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Murkowski wants ANWR test well
Kay Cashman Petroleum News Publisher & Managing Editor
Alaska Gov. Frank Murkowski has asked the oil industry to form a consortium to drill a stratigraphic test well on unleased state lands offshore the coastal plain of the Arctic National Wildlife Refuge. Common in frontier areas, a strat well is designed to provide geologic data about an area, such as defining the nature of petroleum systems, identifying source rock potential and assessing reservoir quality, etc. Could open up offshore to leasing In this case, a well drilled offshore the eastern portion of ANWR’s coastal plain could provide valuable information about the geologic potential of both the coastal plain and offshore waters – neither of which is currently offered by the state or feds for oil and gas leasing, Alaska Division of Oil and Gas Director Mark Myers told Petroleum News Aug. 12.
“The governor wants to accelerate oil and gas exploration and development and this is just one part of that effort. This is an area that has been under-evaluated and this … well could provide the data, the catalyst for more frontier exploration,” he said. How much gas? It could also determine the gas potential of the region, as well as the oil potential, Myers said.
The state has “picked a zone, a block of interest with four possible drilling sites that industry can evaluate (see adjacent map),” he said.
Depending on the water depth at the selected site, a well could be drilled in three different ways, he said: using the SDC, a drillship owned by Seatankers and used last year by EnCana to drill the Beaufort Sea McCovey prospect; using a bottom-founded barge with a drilling rig on it, or; from an ice island.
The well would be subject to normal permitting requirements, Myers said.
Decision needed soon “On the fastest possible track the open-water portion of the site-clearance survey might be acquired yet this season, completed over-ice this winter and a drilling platform emplaced the summer of 2004 for drilling during the winter of 2004-05,” Myers said.
To meet this schedule the state will need its first decision from an industry consortium soon because the open-water site survey work has to be done in September, he said.
State officials first met with industry representatives in Anchorage on Aug. 12, following an Aug. 4 email from Myers. The next meeting is a week later on Aug. 19.
Data from the well would be available to participants who share in the cost of drilling, and must be given to the commissioner of the Alaska Department of Natural Resources within 30 days of abandonment, the governor’s office said Aug. 13. Data would be kept confidential for 24 months after receipt by the state, but “interested third parties may view the data if, in the commissioner’s opinion, limited disclosure furthers the state’s interest in evaluating and developing its land. Appropriate confidentiality provisions will apply,” the state said in a packet of information handed out at the Aug. 12 meeting.
Forty percent exploration tax credit possible for participants The state does not intend to fund the project, “but envisions a multi-participant group sharing well costs and resulting data equally (similar to the COST well programs conducted on the outer continental shelf),” Myers said.
“Participation in the well is open to all organizations that are willing to share proportionally in the well cost. It is expected that the well would qualify for a 40 percent severance tax credit,” the governor’s office said.
Industry interest to date varied from “doesn’t fit our business plan” from BP to “we’re reviewing the information” from EnCana and ChevronTexaco, the operator of the KIC well and BP’s partner in the only leased acreage in the coastal plain.
Stratigraphic tests wells are not intended to strike oil or gas, but you “can never say never,” Myers said.
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