March 12, 1998 --- Vol. 4, No. 14March 1998

Northstar’s third plan of development approved

The third plan of development for BP Exploration (Alaska) Inc.’s Northstar project was approved Feb. 20 by the Alaska Department of Natural Resources. The plan for the unit outlines a three-year timeline that provides for oil production in the first quarter of 2001. The U.S. Minerals Management Service told PNA that it is in the process of approving a three-year suspension of production for the Beaufort Sea unit, which contains both federal and state leases.

Northstar’s new plan outlines a six-part program that encompasses engineering, procurement and fabrication; an environmental impact statement and permitting; the formation of a participating area; island construction and pipeline installation; transport and installation; and rig modification and mobilization. Most of the engineering, procurement, fabrication and permitting are scheduled for next year.

Discussions and review of the participating area will continue through this year with the final decision due in the third quarter of 1999. Island construction and pipeline installation will begin next year and be completed in 2000.

A sealift to transport the facilities is set for third quarter 2000. Rig modification and mobilization are marked for for early 2000.

Critical risks cited in the plan are the completion of the EIS and resolution of a lawsuit filed on Jan. 28, 1997, by Clyde Baxley and the Republican Moderate Party that challenges revisions in the field’s lease terms that were ratified by the Alaska Legislature and signed by the governor in 1996. The Superior Court ruled against the plaintiffs. The case was then appealed to the Alaska Supreme Court which is expected to issue a decision shortly.

The EIS process has been under way for two years. Dames and Moore is the contractor responsible for drafting it for the U.S. Army Corps of Engineers.

Combined estimated costs for the Northstar plan of development are $430 million.

Knowles' unveils NPR-A plan

Gov. Tony Knowles released his administration’s comments and recommendations today in a written statement to the U.S. Bureau of Land Management on its draft Environmental Impact Statement for leasing in the northeast corner of the National Petroleum Reserve-Alaska. It was the last day that BLM was accepting comments.

The state's proposal, which Knowles called an "Alaska alternative," calls for the entire 4.6 million-acre study area, approximately 19 percent of the reserve, to be available for leasing. While proposing to lease the entire study area, Knowles also recommended “special protection” for three “crucial areas.”

He proposed that “leasing be delayed” in the goose molting management area north of Teshekpuk Lake, which comprises 7.5 percent of the study area or 1.6 percent of the entire NPR-A, leaving 92.5 percent of the study area available for immediate leasing;

Knowles asked that “no surface entry be allowed in two critical Teshekpuk caribou migration corridors” to the east and northwest of the lake and that “no surface entry be allowed in Teshekpuk Lake, an important subsistence hunting and fishing area for the Inupiat people.”

No permanent federal classifications or withdrawals are necessary, said Knowles, to ensure adequate protection of the environment and wildlife resources in the NPR-A planning area.

"This recommendation is based on the belief that resource management must be done right," he said. "Doing it right relies on sound science, prudent management and responsible meaningful public involvement. It means using Alaska businesses, hiring Alaskans and protecting the environment."

MMS Sale 170 (Beaufort Sea) proposed for August

The Department of Interior Minerals Management Service said March 11 that blocks offshore the Arctic National Wildlife Refuge will not be included in proposed Beaufort Sea sale 170.

The announcement of the availability of the proposed notice of sale was made at the whaling captains convention in Barrow by MMS Associate Director Carolita Kallaur:

“By not offering any tracts offshore ANWR in this sale, additional time can be taken to further assess the possible cumulative effects on the refuge,” Kallaur said.

MMS said that with the offshore ANWR tracts deleted, the proposed sale 170 area more closely matches the area offered by the state of Alaska last November.

MMS spokeswoman Robin Cacy said this proposal includes 241 blocks, approximately 1.08 million acres. The area deferred for this sale only includes 122 blocks, 618,167 acres.

The sale is planned for August, with a final decision on the sale due in July.

To protect Nuiqsut’s bowhead whale subsistence harvest, industry would be required to obtain certain agreements with the North Slope Borough and the Alaska Whaling Commission for any permanent facilities within 10 miles of Cross Island. That provision is similar to one adopted by the state.

BP awards Badami contract to VECO Operations

VECO Operations Inc. has been awarded a five-year contract for operations and engineering support for the Badami oilfield by BP Exploration (Alaska) Inc., BP said in a statement today.

During the initial phase of the contract BP and VECO will design a managed maintenance system for Badami and finalize commercial terms of a long-term contract that will include performance measures and a risk-reward system of compensation, said BP.

This component, to be completed prior to field start-up late this year, is valued at more than $1 million and is expected to provide about 20 jobs.

Long-term support will create about 12 jobs on the North Slope and in Anchorage. The value of this part of the contract, said BP, is more than $3 million per year.

BP holds a 70 percent interest in Badami and is field operator. PetroFina S.A. has a 30 percent interest. The field is 35 miles east of Prudhoe Bay and holds an estimated 120 million barrels of oil.

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