Jack-up rig likely for summer 2003

Petroleum News Alaska Staff

Plans to bring a jack-up rig to Cook Inlet are on track, Mark Landt told PNA Nov. 12.

Landt, vice president of land and new business ventures for Prodigy Alaska LLC, confirmed that Forest Oil Corp. and Prodigy have led the effort to bring a jack-up to the inlet for offshore exploratory drilling. Escopeta Oil and Gas Corp. is also part of the team; ConocoPhillips Alaska Inc., he said, was part of the initial group but has backed out.

A source at ConocoPhillips said the company was not prepared to make any upfront commitments at this time, but would “likely come in later and likely pay a higher price” for use of the rig.

“Companies will be coming out of the woodwork to use that thing, once they get one here,” he said. “There are lots of prospects to explore in the inlet that can’t be reached by platforms or from onshore.”

Gary Carlson, senior vice president and in charge of Alaska for Forest Oil, agreed. When asked which Forest Oil prospects would require a jack-up rig to drill, he said, “All of the offshore prospects; we are not able to drill extended reach from shore for any.”

Fairweather in charge

Carlson said Fairweather “is the process of gathering sea floor data now. … Locally we are still planning for the program in 2003 but our capital budget has not been formalized yet. A rig search has been made but” no rig had been selected as of Nov. 12.

Landt said preliminary permitting to get an air quality permit for the vessel that will be transferable to the operators has also been initiated by Fairweather.

Prodigy is “in the stage right now of seeking funds to fund our share of the project,” Landt said, although he would not talk about where the funding was coming from. “It’s fair to say we’re in the process and feel optimistic.”

Prodigy will be using the rig, expected to be a class 400 jack-up that can handle deeper wells, to target a deep oil zone in its only oil and gas prospect in Alaska, the Northern Lights. The 9,683 acre prospect lies between ConocoPhillips North Cook Inlet unit and Forest Oil’s Corsair prospect.

The jack-up, a self-elevated platform with three legs, will be transported to Alaska on a heavy lift vessel. Once on location the vessel will “ballast itself down until the jack-up rig floats off of it,” Carlson said in an earlier interview.

“They jack the legs down to the bottom and then push the platform above water,” he said.

The last time a jack-up rig worked in the inlet was in the early 1990s.

Inlet is place to be with high oil prices

“There’s a large amount of oil still to be potentially recovered. There’s something like 700 million barrels of oil still in place in the Trading Bay unit alone. So it’s a matter of being able to put projects together to go after that economically, to be able to commercialize it,” he said.

“There are 15 different oil reservoirs or oil zones, benches we call them. And the most prolific ones have been swept, have been flooded, water flooded,” Morell said. “But it’s the tighter zones and the areas of the field furthest off the fringes and the flanks, the nooks and crannies, if you will.”

“If the oil price were to firm up” … Cook Inlet’s “exactly the kind of place that would be focused on domestically — it’s a significant resource. Infrastructure’s in place,” he said.

Morell said the lack of a jack-up rig for Cook Inlet has been a real handicap for exploration.