Phillips hopes to name Alberta Energy operator at offshore McCovey prospect

Deal is not certain, says AEC’s Steve Harding; company has retained former state Oil and Gas Division Director Ken Boyd; Alaska office possible

By Kay Cashman

PNA Publisher

Phillips Alaska Inc. has asked the U.S. Minerals Management Service to allow the McCovey unit owners an extra 90 days to file a new exploration plan. The request was based on Phillips’ desire to transfer unit operatorship to AEC Oil & Gas Inc., a subsidiary of Alberta Energy Co. Ltd. Phillips, AEC and Chevron USA are the working interest owners in the unit.

In May, MMS approved a suspension of operations application from Phillips, operator of the central Beaufort Sea unit. Phillips contended that proposed permit stipulations from the Alaska Department of Environmental Conservation would make the project uneconomic. Suspension approval was contingent on the unit operator filing a new exploration plan by July 31.

In his July 5 letter to MMS, Phillips land manager James Ruud, said he “anticipated” the “operatorship change process combined with the preparation of a new exploration plan will take approximately 90 days,” giving Oct. 31 as the latest date a plan would be submitted to MMS.

Nothing definite

Jeff Walker, regional supervisor for MMS, said his agency would respond to Phillips’ request for an extension by the end of July. He said an additional 90 days “seems reasonable given the complexities of the McCovey project.”

The McCovey unit, which was approved in August 2000 by MMS and the state Department of Natural Resources’ Division of Oil and Gas, includes three federal and four state leases.

This past spring, Phillips halted permitting of the McCovey project due to stipulations from the Alaska Department of Environmental Conservation that Philips said would make the project uneconomic.

Phillips had proposed to drill in an area that is approximately 12.5 miles northeast of West Dock at Prudhoe Bay, 60 miles northeast of Nuiqsut, 7 miles northwest of Cross Island, and 110 miles northwest of Kaktovik.

The state is reportedly meeting with Phillips and AEC to determine if the permitting problems can be resolved.

AEC contracts with Boyd

Petroleum News Alaska Staff

Guy James, an AEC vice president who oversees all of AEC's Alaska operations from Calgary, said Boyd is a "consultant adviser" to the firm.

When asked if AEC was considering opening an Alaska office, Steve Harding, AEC’s Alaska group team leader, told PNA it was “fair to say we’ve always looked at having some sort of office up there. The question is the timing. Until we get some of these pieces formalized, it’s fair to say we hope to open an office there. We would like to have something set up there sooner, rather than later.”