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Vol. 12, No. 46 Week of November 18, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

THE EXPLORERS 2007: Petro-Canada: From operator to partner

Kay Cashman

Petroleum News

A better headline for this story might have been “Petro-Canada: From possible operator to partner” because the company had not actually drilled a well in Alaska when it decided to continue to play the role of partner in its latest Alaska acquisitions.

In fact, the Calgary-based major staked eight well locations in 2006 and was moving forward with permitting a multiyear exploration drilling program in the undeveloped National Petroleum Reserve-Alaska when, in January 2007, it announced that it had formed a partnership with FEX, a subsidiary of Calgary-based Talisman Energy. FEX was the operator.

Since that time the two companies have cross-assigned the majority of their NPR-A leaseholdings, covering about 1.2 million acres. By October 2007, Petro-Canada’s net position in NPR-A was just over 500,000 acres.

In the first quarter of 2007, FEX drilled three exploration wells on the partners’ NPR-A acreage.

The only place Petro-Canada and FEX aren’t partnered in NPR-A is in the southeast corner, which is the western edge of 2.2 million acres that runs between the Colville and Canning rivers along the southern border of the North Slope, which is generally referred to as the Brooks Range Foothills or the North Slope Foothills. That acreage is jointly held by Petro-Canada, BG Alaska and operator Anadarko Petroleum.

When Petro-Canada joined Anadarko’s joint venture in 2004, it contributed 430,000 acres of its own Foothills acreage, picked up since entering Alaska in 2001.

Aggressive explorer

The first headline about Petro-Canada in Alaska appeared in the May 28, 2001, issue of Petroleum News. It read, “Petro-Canada breaks policy, crosses U.S. border into Alaska” by Gary Park.

“Taking a leaf from the playbook of Alberta Energy Co., Petro-Canada has decided to get a foot in both Arctic camps by emerging as one of the leading bidders in the first North Slope Foothills Areawide Oil and Gas Lease Sale. … extending its substantial Arctic interests from the Mackenzie Delta into Alaska,” Park wrote.

Company spokesman Chris Dawson told Park that Petro-Canada was “positioning ourselves for future exploration and development and the prospect of getting gas out of Alaska to the North American market” — a strategy that remains on the company’s home page in 2007.

“For Petro-Canada, it’s a mild reversal of a staged withdrawal over the past two years from any plays outside Canada,” Park wrote, noting that even though Petro-Canada was not part of the Mackenzie Delta consortium looking at building a Mackenzie Valley gas pipeline, Petro-Canada (was) one of the “boldest” Mackenzie stakeholders … “kicking off Canada’s first Arctic exploration in 24 years in partnership with Anderson Exploration.”

By the end of 2007 Petro-Canada will have invested close to C$200 million in Alaska.



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