A commitment to finding large, long-term prospects in remote areas of northern Alaska underlies Anadarko Petroleum’s strategy in the state, Greg Hebertson, Anadarko’s Alaska/Canada frontier project manager, and Mark Hanley, the company’s Alaska spokesman, told Petroleum News in late September. The company wants to develop large fields that can then form hubs for the development of smaller prospects.
“We’ve had a very focused type of exploration program over the years — we’re looking for primarily anchor-type opportunities,” Hebertson said. “These are opportunities that are standalone, that don’t necessarily need existing infrastructure and we feel like that’s the kind of exploration that is going to benefit Anadarko and our shareholders, as well as the state.”
Anadarko believes that large oil and gas fields remain to be found in northern Alaska. And the company’s strategy has caused Anadarko to amass one of the top exploration land positions in the state.
“We’ve been in Alaska since 1993 and we’ve been continually investing in Alaska ever since that time,” Hebertson said.
Anadarko has participated in proprietary seismic with its partner ConocoPhillips and has operated 2-D and 3-D seismic programs in the eastern North Slope and Brooks Range foothills. The company has only operated two exploration wells (the Altamura well in the National Petroleum Reserve-Alaska and the Hot Ice well in the central North Slope) but has participated in approximately 35 exploration wells, predominantly in NPR-A, Hebertson said.
Remote areas and partnerships
The remoteness of the areas in which the company prefers to explore drives a need to find large oil or gas accumulations.
“We’re looking for the hundreds of millions of barrels, and because they are far from infrastructure and because of the infrastructure that’s needed to bring those fields online they need to be a substantial size,” Hebertson said.
But exploring for large petroleum accumulation far from existing infrastructure entails higher than average risk. To mitigate those risks, Anadarko works with partners that can share the costs, risks and rewards.
“Obviously in those types of situations … you really have to have the right kind of partnership in place, and that’s what we’re continually trying to do is find that right partner,” Hanley said, likening the process to dating.
Anadarko seeks partners that have similar exploration objectives and that can handle the commercial risks. The company has enjoyed a fruitful relationship with ConocoPhillips Alaska (previously ARCO Alaska) that stretches back to the discovery of the Alpine field by an ARCO-operated partnership in 1994. Anadarko continues to partner with ConocoPhillips in the development of Alpine and its satellites, and the company maintains a joint venture with ConocoPhillips for exploration in NPR-A.
The 430 million barrel Alpine field (Colville unit) and the satellite fields that surround it exemplify the type of opportunity that Anadarko seeks.
Success at Alpine has acted as a springboard for frontier exploration west into NPR-A. The ConocoPhillips-operated partnership with Anadarko drilled the Puviaq prospect in the winter of 2003-04 and the Kokoda prospect in the winter of 2004-05. The wells at Puviaq and Kokoda remain tight holes.
Exploring in the foothills
Anadarko is also pleased with its Brooks Range foothills partnership with Petro-Canada.
“Our … joint venture with Petro-Canada I think is a good example of a good, successful relationship,” Hebertson said. “We’re very aligned technically in the (foothills) area and we see the area similarly in terms of its resource potential and our commitment to the area.”
Anadarko is operator for the exploration of more than 1.5 million acres of state and Arctic Slope Regional Corp. land in the Brooks Range foothills. The company pooled this acreage with Petro-Canada under the terms of the partnership between the two companies.
“We’ve got a very deep portfolio of opportunities in the foothills. The vast majority of those are gas opportunities, but they’re not exclusively gas opportunities,” Hebertson said. “We have people doing geologic fieldwork this summer up there. Potentially we could be acquiring some seismic … there in the future with our new partnership.”
Gas drilling in 2007
However, drilling in the gas-prone foothills area will depend on progress with plans for a gas pipeline from the North Slope: Anadarko needs assurances on the availability of capacity for shipping gas before incurring the significant cost of foothills drilling. The two key gas line issues are access for explorers and expandable space, Hanley said.
“Based on our current planning we’d like to be drilling in 2007 in that area,” Hebertson said. “Obviously that’s contingent upon Anadarko feeling that access issues have been rectified with respect to the pipeline.”
Anadarko is, however, happy with the Federal Energy Regulatory Commission’s rules for open season on the gas line: “We were pretty pleased with how that came out — we think that went a long ways to addressing the issues,” Hebertson said.
The company would like a second partner for foothills exploration.
However, “not having (another) partner wouldn’t necessarily preclude us from moving ahead,” Hanley said. “I think we’re happy with our current partnership. Ideally we’d like to bring somebody else in, but conceivably we could go ahead if we don’t find anybody.”
Jacob’s Ladder and Ayak
Anadarko is also looking for a partner for its Jacob’s Ladder prospect, in the central North Slope, 20 miles southeast of Prudhoe Bay. Meantime the company is unitizing the Jacob’s Ladder acreage.
“We’ve had a lot of interest in Jacob’s Ladder recently and I’m encouraged that we might be able to put something together in the next six to twelve months,” Hebertson said.
The company also has a 100 percent interest in the nearby Ayak prospect.
“Ayak is another prospect we have in the Jacob’s Ladder area that could be drilled in the near future if a partnership comes together,” Hebertson said.
Although Hebertson stressed Anadarko’s commitment to Alaska he also pointed out that exploration opportunities in the state have to compete with the company’s portfolio of opportunities elsewhere. However, Alaska offers significant resource potential and a stable political environment.
“You’ve got a governor and a Legislature and congressional delegates who are very supportive of the oil and gas industry,” Hebertson said.
“I think the resource potential is there in Alaska. It’s never been a resource issue — the challenges in Alaska are commercial much more than they are from a resource perspective,” Hebertson said. “We’ve always been committed to Alaska. I think we’re going to be here for the long term.”
And plans for this winter?
“We’re going to continue to be active this winter just like we have been,” Hebertson said. “I think you’ll see Anadarko be involved with additional seismic acquisition in our focus areas and hopefully we’ll be participating in some drilling this winter, but that’s yet to be determined.”
