COP: Down but not out
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ConocoPhillips Alaska going from zero to 4 rigs on North Slope in 2021
ConocoPhillips Alaska President Joe Marushack said Nov. 18 that in the wake of the defeat of Ballot Measure 1 and a stabilization of oil prices in the $40 range, the company hopes to restart drilling projects on the North Slope beginning in mid-December, pending corporate budget approvals.
Marushack made the announcement at the Resource Development Council of Alaska's annual conference.
He cited the defeat of Ballot Measure 1 as the main reason for restarting drilling.
“Since April when COVID-19 caused oil prices to drop and we were facing a potentially large increase in oil taxes, we've had no rigs running in the Prudhoe Bay, Kuparuk River and Colville River units,” he said.
“This year has been a really tough year,” Marushack said, setting the tone with a quote from American boxer Muhammad Ali - “You don’t lose if you get knocked down. You only lose if you stay knocked down.”
“It’s now our plan, pending corporate budget approvals, to have three rigs total working in Kuparuk and Colville in the second half of 2021,” and “by the end of 2021, there will be four rigs running between GMT2, Alpine and Kuparuk. This is three more rigs than would have been running if Ballot Measure 1 had passed,” Marushack said.
Starting in DecemberSpecifically, Marushack said ConocoPhillips Alaska’s hopes are to do as follows:
* Start up Doyon Rig 25 before year end to resume the drilling that was halted at CD5 in April due to COVID-19.
* To begin 2021, Doyon 25 will move from CD5 to drill at GMT2. “We will start drilling there in the first half of 2021 with first oil planned in the fourth quarter. GMT2 will require an additional 35 miles of ice roads, 100-acre ice pad, and a 3-acre multi-season ice pad which will be built starting in January.”
* A 25-day turnaround at Alpine in July 2021 “which will allow us to execute the Alpine Brownfield expansion projects that include the Slug Catcher, Gas Expansion and Power Expansion.”
* In the second half of 2021, commission and start-up the new build extended reach drilling rig, Doyon 26 (also known as the Beast), which will begin drilling the Fiord West field from the Alpine CD2 drill site.
* Also, in the second half of 2021, drilling in the Kuparuk River unit will restart. “We are planning on bringing a coiled tubing drilling rig back to the field, as well as a rotary rig workover program.”
Marushack also said Prudhoe Bay unit activity “is dependent on reaching a consensus with the major working interest owners. That discussion is still under way.”
A note of cautionAlthough he was pleased Ballot Measure 1 had been defeated and policy making was back in the hands of the Alaska Legislature “where it belongs,” Marushack also cautioned state lawmakers to be careful not to overburden the oil industry with taxes.
He noted each drilling rig nominally employs about 100 people and each of those jobs supports multiple other jobs throughout Alaska’s economy.
Marushack emphasized that with better oil prices and a stable, competitive fiscal framework, more investment will likely make it back into ConocoPhillips Alaska’s plans, putting even more Alaskans back to work.
Marushack retiringMarushack also told RDC attendees he was retiring at the end of January after 38 years with ConocoPhillips.
Erec S. Isaacson, who has been with ConocoPhillips for nearly 13 years, will be replacing him.
According to Isaacson’s LinkedIn page, most recently he was vice president of the company’s Gulf Coast Business Unit; before that vice president of the Rockies Business Unit; prior to that president and general manager of ConocoPhillips Indonesia; before that president of ConocoPhillips Qatar; and finally, prior to that vice president of commercial assets.
A native of Colorado, Isaacson earned a bachelor of science degree in geophysical engineering from the Colorado School of Mines in 1986.
He began his career with Phillips Petroleum in Bartlesville, Oklahoma, in 1986 as a geophysicist in upstream technology.
In 2006, he moved to Alaska for four years where he first held the role of manager, Alaska Exploration, and later as vice president, Commercial Assets, with accountability for non-operated, pipeline and Cook Inlet assets.