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Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

The Explorers 2010: ConocoPhillips Alaska

ConocoPhillips can trace its roots to the start of the modern Alaska oil industry in the 1950s and has played some role in almost every major trend in the Alaska oil industry over the five decades since. In the 1960s its predecessor company ARCO joined with Humble Oil to drill the Prudhoe Bay State No. 1, the Prudhoe Bay discovery well.

Over the past 30 years, ConocoPhillips and its predecessors drove westward expansion on the North Slope: the Kuparuk River unit in 1981, the Alpine field in the Colville River unit in 2000 and Alpine satellites in 2006. ConocoPhillips was the most active explorer in the National Petroleum Reserve-Alaska over the 2000s, and is now looking at an exploration program focused on offshore prospects in the Chukchi Sea. All the while, the company also became the largest natural gas producer in the Cook Inlet.

After reportedly running out of drilling prospects that had largely been identified by predecessor ARCO Alaska, ConocoPhillips did not drill exploration wells on state acreage in Alaska last winter, but the company has continued development work in state producing units and some exploration-related activities in NPR-A, it has formed two units, Greater Mooses Tooth and Bear Tooth. But NPR-A development and production continues to be delayed. The U.S. Army Corps of Engineers denied ConocoPhillips a key development permit in February 2010, a decision ConocoPhillips appealed.

After dropping its Beaufort Sea leases, ConocoPhillips’ major exploration focus became a lease package in the Chukchi Sea. The company plans to drill an exploration well by as soon as 2013, but ongoing litigation, federal regulatory reorganization and increased scrutiny of offshore drilling in the wake of the Deepwater Horizon oil spill could delay that program. In a joint venture with BP, ConocoPhillips held an open season this year for a multibillion-dollar natural gas pipeline from the North Slope to southern markets. In 2010, the company also presented plans to increase deliverability and recovery at the Beluga River unit, one of the most productive natural gas fields in the Cook Inlet basin.

ConocoPhillips is the largest oil and gas producer in the state, booking 252,000 barrels of oil per day and 94 million cubic feet of gas per day in Alaska in 2009. The company leases 1,854,295 net acres onshore and offshore of state, federal and Native land in Alaska.

Current exploration focus:

ConocoPhillips is focused on western expansion into NPR-A and Arctic OCS exploration in the Chukchi Sea. The company hopes to develop prospects in NPR-A, seeking more satellite fields to hook into existing Alpine field (Colville unit) infrastructure. Those plans, however, depend on resolving permitting disputes with federal agencies. ConocoPhillips is gathering 3-D seismic data and doing well-site preparation work in the Chukchi Sea in preparation for drilling an exploration well at the Devil’s Paw prospect, formerly known as Klondike. Working with the U.S. Department of Energy, ConocoPhillips is also investigating the possibility of producing natural gas from North Slope methane hydrate deposits.

In the Cook Inlet basin, ConocoPhillips is continuing development drilling in existing gas fields.



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