May 23, 2000 --- Vol. 6, No. 20May 2000

AOGA members tell Anchorage chamber future looks bright

Items of interest from Alaska Oil and Gas Association members at the AOGA-Anchorage Chamber of Commerce luncheon May 22:

Richard Campbell, president, BP Exploration (Alaska) Inc.

While BP Amoco "didn't achieve all that it had envisioned in Alaska (with the sale of ARCO Alaska to Phillips Petroleum), we did, however, get everything we need to ensure a long and successful future for our company and for our industry on the North Slope."

The single operatorship at Prudhoe Bay will save field owners an estimated $100 million a year. "As a result, projects that aren't competitive today will be competitive tomorrow. And by aligning the ownership of all the oil, all of the satellite fields and all of the gas, we've created a commercial environment in which projects can move forward quickly."

BP will pursue all options for moving gas -- liquefied natural gas, gas to liquids and is "aggressively exploring possible options for the delivery of gas via pipeline to the Lower 48. And let's not forget, the U.S. market, U.S. gas market, is the biggest and one of the fastest growing gas markets in the world."

Jim Branch, Alaska production manager, Exxon Mobil Corp.

With Badami in place, Point Thomson is now only 20 miles from existing infrastructure.

Focus at Point Thomson is now on gas cycling, Branch said. Wells would be drilled and the gas produced to the surface to facilities which would separate the liquid condensate which would be sent by pipeline to pump station one. The gas would be reinjected into the reservoir, "preserving the opportunity to sell gas at a later date."

Gas reinjection at Point Thomson a challenge. Gas would need to be compressed to about 11,000 pounds at Point Thomson for reinjection. "That would set a world record and involves many technical hurdles," Branch said.

Thomson partners are in their third year of gathering data necessary to begin the permitting process, "if we're able to confirm that gas cycling is economically viable." Branch said gravel surveys have been conducted in the area to identify a mine site to support well, facility pad, dock, in-field roads and airstrip construction.

Kevin Meyers, president, Phillips Alaska Inc.

Phillips Alaska and its partner Anadarko Petroleum completed three wells and a sidetrack in the National Petroleum Reserve-Alaska this year. The companies are not ready to make an announcement about drilling results, Meyers said. "I'll just tell you this: we'll be back there next year because we were encouraged."

If regulatory approvals come in "and things move well, we hope we can bring Meltwater on in about the next 18 to 24 months."

Referring to ARCO Alaska history, he said: "This year, and I never thought I'd have the opportunity to say this -- we will deliver on the promise of 'no decline after '99.' It is going to happen. It's something we're very proud of. And I probably won't say it again, because now we've got to figure what we're going to move on to."

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