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Explorers 2011: ASRC Exploration to explore Placer Arctic Slope Regional Corp. signed ‘mentoring agreement’ with BP in 2003; also partnering with Savant in Badami revival effort Wesley Loy For Petroleum News
Arctic Slope Regional Corp. long has been a homegrown heavyweight as an oil field services provider in Alaska.
Now the company is building momentum toward a new identity as an actual producer of oil and gas.
It might not be long, in fact, before we see ASRC conducting its own exploratory drilling within its own unit — the Placer unit, which the state’s oil and gas director approved Sept. 9 after a nearly eight-month application process.
Becoming a producer has been a company goal for quite some time. Jacob Adams, former chief executive, stated his vision for ASRC back in 2003, when the company signed a “mentoring” arrangement with BP, operator of the giant Prudhoe Bay field.
“This agreement provides a critical next step in providing ASRC with access to the tools and knowledge we need to become a competitive, independent producer in Alaska,” Adams said.
ASRC will be joining very select company indeed if it does become a producer on the North Slope, where only a handful of companies operate producing fields.
An Alaska Native company ASRC is among the largest of the corporations established under the Alaska Native Claims Settlement Act of 1971. It reported revenue of more than $2.3 billion in 2010.
The company owns title to nearly 5 million acres across the top of the state, and represents the business interests of some 11,000 Inupiat Eskimo shareholders.
ASRC lands have come into play on some important North Slope drilling projects. For example, about half of the ConocoPhillips-operated Alpine oil field is on ASRC leases. And in the mid-1980s, also on an ASRC lease, a Chevron-led program drilled the only exploratory well on the coastal plain of the Arctic National Wildlife Refuge. Results of the KIC No. 1 well remain a secret today.
Incorporated in 1972, ASRC has its corporate headquarters in the North Slope village of Barrow, with major administrative and subsidiary offices in Anchorage.
To date, ASRC has been known mostly as an oil field services provider — a very large one. Its major subsidiary, ASRC Energy Services, is involved in such areas as engineering, regulatory and technical services, operations and maintenance, fabrication and installation of oil field modules and mechanical insulation.
ASRC Energy Services ranked No. 5 among Alaska’s largest private sector employers in 2010 with average monthly employment of more than 2,500, the state Department of Labor said. It was the top-ranked oil and gas company, ahead of such names as BP, CH2M Hill, ConocoPhillips and Schlumberger.
ASRC also is a downstream player with its Petro Star Inc. subsidiary, which operates refineries along the trans-Alaska oil pipeline at North Pole and at Valdez.
Recently, another ASRC subsidiary has been making some news — ASRC Exploration LLC, headed by Teresa Imm, ASRC vice president of resource development.
The Placer unit ASRC Exploration is a minority partner in a project to revive production from BP’s difficult Badami unit on the eastern North Slope. Denver-based independent Savant Resources LLC is leading the effort.
On Sept. 9, ASRC Exploration achieved a significant victory when Bill Barron, the state’s oil and gas director, approved the formation of the Placer unit southwest of the ConocoPhillips-operated Kuparuk River unit.
Gaining the approval wasn’t easy. The state pushed ASRC Exploration to minimize the acreage in the unit, and speed up work commitments.
The 1,480-acre Placer unit ties together parts of four state oil and gas leases. The unit is located about six miles southwest of an oil development known as Palm.
The new unit takes in the site of the Placer No. 1 exploratory well ConocoPhillips drilled in 2004. The well, which was suspended, made an oil discovery, encountering hydrocarbon-bearing sands within the Kuparuk formation.
ConocoPhillips and its Placer partners including BP, which had farmed in ASRC, ultimately decided the discovery was not economic and dropped the leases. ASRC Exploration picked up the acreage in a 2006 state lease sale, and later secured ownership of the Placer No. 1 wellbore from ConocoPhillips.
“The Placer #1 well demonstrated that decent quality oil is present in a thin, but high quality reservoir in the Placer area,” the state’s Sept. 9 unit decision said.
ASRC Exploration made a number of unit work commitments under a two-year plan of exploration.
The company has until Dec. 31 to reprocess and reinterpret newly licensed seismic data shot across the unit acreage.
By June 30, 2013, the company must drill and log a new exploratory well, or re-enter and test the Placer No. 1 well. Either step would mark a significant advancement in ASRC’s growth as a North Slope oil player.
Editor’s note: In 2003, ASRC formed ASRC Pipeline Co., and paid $15.9 million for a 16.667 percent interest in the Alpine Transportation Co., which owns the pipeline that connects ConocoPhillips’ Alpine field in the Colville River unit to the main North Slope pipelines to the east. Teresa Imm is president of this company.
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