Conoco cancels Chukchi, Beaufort seismic

Company pulls MMS permit applications for 2007 open water program, will likely buy 3-D seismic data from Shell

Kay Cashman

Petroleum News

ConocoPhillips Alaska has abandoned plans to shoot three-dimensional seismic offshore northern Alaska, the company told federal officials in mid-February when it asked them to discontinue work on seismic permit applications for the Beaufort and Chukchi seas where the company planned to use the MV Western Patriot during the upcoming open water season.

Instead ConocoPhillips has cut a deal to acquire seismic data from another company, which is likely Shell Offshore, the only other company that applied for permits to acquire 3-D seismic in the Beaufort and Chukchi in 2007. Both Shell and ConocoPhillips listed WesternGeco on their permit applications as their seismic contractor.

The only other firm planning to shoot seismic in both areas is GX Technology Corp., which is looking at a two-dimensional seismic program.

Bruce St. Pierre, senior environmental coordinator for ConocoPhillips, told federal officials in an e-mail that ConocoPhillips “listened hard and heard the concerns of the communities, the whaling entities and the federal agencies. We evaluated the risks associated with permit timing and we weighed our options. For this season, we have worked out an arrangement to acquire data from another operator. This will significantly reduce the level of activity in the environment, reduce the amount of workload on agencies and save money. As with any action, there is a reaction and other implications to be considered.”

In a speech to an Anchorage audience in November, ConocoPhillips Alaska President Jim Bowles said the potential of the Chukchi Sea was more exciting than even the National Petroleum Reserve-Alaska, where the company is drilling at least two wildcat exploration wells this winter.

The MMS, Bowles said, is proposing a Chukchi lease sale for 2007, noting that the Chukchi planning area was more than 34 million acres compared to 23 million acres in NPR-A.

Even more exciting than the large size, he said, was the limited amount of exploration that has been done there: just five wells. Of the five (Popcorn, Crackerjack, Klondike, Burger and Diamond), the Burger is a discovery with MMS putting the resource there at some 14 trillion cubic feet of gas, “so we know there is at least one large potential play out there and probably much, much more in this basin.”

But this big play will have big dollar costs and big challenges, Bowles said.

Just getting seismic in the Chukchi during the open water season of 2006 was a challenge, Bowles said.

The company’s 2006 survey involved mobilization of a ship out of the Mediterranean. Then the window to shoot seismic was very limited because of the ice season, “even with this ice-hardened vessel,” he said, some three months. And the vessel “got chased off early by the ice” and couldn’t gather as much data as planned. “It’s a big challenge just even collecting up-front data,” Bowles said.

The area will have to be monitored for whales, and Bowles said ConocoPhillips has tested a drone (see story in Nov. 5, 2006, issue of Petroleum News). The area is far from shore and drones would be a safe way to monitor so that seismic surveys could be shut down if whales came through the area.

Bowles also said keys to success in an exploration program include fiscal certainty in Alaska, as well as the ability to work with non-governmental organizations which see Alaska as “an important part of their focus. For us to be successful as a company, he said, whether it’s in NPR-A or in the Chukchi Sea or the Beaufort,” the company will have “to figure out how to work with the NGOs and make sure that we can find solutions that work for everyone.”