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ChevronTexaco boosts Alaska spending 48 percent
By Kay Cashman PNA Publisher
ChevronTexaco Corp.’s exploration and development budget for Alaska is $37 million this year, up 48 percent from the $25 million the company spent last year, Wade Fennel told PNA Jan. 28. Fennel is development manager for ChevronTexaco’s newly formed Alaska business unit.
He said approximately $13 million of the 2002 budget would be spent on the Point Thomson unit, scheduled to come on line in 2008, and $24 million on other North Slope exploration and development. ChevronTexaco holds approximately 417,300 exploration net acres in Alaska’s Arctic, including the National Petroleum Reserve-Alaska, the central North Slope, Brooks Range foothills, the Beaufort Sea McCovey prospect and the Arctic National Wildlife Refuge. No interest in Cook Inlet — yet Despite its long-standing one-third interest in Cook Inlet’s Beluga River gas field, since its return to Alaska as an explorer, ChevronTexaco has focused its attention on the North Slope.
The members of ChevronTexaco’s Alaska business unit — Alaska SBU, part of ChevronTexaco North America Upstream — are aware that there is another developed basin in Alaska, Fennel said, but Cook Inlet isn’t part of its plans — yet.
“We’re not doing anything yet in Cook Inlet. ... We only have so many resources and we think the opportunities are on the North Slope right now,” he said.
But part of the reason ChevronTexaco isn’t interested in Cook Inlet is because it believes Unocal “has the gas market cornered in Cook Inlet. We were bothered by the contract they entered into with Enstar,” Fennel said, referring to Unocal’s exclusive agreement to provide natural gas to Enstar.
In Chevron’s comments to the Regulatory Commission of Alaska on the Unocal-Enstar agreement, Chevron said it didn’t think the contract promoted gas exploration by other players in the Cook Inlet basin because Enstar is the major buyer of inlet gas.
What about oil?
“Forest has had some recent success in the inlet, but it has been studied pretty heavily by people looking for oil. Anadarko was looking for oil in the inlet; Forcenergy (now Forest Oil) was looking for oil and they found it later on, but there have been a number of companies looking for oil and they have had difficulty finding it in Cook Inlet,” Fennel said.
Still, ChevronTexaco has not ruled out taking another a look at the Cook Inlet basin in the future, he said. Didn’t make producers’ gas team In a June 25 interview with Bob Howard, the Alaska unit’s president and general manager, PNA was told Chevron would like to be part of the North Slope producers’ gas study team, which is just finishing up a $100 million study on the viability of commercializing North Slope gas.
When asked if ChevronTexaco was allowed to join the team, which was put together by BP Exploration (Alaska) Inc., ExxonMobil and Phillips Alaska Inc., Fennel said no.
ChevronTexaco holds a 25 percent interest in the Point Thomson unit on the eastern North Slope next to ANWR. The unit is thought to hold large gas reserves that might be the first to enter a natural gas pipeline to carry North Slope gas to market in Canada and the Lower 48.
The company also picked up 120,000 acres in the gas-prone Brooks Range foothills in the state of Alaska’s May 9 areawide lease sale. The impetus for the investment, Howard told PNA after the sale, was that his company believed North Slope gas would soon be commercialized.
Annual Alaska production at 11,000 barrels ChevronTexaco’s Alaska business unit, which was officially formed in the days following federal approval of the merger of Chevron and Texaco in October, is headquartered in Houston but the group also has an Alaska office, which was opened last year in the Frontier Building in Anchorage.
The unit has 20 members between the two offices, including employees and contractors, Fennel said. The Anchorage office has three full-time employees.
Current Alaska production is 9,500 barrels oil net for Chevron U.S.A. Inc. and 1,500 barrels for Texaco Exploration and Production Inc. for a total of 11,000 barrels, Fennel said.
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