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Oil Patch Insider Airlifting in foreign workers to solve an oil sands labor crunch; North Slope winter exploration plans include 85-mile ice road Kay Cashman, Gary Park, Allen Baker
Shortages of skilled labor have been a constant bugbear and source of cost overruns in the Alberta oil sands.
To find an answer, Canadian Natural Resources is climbing to new heights, with plans to airlift foreign workers to fill some of the 6,000 construction jobs at its planned C$8.5 billion oil sands project.
The Canadian independent plans to conduct its search as far afield as Venezuela, India, Turkey, China, the Philippines, Hungary and South Africa and is building a landing strip near its Horizon project site to enable overseas workers to complete a one or two-week shift, then make a quick plane connection to their homes for a four-day break.
Having observed the multi-billion dollar overruns that have hit all of the recent mega-projects in the oil sands, Canadian Natural has decided that a lack of workers represents a bigger threat than the technological challenges of extracting and processing bitumen.
The company’s board is expected to give its final go-ahead for Horizon in the final quarter, with the pace of construction expected to build in 2005 and peak in 2006.
The three-phase undertaking is scheduled to produce 135,000 barrels per day in 2007 and grow to 232,000 bpd by 2012.
The pool of 6,000 workers will include 5,000 trade jobs and 500 project management staff. XTO decided not to test Cook Inlet coal seam In October, Doug Schultze of XTO Energy told Petroleum News that XTO was thinking about testing a shallow coal seam in a shut-in well on C platform in the company’s Middle Ground Shoal oil field in Alaska’s Cook Inlet.
XTO needed a cheap source of gas for its two platforms, something it had lost when Unocal shut down operations at the nearby Baker platform.
Kyle Hammond, XTO’s vice president of operations for Alaska and the Permian basin, told Petroleum News Aug. 26 that the company decided not to test the coal seam.
“The amount of fuel we needed and were going to get (from the coal) just did not make economic sense.”
XTO, a major coalbed methane producer in the continental United States, is getting gas from shore to run its platforms, something Schultze said more than doubled the cost of fuel for the platforms. Cabinet ministers turn the page on politics Alberta Premier Ralph Klein is losing two stalwarts from his cabinet after the next election, which is widely expected to be called for this November.
Finance Minister Pat Nelson, who has steered the province to debt-free status, and Energy Minister Murray Smith won’t seek re-election.
Held in high-regard in the petroleum industry, Smith earned his spurs, starting out as a rig hand, then launching his own oilfield services company before entering politics in 1993.
Despite a legal spat with Suncor Energy over royalty rates for the company’s latest oil sands expansion and a bitter, drawn-out feud over the shut in of natural gas production in the oil sands region, Smith will leave politics with friends in both the industry and the environmental movement.
The rumor mill now has him moving to Washington, D.C., when the Alberta government reopens an office in the U.S. capital. Canada adds consul in Alaska Alaska has a new Canadian consul, along with a three-person consulate in Anchorage at 310 K St.
The new consul is Karen Matthias, and the office opened Sept. 1. Matthias was welcomed to Alaska by Gov. Frank Murkowski, who noted that Alaska and Canada have had ties that go back more than a century.
The Anchorage consulate is one of seven new offices the government of Canada is opening in the United States as a result of an effort begun in 2003 to strengthen business and diplomatic ties. The consulate will focus on political and economic relations and public affairs.
Canada bought $231 million worth of Alaska goods and services last year, according to Margy Johnson, who heads the state’s office of international trade.
The only other country to have a full consular office is Japan, which has been a major buyer of Alaska fish products for decades. That office opened in 1970.
Other countries — 19 of them — have honorary consuls in Alaska, who appear at various functions on behalf of the countries they represent.
The phone number for the new Canadian consulate is (907) 264-6734, and the fax number is (907) 264-6713. ConocoPhillips issues Kuparuk road access agreement; no tolls yet Until two years ago, the largely privately owned roads in the North Slope’s oil fields were used by mainly two companies and their predecessors, ConocoPhillips and BP.
Between the two they operate all the oil fields on the slope and, with ExxonMobil, own the lion’s share of the facilities, pipelines and roads.
But infrastructure use by other E&P companies is on the rise. In the last two years three new operators — Pioneer Natural Resources, Kerr-McGee and Total — have appeared on the North Slope to drill exploration wells, followed by some appraisal wells this coming winter. Armstrong Alaska, which brought in Pioneer and Kerr-McGee, is also looking at drilling an exploration well this coming winter.
All of these operations required the use of North Slope roads, in particular Kuparuk River unit roads.
The result of this stepped-up activity by non-facility owners was a road access agreement issued by ConocoPhillips in August for both the E&P companies using the Kuparuk roads and the oilfield service and transportation contractors working for those oil and gas companies.
Several contractors contacted Petroleum News with concerns about the new agreement, which mentioned the possibility of tolls for road usage and the necessity of keeping travel logs, which they saw as a time-consuming and costly effort.
ConocoPhillips spokeswoman Dawn Patience told Petroleum News, “The road access agreement is intended for the Kuparuk River unit to address traffic management, safety and environmental concerns brought about by third-party use of the KRU road system.”
The logs, she said, apply to just third-party companies and the contractors working for them — but only when they are working for third-party companies, not for the Kuparuk unit.
Proof of insurance was also part of the road access agreement.
“We want to make sure that other E&P companies and their contractors are aware of our safety rules and that they take responsibility for their own actions, which includes environmental damage, equipment damage, injuries and so forth,” Patience said.
The agreement has been added to Ballot 260, she said, which is “an agreement for third parties to use excess capacity of KRU services and/or equipment.”
“It is not the intent of ConocoPhillips to charge a fee for non-Kuparuk River usage of KRU roads at this time. What it does do is reserve the right to revisit the issue in the future if third-party road use creates additional costs, such as road repair and security issues,” Patience said.
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