Exciting times
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Alaska's acting DNR comm. says projects at every step of development cycle
Kay Cashman Petroleum News
Part 1 of 2: In a Nov. 18 Petroleum News interview with the acting commissioner of the Alaska Department of Natural Resources, John Crowther painted a bright picture of activity and progress on the North Slope over the last decade-plus.
"Right now we see companies at every step of the development life cycle. They're taking the steps of developing exploration campaigns, exploration units, exploration wells, they're moving forward to characterization and there are companies working on project design and development," Crowther said.
"It's a pretty exciting time to be to be on the North Slope," he said, noting it all began with an oil price crash.
This current era - about a decade ago -- "started with a major oil price reduction, major corporate restructurings and changes. It's a hard business and so are the challenges. You have to navigate the challenges, and you have to take advantage of the opportunities and that's what I think we're seeing."
The North Slope hasn't "moved in an upward direction and overall year on year production increase in a measurable sense -- in a double-digit percentage sense -- since the fields started up on the slope and so it really is a new paradigm for Alaska," Crowther said.
"With challenging market conditions overall, we saw lease positions continue to build because of major exploration successes. We saw those prospects mature into projects and all of that is tremendously encouraging. Even in a tight time, there's effort to explore and develop new projects. That brings us to today."
Much North Slope activity is "driven by Alaska's stable fiscal regime," he said, noting that State of Alaska lease positions have continued to build.
But "federal lease sales are important, too", he said, referencing recent notices from Interior about an "NPR-A lease sale in January and ANWR shortly after that."
Reinvestment at Prudhoe Crowther referred to another bright spot -- the largest ever turnaround at Prudhoe Bay this past summer.
"The turnaround at GC1 and GC2 was critical to future production and development at Prudhoe Bay and is an indication of Hilcorp's continued reinvestment and commitment to the field. ... It means Prudhoe Bay is going to continue to be in operation for years and years to come," he said.
Additionally, "production continues to remain relatively flat from legacy fields" on the North Slope which also speaks to company reinvestment.
Not for decades "Depending on what metric you measure -- potential peak throughput, total investment, new facility capacity -- the combination of Pikka and Willow are something that hasn't been seen on the North Slope in decades," Crowther said.
"We've had a lot of activity on the slope in the last decade, but we haven't had a true new greenfield development with its own standalone processing capacity at this scale in a long, long time," he said, referring to Pikka Phase 1 and Willow.
"And then you go one step back, we've got the recent Armstrong discovery out east.
We've got the West Harrison Bay potential exploration out west. And major projects in between," Crowther said.
"As I understand it, the workforce is busier than it's ever been or than it has been in generations," he said.
"Alaska's economic engine is running at full speed ... and has a lot of runway left and so that's very encouraging in and of itself," Crowther said.
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