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BG, Anadarko partner at Jacob’s Ladder London-based company expands Alaska interests to eastern North Slope, acquiring 40% of 208,000 acres east of Prudhoe Bay Alan Bailey and Kay Cashman Petroleum News
London-based BG Group signaled its interest in northern Alaska in February when it announced a partnership with Anadarko Petroleum Corp. and Petro-Canada to explore in the Brooks Range Foothills. BG is now extending its Alaska interests into the eastern part of the North Slope — on May 15 company subsidiary BG Alaska E&P Inc. announced that it had signed an exploration agreement with Anadarko to acquire a 40 percent equity share in 208,000 acres of land in the eastern part of Alaska’s North Slope.
The acreage includes the Anadarko-operated Jacob’s Ladder unit, as well as a swath of tracts extending east from Jacob’s Ladder and some tracts immediately south of BP’s Badami field. Anadarko will remain operator of all the leases that come within the partnership with BG.
BG Group, a spin-off 20 years ago from the privatization of the British government-owned gas monopoly British Gas, is a publicly listed company on the London and New York Stock Exchanges and has operations in 20 countries. Company operations consist of exploration and production; liquefied natural gas; transmission and distribution; and power generation.
“BG Group is focused on growing its presence in Alaska as part of our long-term plan to meet the increasing U.S. energy demand through the production of new natural gas supplies from Alaska and Canada,” said Martin Houston, BG executive vice president and managing director, North America, Caribbean and Global LNG. “This agreement with Anadarko is an ideal partnership between two companies with the knowledge, technology and experience to be successful and fits nicely into our strategy of being a long-term reliable supplier of clean burning natural gas to the world’s largest gas market.”
The leases in the new partnership lie immediately southeast of the giant Prudhoe Bay field with its known natural gas reserves of about 24 trillion cubic feet. The leases also lie southwest of the 8 tcf Point Thomson gas and condensate field.
Oil prospect The Jacob’s Ladder unit has an oil prospect in the Wahoo formation of the Lisburne group, with a potential reservoir in eroded cavities in Lisburne carbonate rocks — the play resembles the huge Yates field in Texas (see “New Lisburne play at Jacob’s Ladder” in the Nov. 13 edition of Petroleum News). The unit also includes a sizable prospect in the Ivishak formation of the Sadlerochit, equivalent rocks to the reservoir of the Prudhoe Bay field.
But does interest in an oil play mark a change in direction for BG, a company with a stated focus on natural gas rather than oil?
The company’s focus won’t change, David Keane, vice president for policy and corporate affairs for the BG Group in North America, told Petroleum News.
“BG is a natural gas-focused company — that’s what really drives the company,” Keane said. “But … we’re certainly not opposed to finding oil.”
In February Keane told Petroleum News that BG would look at new opportunities to expand its reserve base in Alaska “as long as it made economic sense and was do-able.”
Exploration at Jacob’s Ladder slots into Anadarko’s strategy of finding large “anchor” oil and gas accumulations, some distance from the existing oil infrastructure.
“We’ve had a very focused type of exploration program over the years — we’re looking for primarily anchor-type opportunities,” Greg Hebertson, Anadarko’s Alaska/Canada frontier project manager, told Petroleum News in September 2005. “These are opportunities that are standalone, that don’t necessarily need existing infrastructure.”
But large developments at remote sites require partners to share the risks.
“Obviously in those types of situations you’re not going to do something 100 percent and you really have to have the right kind of partnership in place,” Hanley said in September.
The new BG partnership, together with the already-established Foothills partnership with BG and Petro-Canada, confirm that Anadarko has now achieved its objective of finding partners for its leases in the Foothills and the northeastern North Slope. The company has for several years partnered with ConocoPhillips in exploration and development activities west of Prudhoe Bay.
“We’ve been working for a couple of years on bringing a partner in for our Foothills and eastern North Slope acreage,” Mark Hanley, Anadarko’s Alaska spokesman, told Petroleum News. “We’re pleased to have that process complete.”
But now that Anadarko has found a partner in northeast Alaska, what is the likelihood of some drilling in the leases in that region in the next winter season?
“We’re working in that direction,” Hanley said. “We’d like to drill this winter.”
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