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Anadarko looking at five separate plays in foothills Company concerned about space in prospective gas pipeline for discoveries yet to be made on North Slope Kristen Nelson PNA News Editor
Anadarko Petroleum Corp. is poised to begin shooting seismic this winter over as many as five gas plays in the foothills of the Brooks Range on Arctic Slope Regional Corp. exploration license acreage and on state oil and gas leases.
But the company is concerned that with its exploration in the early stages, space in a proposed gas pipeline could be taken before Anadarko has gas ready to bring to market.
“Right now, we feel that there may be the potential for five separate plays in the Brooks Range foothills alone,” Greg Pensabene, vice president of government relations and public affairs for Anadarko in Washington, D.C., told the Resource Development Council's annual conference in Anchorage Nov. 16.
“Developing just one new exploratory play over the course of 15 years could mean roughly $10 billion investment in seismic work, exploration and development drilling, production facilities and connecting pipeline,” Pensabene said.
“If you figure that three-quarters of that investment stays in the state of Alaska and you apply a conservative multiplier of 4, that's a $40 billion impact right there.”
In addition to benefits to state and U.S. consumers, Pensabene listed jobs for Alaskans and revenues to the state as benefits from new gas discoveries.
“It will also,” he said, “give established oil producers the flexibility to continue using North Slope gas to drive their oil production a lot longer.”
Anadarko has “already done quite a bit of work short of seismic and drilling to identify what we think is a very sizeable potential gas resource. “We'll continue to do seismic work there,” he said.
“We're willing to do the exploration work.
“And if we can get access to a pipeline, we'll spend the dollars it takes to develop any discoveries that we have. Again, as I mentioned, we think there's a possibility of at least five gas plays in the area where we're working.”
Anadarko concerned about gas pipeline access But, he said, “the key to the development of any new gas in Alaska in access to transportation. I know a gas pipeline has been the main topic of the energy debate in the state for the last year. LNG terminals may handle a portion of the gas exports from Alaska in the long run, but the base-load supply will likely leave this state via pipeline.
“Before we undertake these multi-billion-dollar exploration and development projects, we have to be assured there's room in the pipeline for new gas. So we believe it's important that the companies who will be developing new gas resources in Alaska have a seat at the table in planning for new pipelines. Our company certainly has a vital interest in this.”
Anadarko's concern is with timing, Pensabene told PNA:
“What can happen is that before we make a discovery, before developing a discovery, all of the space in the pipeline could potentially be committed and the only way we could get into the pipeline at that point would be to buy out someone else, and that could be very expensive.”
Asked if Anadarko would propose owning a portion of a gas pipeline, Pensabene said “being an owner doesn't help you get access” to the pipeline.
At some point, he said, “they have open season — and they will ask people to subscribe to space in the pipeline.”
The difficulty for Anadarko could come if that open season occurs before the company has gas ready to put in the pipeline, “so what we're suggesting is … when you're planning this pipeline, at least keep us in mind and maybe give us a seat at the table.”
“And not just us. Because we think there are going to be others — we just got a little bit ahead of other people with some of the work we've already done.”
Anadarko emphasizing gas Worldwide, Anadarko's reserves worldwide are more than 1.9 billion barrels of oil equivalent, evenly split between oil and gas, Pensabene said.
The company is currently “the single most active driller in North America, with 78 rigs running,” he said, and interests in another 22 rigs operated by others.
“The vast majority of our capital budget is dedicated to North American natural gas,” Pensabene said. The company also has exploration and development in 15 other countries.
Anadarko was high bidder on 42 tracts in the Nov.15 state oil and gas lease sale — some 230,000 acres southeast of Prudhoe Bay.
“We targeted this acreage because we believe it's gas prone. And while there was a lot of interest in the sale, we didn't have a lot of competition for these particular leases, but we think before long, other companies are going to follow suit. This could hold huge ramifications both for the industry and for the state of Alaska, which stands to gain a lot in terms of tax and royalty revenues and economic development opportunities.”
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