Operators for hire

Fairweather E&P, Natchiq Technical Services offer exploration, production services for oil companies with leases in Alaska; can provide partial services or turnkey job

Kay Cashman

PNA Publisher

A new type of oilfield service firm has evolved in Alaska: the operator for hire. Pioneered by Fairweather E&P Services Inc. in the mid-1990s, the formation of full-service E&P firms in Alaska was spurred by the inevitable influx of independent oil and gas companies into the state’s maturing oil province and their need for local expertise.

What’s different about Alaska and other mature oil provinces is that some of the incoming oil companies, particularly the smaller ones, don’t want to set up complete operations in Alaska because of its challenging geographical and regulatory environment. Most of the new companies can’t justify the high cost of building the expertise, facilities and equipment it takes to operate in the state.

The full-service E&P firms are positioned to take the pain out of that process.

“We tend to provide services to the smaller companies that the bigger companies already have an in-house staff for. The little companies coming in need our help. … The big ones don’t need a lot of help, they just need the small specialized stuff that we can provide,” Bill Penrose, senior project manager for Fairweather E&P, told PNA.

And then there were two

Natchiq Technical was recently selected by Denver-based Armstrong Resources LLC to oversee planning, engineering and implementation of Armstrong’s 2002-2003 North Slope exploration program, which involves drilling three wells between Kuparuk and Thetis Island.

“David Johnston, John Lewis, Jim Abel and their staff at Natchiq Technical have a firm grasp of operational and environmental hurdles for exploration and production operations in the Arctic. … Natchiq Technical has experienced people who are cognizant of how a program needs to be conducted, what needs to be done, when it needs to be done and where to obtain all of the services needed for safe, efficient operations,” Stu Gustafson, vice president of operations for Armstrong Resources, told PNA Aug. 14.

Gustafson, a geologist, has 18 years of experience in Alaska, including North Slope exploration. He believes Natchiq Technical can “greatly enhance a company’s local engineering, purchasing and logistics capabilities in Alaska.”

Both Fairweather E&P and Natchiq Technical are part of a larger group of companies with long-term experience in Alaska’s oil patch — The Fairweather Companies and Natchiq Inc., respectively. These affiliations, they say, allow the firms to share resources and expertise with their sister companies and to provide a wider assortment of services to clients.

Business likely to grow

Five years ago there were seven or eight independents in Alaska. Today there are 24. And more are expected to move in as the majors such as BP wind down exploration activities in the state and look for bigger finds in the Gulf of Mexico and abroad.

Independents such as Winstar and Alaska Venture Capital Group are looking to develop smaller pools of oil on the North Slope. Together, geologists say these smaller fields could hold the equivalent of another Prudhoe Bay.

Some of the independents initially came to Alaska to partner in prospects with two of the state’s largest oil companies and major infrastructure owners on the North Slope — BP Exploration (Alaska) Inc. and Phillips Alaska Inc. But more and more companies are branching out to get their own leases. An example is independent Anadarko Petroleum Corp., which has been a long-time North Slope partner with the majors, but struck out on its own last year to operate its first exploration well, the Altamura No. 1 in the National Petroleum Reserve-Alaska. Another example is Unocal.

Another source of possible business are the larger independents, such as Petro-Canada and Burlington Resources, who have picked up gas-prone leases in Alaska in expectation that a natural gas pipeline will be built from the North Slope to move gas to Lower 48 markets.

Others, such as TotalFinaElf, are looking at the oil potential of the Natural Petroleum Reserve-Alaska, which is unlikely to produce another Prudhoe Bay (13 billion barrels-plus) but might produce Alpine-sized fields (429 million barrels).

Editor’s note: In this story it says there are 24 independents active in Alaska today. There are actually 25 if you count Devon Energy which has a small piece of the Cosmopolitan unit in Lower Cook Inlet, but appears to have no plans to expand in Alaska.

SDC goes into quiet mode for whaling season

Kay Cashman, PNA Publisher

Soren Christiansen, EnCana’s drilling manager, told PNA that cold stacking (“go quiet” mode) of the drillship was completed on Aug. 14.

“All people are off the vessel and it’s totally shut down, as promised,” he said, referring to EnCana’s conflict avoidance agreement with the Alaska Eskimo Whaling Commission. Under that agreement, the drillship will not generate noise during the Native subsistence whaling season, which traditionally occurs from early September through early October.

“We’ll go back (to the SDS) in late October and drill in mid-November,” Christiansen said.

When asked about Fairweather E&P’s performance to date on the McCovey project, an EnCana spokesman said, “We’re happy with the services and things have gone well.” The spokesman noted that every phase of the operation to date has been completed on schedule or ahead of schedule.

In the exploration plan it filed with the U.S. Minerals Management Service, EnCana said additional exploration or delineation drilling may be considered during the 2002-2003 drilling season, depending on the outcome of the No. 1 well.

“If this initial well shows potential for hydrocarbon development, the original hole may be plugged back and sidetracked to a different bottomhole location,” EnCana said. The sidetrack, McCovey 1A, would be on OCS lease block Y-1577, just southwest of the surface location.

If drilling results are successful, EnCana told MMS, it may keep the SDC on location for further exploration and delineation drilling in subsequent seasons.

The McCovey unit includes three federal and four state leases in the central Beaufort Sea about five miles northeast of Reindeer Island and 12 miles east of the Northstar field. Phillips Alaska Inc. and Chevron are also partners in the unit.

The SDC is owned by Seatankers Management Co. of Oslo, Norway, and managed by Anchorage-based Fairweather E&P, which recently finished refurbishing and towing the drillship 600 miles from Port Clarence to McCovey.

Stacked for 10 years, the SDC was built for the Arctic by Canadian Marine Ltd. in 1982 using a former tanker as a shell. It was last used on ARCO Alaska Inc.’s Cabot project in the Beaufort in 1991.