dabbling in the oil sands sector last year by China National, Sinopec and PetroChina — all part of Beijing’s fold of oil giants — most observers have been counting on a major move to help China meet its growing energy needs, which are forecast to grow by 5.8 percent this year after 2.5 percent in 2005.
In 2004, China National courted Husky — controlled 92.5 percent by Hong Kong billionaire Li Ka-shing and his family — but balked at paying C$30 a share. The stock has since climbed to C$70, although the company’s market value is within the Chinese company’s buying range.
Canadian Natural is an even bigger oil sands player than Husky and has often been touted as target for asset-hungry foreign firms.
—Gary Park First Liberty project meeting held in Barrow BP Exploration (Alaska) officials met with North Slope Borough officials in Barrow at the end of February for the first pre-application meeting on the offshore Liberty oil project, a borough official told Petroleum News March 1.
The previously unreported information that came out of that meeting was that the two sites BP is evaluating for a drilling operations base are Point Barrow and a spit near the mouth of the Kadleroshilik River. CD-5 and spur ice road permits elevated to NSB planning commission The permits for ConocoPhillips’ CD-5 Alpine satellite project and Pioneer Natural Resources’ Oooguruk spur road to the Helmericks property have been elevated to the North Slope Borough’s planning commission vs. being administratively approved earlier in February.
There will be back-to-back public hearings in Nuiqsut on March 30 to help the commission decide the fate of the two permit applications.ConocoPhillips’ CD-4 Alpine satellite project permit was also elevated to the planning commission but was eventually approved and work is expected to be complete this winter.
Construction work for CD-5 is expected to begin in the first quarter of 2007.
Timing on the Oooguruk field development might be inconvenienced but not delayed, as the permit for the main ice road from Kuparuk Drill Site 3H to the Oooguruk drill site has already been issued by the borough. PN is still waiting to hear from Pioneer, however. Pioneer’s Alaska president, Ken Sheffield, has been tied up in Juneau testifying on the proposed new oil tax regime, so more on the spur ice road permit next week. NEWS FLASH As Petroleum News was going to press, Gordon Brower from the North Slope Borough’s planning department provided an update. Pioneer has pulled the application for the spur ice road which was outside the rezoned development area. Brower said dropping the spur road helped minimize impact from the project.
—Kay Cashman
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