October 12, 2004 --- Vol. 10, No. 87October 2004

Pioneer applies to develop new pad at Gwydyr Bay

Pioneer Natural Resources Alaska Inc. has applied to the state of Alaska to construct and operate onshore oil and gas production facilities just north of the Prudhoe Bay unit at Gwydyr Bay, including a four-acre gravel pad, a 2.8-mile gravel access road and pipelines.

The project would develop oil previously discovered and is in the vicinity of BP Exploration (Alaska)’s 1997 Pete’s Wicked discovery.

Produced fluids would be transported by a gathering pipeline system and processed at an existing Prudhoe Bay facility.

Pioneer acquired the leases in the state’s 2003 North Slope and Beaufort Sea areawide lease sales.

“The Gwydyr Bay area contains relatively small isolated hydrocarbon accumulations” discovered during exploration by BP Exploration (Alaska) and ARCO Alaska, Pioneer told the state. “These oil fields have not previously been developed due to their relative isolation and size.”

Pioneer plans an ice road this winter to mobilize a drilling rig and another ice road in the winter of 2005-06 to demobilize the rig. The company said pre-start-up development drilling would begin as soon as practical after completion of the drilling pad and drilling and workover operations would continue intermittently during field life. Five to 12 production wells are planned.

The gravel road, drilling pad and pipelines would be constructed in 2005.

Production is expected to begin in the spring of 2006, with a 10 to 20 year production life.

ConocoPhillips says federal passage will play role in advancing gas pipeline

BP Exploration (Alaska) and ExxonMobil both responded to congressional passage of gas pipeline provisions yesterday (see Oct. 11 News Bulletin). ConocoPhillips, the third major North Slope natural gas owner, provided comments today.

“ConocoPhillips is pleased with the success the Alaska delegation had in getting the pipeline provision package passed before Congress adjourned,” a spokesman told Petroleum News via email.

“We think that this strong show of delegation teamwork will play a significant role in advancing this project,” he said.

“We also look forward to successfully completing negotiations with the state of Alaska on the state fiscal terms that will also be needed to advance the project.”

The federal legislation did not include a tax credit if natural gas falls below a price floor.

Petroleum News asked ConocoPhillips about the company’s often expressed view that the tax credit was a necessary part of the federal package, but the company did not comment on its absence.

Editor’s note: See complete stories in Oct. 17 issue of Petroleum News.

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