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Phillips reorganizes drilling divisions; rig numbers look to grow slowly Wells manager Marty Lemon says company will add two new rigs for western North Slope exploration in the first quarter of the next year Kay H. Cashman PNA Editor-in-Chief
When the legal entity “Shared Services Drilling” disappeared this past summer and BP Exploration (Alaska) Inc. took over as sole operator of the Prudhoe Bay field, Phillips Alaska Inc. reorganized its predecessor ARCO Alaska Inc.'s drilling divisions, adopting he same model BP used to create its new Alaska Drilling & Wells. (See related story on page A10.)
Like BP, Phillips combined its coiled tubing drilling and rotary drilling groups into one division. The former head of the coiled tubing group, Marty Lemon, took over as the new wells group manager for Phillips. Mike Zenghi, who had been responsible for the rotary drilling group, left Phillips to work for BP in Houston.
Phillips coiled tubing drilling activities are now supervised by a new shared services group at BP. Two Phillips employees are on loan to BP for that group (see sidebar to BP drilling story on page A10).
“Our wells group at Phillips is responsible for all drilling and well work at Phillips-operated assets — Kuparuk, Alpine, exploration, Beluga, Cook Inlet activities — with the exception of coiled tubing drilling,” Lemon told PNA in a recent interview.
The number of people overseeing wells within Phillips assets is up slightly, Lemon said, despite the fact that the total number of company employees dropped from 1,460 to 900 following Phillips acquisition of ARCO Alaska and BP's assumption of the role of single operator at Prudhoe Bay. Most of the former ARCO/Phillips employees who were on loan to Shared Services, became BP employees. Rig numbers to grow Despite continuing high oil prices, the number of rigs working Phillips assets on the North Slope has only increased by one from a year ago.
“Today there are three rigs running in Kuparuk, and one rig running at Alpine,” Lemon said. “There is one coiled tubing unit in Kuparuk ... but BP ... handles all coiled tubing drilling in Phillips assets. 1998 was the first time any siginifacent amount of CTD work was performed in GKA. ...
“Counting straight rig days, we actually have four and a half rigs working under our group on Phillips assets ... but that includes workovers. We have commitments to add two new rigs for western North Slope exploration in the first quarter of the next year,” Lemon said.
“Our budgets aren't finalized yet, so were not going to predict rig counts beyond first quarter at this point,” ARCO spokeswoman Dawn Patience told PNA in the same interview. People could be a problem On Oct. 18, Phillips Alaska President and CEO Kevin Meyers told PNA that this winter Phillips would “execute one of our most aggressive exploration programs in recent history.” (See related Phillips exploration story on page A13.)
According to Lemon, the only question mark regarding the current boom in North Slope activities is the availability of qualified manpower: “There might be a problem getting qualified workers for rigs,” he said. “It hasn't been a constraint yet for Phillips, but it's definitely a concern for North Slope contractors.”
Patience said Phillips is “counting on exploration success” to help it boost crude production from approximately 350,000 barrels a day today to 400,000 barrels per day in 2002 and beyond to the end of the decade.
In addition to exploration targets on the western North Slope, Phillips is also “looking at a couple of prospects in Cook Inlet,” Lemon said.
“There's a lot of exploration potential out there. ... We're pretty jazzed about the future,” he said.
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