ConocoPhillips Alaska Inc. is moving forward at the Greater Mooses Tooth unit.
The company has officially approved funding for the GMT-1 project, which will become the first oil development exclusively within the National Petroleum Reserve-Alaska.
The $900 million project will include construction of a gravel drilling pad, a 7.7-mile road and associated facilities and pipeline and an initial drilling program of nine development wells. The GMT-1 pad will have the capacity for as many as 33 wells.
Construction is scheduled to begin in early 2017 and continue through 2018. The project is expected to employ approximately 700 people each winter, at its peak, plus support positions. The company expects to bring the GMT-1 pad into production in late 2018.
ConocoPhillips has estimated that the project will produce 30,000 gross barrels of oil per day at its peak. Produced fluids will be processed at the existing Alpine Central Facility.
The GMT-1 project will produce from lands owned by the U.S. Bureau of Land Management, Arctic Slope Regional Corp. and the Kuukpik Corp. ConocoPhillips operates the Greater Mooses Tooth unit and owns a 78 percent working interest while partner Anadarko Petroleum Corp. owns the remaining 22 percent working interest.
A $3 billion investment
With the announcement, ConocoPhillips has sanctioned four major North Slope construction projects over the past three years - three of those in the past year.
Together with GMT-1, the CD5 pad at the Colville River unit, Drill Site 2S at the Kuparuk River unit and the in-progress Drill Site 1H North East West Sak development at Kuparuk represent approximately $3 billion in spending and between 40,000 and 50,000 barrels per day of combined peak production, according to ConocoPhillips.
While ConocoPhillips sanctioned CD5 back in October 2012, the company presented the other three projects as somewhat contingent on changes to the state production tax code.
After the passage of those changes, ConocoPhillips sanctioned the DS-2S and NEWS projects in late 2014 and early 2015. Sanctioning of GMT-1 was expected to follow. But in January 2015, the company decided to “slow the pace of investment,” citing “permitting delays and requirements, as well as the current lower oil price environment.”
The permitting issues cleared up over the course of the year. But while oil prices climbed somewhat over the summer, they have since fallen to their levels from earlier in the year.
With CD5 pad having recently come online and GMT-1 now in the works, ConocoPhillips is continuing its steady westward march across the North Slope.
Earlier this year, the company began permitting GMT-2, which would be the second development at Greater Mooses Tooth and would sit to the west of GMT-1.
