Anadarko: 25 Alaska years
Company leaving the state, sells remaining North Slope assets to ConocoPhillips
Anadarko Petroleum Corp.’s sale of its North Slope interests to ConocoPhillips marks the end of the 25-year story of the oil independent’s foray into Alaska.
Anadarko arrived in the state in 1993, when it saw the potential for major oil finds in the region. Its first venture was as a working interest owner in the Exxon-operated Thetis Island exploration drilling program in the Beaufort Sea, west of Oliktok Point. The drilling found oil in the prospect, and Anadarko took over as operator in 1997. Development was not pursued at that time, but in 2007 the Thetis lease became part of an expanded Oooguruk oil field, operated then by Pioneer Natural Resources Alaska.
Discovery of AlpineAnadarko also partnered with ARCO Alaska Inc. (subsequently ConocoPhillips Alaska Inc.) in an exploration venture that led to the discovery of the Alpine oil field in 1994 in the western North Slope. Alpine was declared commercial in 1996 and subsequently went into production with ARCO as operator and Anadarko as a working interest owner.
The two companies subsequently embarked on a joint exploration campaign in the northeastern sector of the National Petroleum Reserve-Alaska.
But Anadarko, anxious to also control its own acreage, acquired its own North Slope leases in state lands in 1998, as well as signing an exploration agreement for Arctic Slope Regional Corp. land in the Brooks Range foothills. In 1996 Anadarko also entered the Cook Inlet oil and gas industry, partnering with ARCO in exploration acreage in this region. However, in 2002 the company sold all its Cook Inlet lease holdings to Aurora Gas, a small, local natural gas producer.
Gas explorationAnadarko embarked on a program of seismic surveying on the North Slope, particularly in the Foothills, a region where the company saw natural gas potential. The concept in the Foothills was to develop gas that could be piped east to a potential gas export line from the North Slope following the route of the trans-Alaska pipeline. At that time, prior to the shale gas revolution, the idea was to pipe gas south through Canada to Lower 48 markets.
In 2005 Petro-Canada formed a joint exploration agreement with Anadarko for Foothills gas exploration but the partners held off exploration drilling, pending a gas line development decision. However, Anadarko pioneered a new design of seismic vehicle for seismic surveying in the region.
In the winters of 2002 and 2003 Anadarko tested a new concept for a novel portable Arctic drilling platform, drilling into a shallow methane hydrate deposit under the North Slope, in a project termed “Hot Ice.” That particular project did not work out. But, by that time, Anadarko had more acreage under lease north of the Brooks Range than any other operator. The company had also operated an exploration well, the Altamura No. 1 well, in NPR-A. And the company’s partnership with ARCO was paying off, with discoveries such as Spark, Mooses Tooth, Lookout and Rendezvous in the NPR-A, ultimately leading to partnership with ConocoPhillips in the CD-5 and Mooses Tooth developments. The discovery of Alpine satellite fields was driving an expansion of the Alpine field facilities.
NPR-A explorationIn the winter of 2004-05 Anadarko, in partnership with ConocoPhillips and Pioneer, drilled two wildcat exploration wells, in a remote region of the northern NPR-A, some distance west of previous exploration efforts.
In 2006, the purchase of Kerr-McGee by Anadarko brought the as-yet undeveloped Nikaitchuq field under the nearshore waters of the Beaufort Sea into Anadarko ownership. And in the winter of 2006-07 the company started drilled the Jacob’s Ladder exploration well in the eastern North Slope. But Eni bought the Nikaitchuq leases from Anadarko in 2007. And Jacob’s Ladder turned out to be a dry hole.
Also in 2007, the passage of the Alaska Gasline Inducement Act under the administration of Gov. Sarah Palin encouraged Anadarko to move forward with the drilling of gas exploration wells in the Foothills region, in particular near Umiat. A proposal for a gas “bullet line” from the North Slope to Southcentral Alaska also motivated this exploration effort.
Other interestsBy 2011 Anadarko appeared to be showing more interest in ventures outside of Alaska, including shale oil and gas in the Lower 48. The company had found gas in four exploration wells in its Foothills program. But the emerging shale gas industry in the Lower 48 was undermining the economics of the Alaska gas line concept: Ultimately Anadarko’s Alaska gas exploration came to a halt.
Since then Anadarko’s Alaska lease holdings have shrunk, with, until now, the company retaining just its ownership interests in leases it has held jointly with ConocoPhillips.