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Vol. 15, No. 7 Week of February 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Big Risk, Bigger Rewards: Donít repeat the mistakes of others

Petroleum News Publisher Kay Cashman advises newcomers to Ďsave time and moneyí by utilizing Alaska experience

Kay Cashman

Publisher & executive editor, Petroleum News

There is a reason the Alaska subsidiaries of Denver-based Armstrong Oil and Gas use contractors with Alaska experience in their North Slope and Cook Inlet operations.

One of the most successful independents to work in the northernmost state, Armstrong didnít pick-up a single lease until he had put together a team with Alaska geological, land, permitting and engineering experience.

As an editor at Petroleum News, as well as its publisher, I have seen oil and gas companies come and go. Sometimes itís the luck of the geology, but a common theme in many failures is that the oil company brings in people with little or no Alaska experience in an attempt to Ďsave moneyí and show that the job can be done better and for less. In the end, they land up spending more money and, too often, leaving the state a good deal poorer than they arrived.

Some companies learn their lesson early, hire experienced contractors, stay, and do well.

Alaska IS different

But most insist Alaska is no different than anywhere else, especially the Cook Inlet basin, which is south of the Arctic Circle.

Thatís not true, not in any sense.

Discounting the value of local knowledge and contacts and the stateís unique logistics, the political and permitting environment alone is far more complicated and certainly stricter than any other state in the union. The only country that compares with Alaska in terms of strictness of environmental regulations is Norway. What takes a day in other petroleum regions can take months here.

Local permitting agents have the expertise to get a project permitting in a timely fashion.

Local contractors, which include outside contractors that have worked in Alaska for a long time, have grown their businesses here through the development of innovative technology and involvement in groundbreaking projects. They have mastered the logistics of working in a nearly road-less wilderness.

There is lots of oil and gas to be found in this state.

So be smart about it: save time and money by hiring contractors and suppliers with lots of Alaska experience.



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