Winstar wants year-round road to Badami; ice roads too costly

Kay Cashman, PNA publisher

The North Slope road system ends 10 miles east of Prudhoe Bay at the edge of the causeway to the Endicott oil field in the Duck Island unit.

A small, Alaska-owned independent oil company would like to extend the road 25 miles east to the Badami oil field.

John Winther, a Petersburg fisherman who founded the Alaska-based independent Winstar LLC, is looking for funding to build a road that would connect the eastern North Slope to the central North Slope’s road system. Winstar has leases near Badami — leases the company can’t afford to explore without a year-round road.

Winstar, whose president is former ARCO Alaska executive Jim Weeks, is likely to be the first small independent producing oil on Alaska’s North Slope. The company plans to drill a well in November on its lease north of the Kuparuk River unit. (See map on page 15 where this story continues.)

Weeks credits Gov. Tony Knowles’ charter agreement with BP and ARCO for opening the North Slope to competition — an agreement that guarantees small, independent oil companies access to North Slope facilities and the ability to market the oil they find.

Industry observers agree that as production declines at the big North Slope oil fields — including fields such as Badami where production never reached its anticipated 35,000 barrels a day and is instead producing 1,500-2,000 barrels a day — the independents will move in.

But Winther says relying on ice roads, barges and aircraft to access eastern North Slope prospects can be cost-prohibitive for smaller companies, which, unlike the majors, are satisfied with 1,500 barrels-a-day finds.

At this point, “building a road to Badami with spur roads to nearby prospects” is “just an idea,” Winther says.

The road is probably going to have to be built by the state, he says. Winther has an estimate that shows the cost of building the 25-mile road would be “$50-60 million, which includes all the bridges. It would be a heavy duty road that could handle the heavy drilling rigs.

“That’s hardly any money in the big picture,” he says.

The big picture

Winther asked Tom Walsh of Petrotechnical Resources of Alaska to come up with a rough estimate of possible recoverable reserves east of Prudhoe, near Badami.

Excluding Badami and the 200 million barrels Point Thomson is expected to hold, Walsh says Slugger, Red Dog, Sourdough and Liberty prospects could hold as much as 483 million barrels.

“That doesn’t include the smaller prospects,” Winther says.

Different approach needed, says Gary Carlson

Carlson said that a year-round road to Badami “would help support further development in the area. They’d obviously have to deal with the environmental concerns. … But they’re right … if the … smaller fields in that area are going to be developed, they’re going to need a different approach than has been traditional with bigger companies and bigger fields,” Carlson said.

One of the problems with ice roads, he said, is that they only allow wells to be drilled in a narrow window in the winter.