Providing coverage of Alaska and northern Canada's oil and gas industry
January 2010

Vol. 15, No. 5 Week of January 31, 2010

Yukon Flats a go

Doyon moving ahead with a new seismic survey on its land in the flats

Alan Bailey

Petroleum News

Doyon Ltd., the Fairbanks-based Native regional corporation for Interior Alaska, has announced that it is sponsoring some new oil and gas exploration in the Yukon Flats this winter. CGGVeritas will gather about 95 miles of 2-D seismic data in a 200,000-acre block of Native land owned by Doyon and by Dinyee, the village corporation for Stevens Village, one of the Yukon Flats communities, Doyon said Jan. 21. The target area is north of Stevens Village and is within 15 to 30 miles of the trans-Alaska oil pipeline, Doyon said.

Arctic Contracting LLC, a venture jointly owned by Dinyee and Titheet’ Aii Inc., the village corporation for Birch Creek, another Yukon Flats community, will provide support, while Doyon Universal Services and Taiga Ventures will provide additional services.

“We hope to get between 15 and 20 local people hired during the course of the program,” James Mery, Doyon vice president lands and natural resources, told Petroleum News Jan. 25.

Exploration incentives

Mery said that exploration incentives credits available under the State of Alaska’s ACES production tax had significantly influenced Doyon in its decision to move forward with the seismic survey. The corporation had already earned credits as a consequence of its participation in the drilling of an exploration well in the Nenana basin in 2009, and the exploration in the Yukon Flats will generate additional credits, he said.

Crews will arrive in the survey area on Feb. 1 to begin preparations for the survey, with the actual seismic recording starting around March 1 and continuing through March, possibly into early April, Mery said.

Working on flat ground, mostly covered by brush, the survey team will set up shot points and lay seismic recorders by helicopter and snow machine, thus avoiding the need to cut lines through the vegetation and making it possible to circumvent any stands of trees, Mery explained.

“It’s a system that’s used extensively in Canada,” he said.

Substantial basin

The Yukon Flats, a 15,000-square-mile lowland area around the Yukon River between the trans-Alaska oil pipeline and the Canadian border, lies over a substantial geologic basin with oil and gas potential. For several years Doyon has been interested in the possibility of oil and gas exploration in the area, to provide work and income for Yukon Flats residents, as well as new income for Doyon.

A large part of the area lies within the boundary of the Yukon Flats National Wildlife Refuge and until last year Doyon had been trying to negotiate a land swap with the U.S. Fish and Wildlife Service, the administrator of the refuge, to consolidate some of the more prospective parts of the Yukon Flats basin into Doyon ownership. That deal eventually came to naught, amid controversy among local communities regarding the desirability of oil and gas development in the region and objections by environmental groups.

However, recent geologic research has encouraged Doyon to view some of its existing lands in the Yukon Flats as more prospective than was earlier thought, and in 2008 the corporation indicated its intention to proceed with exploration, whether or not the land swap took place.

Deep subbasins

In particular the U.S. Geological Survey has used gravity and aeromagnetic data to infer the existence of some subbasins within the overall area of the Yukon Flats basin, with most of these subbasins having depths in excess of 8,000 feet. A subsequent oil and gas assessment by Petrotechnical Resources of Alaska estimated the possible existence of 300 million to 1 billion barrels of oil in the entire basin, and perhaps 1 trillion cubic feet of natural gas.

“We clearly think that this area is permissive of at least a couple, maybe more, Alpine-sized fields,” Mery told Petroleum News in 2008.

Doyon wants to conduct its new seismic survey to test the USGS theory about the existence of those subbasins: One of the likely subbasins lies immediately north of Stevens Village. And, if the seismic near Stevens Village confirms the existence of a deep subbasin there, the result would place a high probability on the existence of the other subbasins. There are, for example, two subbasins near the village of Beaver, to the east of Stevens Village, Mery said.

And Doyon hopes to attract interest in industry oil and gas exploration near Stevens Village or in other Doyon land situated on Yukon Flats subbasins.

“Our efforts in the Yukon Flats this winter are part of a multiyear plan to conduct additional exploration on a variety of natural resource projects on Doyon lands, add significant value and thereby attract other companies to conduct follow-on exploration,” said Norman Phillips, Doyon president and CEO. “An important part of this plan is to work closely with local communities to assure a meaningful economic stake in any project.”

Local support

Maureen Mayo, operations manager of Dinyee, said that her board of directors “recognizes that well-managed oil and gas development on a small portion of our traditional lands, coupled with appropriate oversight by Doyon and Dinyee working together, is compatible with our mission and values.”

“By applying the best practices we believe both development and traditional use can work in harmony,” Mayo said.

“My community has long supported careful oil and gas development because of the economic opportunities it could provide for long term village sustainability,” said Jackie Balaam, a resident of Birch Creek and president of Titheet’ Aii.

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