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Extended confidentiality possible for ANWR stratigraphic well results
Kristen Nelson Petroleum News Editor-in-Chief
The state would automatically hold confidential for two years the results of a proposed stratigraphic test offshore the Alaska National Wildlife Refuge in the Beaufort Sea, but the commissioner of the Alaska Department of Natural Resources also has the discretion to extend the confidentiality period for data from the well, Mark Myers, director of the Division of Oil and Gas, said Aug. 19.
Alaska Gov. Frank Murkowski requested the division to solicit interest in a stratigraphic test well off the coast of ANWR, with participation in the well open to all organizations willing to share proportionally in the well cost. Earliest drilling would be the winter of 2004-05, although to allow drilling then, the state would need to do site survey work this fall.
The Division of Oil and Gas explained the proposed stratigraphic test well at an Aug. 12 meeting (see story in Aug. 17 issue of Petroleum News); Myers answered questions from the first meeting Aug. 19. Oil and gas companies represented at the second meeting included Anadarko Petroleum, ConocoPhillips Alaska, EnCana and Total E&P USA.
Myers said the state believes statutes which allow extended confidentiality for results of exploration wells would also extend to results of a stratigraphic test well. In addition to the automatic two-year confidentiality period, companies can request that the commissioner of the Department of Natural Resources extend confidentiality beyond the two years if there is unleased acreage in the vicinity of the well. Tax credit would apply Myers also said it is the administration's intent that the 40 percent production tax credit for exploration wells would apply to the stratigraphic well. Regulations being drafted by the Department of Revenue to implement the tax credit will be changed to include a stratigraphic test well, he said (see story page 14).
The credit, part of Senate Bill 185 passed by the Legislature and signed by the governor earlier this year, allows a 20 percent credit against severance taxes for a well at least three miles from other wells and an additional 20 percent credit for wells 25 miles or more from established units, for a maximum 40 percent production tax credit. Exploration seismic programs are also eligible for the 40 percent tax credit. Site survey work this fall The state wants to know if companies are interested in pursuing drilling so that site survey work could be done this fall, and Myers asked companies interested in discussing the proposal to contact him after the meeting. He also asked for companies interested in operating the well. The state, he said, is not interested in being the operator.
Three possibilities exist for drilling, Myers said: an ice island; barge or other bottom-founded vessel; or the SDC, the steel drilling caisson, a bottom-founded arctic drilling platform last used to drill the Beaufort Sea McCovey well.
The purpose of the stratigraphic test well, Myers said, is to gather data for both the eastern Beaufort Sea and the 1002 area of the Arctic National Wildlife Refuge. The state has suggested sites in state waters offshore ANWR, and Myers said state officials would also like to hear from industry on other possible sites for the stratigraphic test well.
Peter Van Tuyn of Trustees for Alaska and Pam Miller of Arctic Connections questioned Myers about permitting and Alaska Coastal Management Program approval for the project. Myers said there are a lot of environmental issues with any well, but permitting issues were hard to address until a determination had been made on how and where the well will be drilled. The stratigraphic test well would be drilled in the winter he said, and work would be planned in consultation with the North Slope Borough and affected communities. As with any well, he said, the Alaska Department of Environmental Conservation would have to approve oil spill contingency plans.
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