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Canadian firms eye Alaska investments Canadian Natural, Devon Canada look at North Slope oil and gas opportunities Kay Cashman Petroleum News Publisher & Managing Editor
Shell and St. Mary Land & Exploration aren’t the only companies taking a close look at investing in Alaska oil and gas prospects. (See part one of this story in the July 4 edition of Petroleum News.) This year four Canadian oil and gas firms are either taking a hard look at acquiring acreage on the North Slope or have significantly expanded their slope acreage.
The companies include Canadian Natural Resources, which currently has no acreage in Alaska; Devon Canada, which has a minor acreage position; and Talisman Energy’s U.S. subsidiary, Fortuna Energy, and Petro-Canada, which both increased their North Slope land position in June.
According to officials within the four companies, their interest in the state has been spurred by three things.
At the top of the list is the Murkowski administration’s campaign to attract new oil companies to Alaska, which has involved a serious marketing push by the Alaska Division of Oil and Gas. Mark Myers, division director, said the administration’s obvious sincerity, backed up by new incentives such as exploration tax credits, has been a key factor in the agency’s success.
“They can’t help but see there is high level support,” he said, especially in the area of exploration.
The agency has also been “more focused” in its presentations outside Alaska, which, among other things, included booths at the American Association of Petroleum Geologists conference in Houston this past spring, and the North American Prospectors Expo Feb. 4-6 and a visit to Calgary to meet with oil companies there, Myers said. (The Calgary expedition included Alaska officials from the U.S. Minerals Management Service and the Bureau of Land Management.)
Second, but equally important, have been the efforts of North Slope leaseholders Armstrong Oil & Gas, ConocoPhillips, Alaska Venture Capital Group, Anadarko Petroleum and others to find partners for their slope prospects. (In the last two years Armstrong brought Pioneer Natural Resources and Kerr-McGee to the state.)
Third is the interest among a growing number of companies to find new oil and gas reserves in geologically prospective regions. Canadian Natural Resources “kicking the tire around” Corey Bieber in investor relations at Canadian Natural Resources, Canada’s second largest natural gas producer after EnCana, confirmed his firm recently sent several people to Alaska to look at oil and gas investment opportunities on the North Slope.
The visit, he told Petroleum News in late June, was spurred by an interest the independent has in oil and gas drilling opportunities “anywhere in the world” and by the visit and presentation from state and federal government officials earlier this year to drum up interest in Alaska.
“Norway is doing the same sort of thing,” Bieber said. “I think when governments do that sort of thing it certainly prompts companies to take a look at what they have to offer.”
In Alaska, he said, “we’re sort of kicking the tire around” to see what’s there.
Currently, the Calgary-based independent has operations in western Canada, the North Sea and offshore West Africa. The firm has acquired nearly C$300 million in additional oil and gas assets in western Canada in the last three months and plans to spend C$2.55 billion on the conventional side this year, up from its original C$2.29 billion following its recent C$467 million acquisition of heavy oil producer Petrovera Resources.
That has boosted Canadian Natural’s oil output forecast for the year to 283,000 barrels per day from 263,000 bpd, with gas unchanged at 1.32-1.395 billion cubic feet per day.
The company is targeting a 5 percent increase in gas production in 2004, boosted by better-than-expected results from a shallow-gas program in the Helmut area of British Columbia. Devon in scoping mode Houston-based independent Devon Energy sent a representative to Alaska from its Canadian subsidiary, Calgary-based Devon Canada, last fall and again in late June. A northern front-runner in Canada’s Mackenzie Delta, Devon Canada already has a 10 percent interest in two leases in the eastern North Slope’s Point Thomson unit. The adjoining leases are in the western quarter of the unit.
Devon Energy has a 5 percent working interest in the ConocoPhillips-operated Starichkof unit which contains the Cosmopolitan prospect in Alaska’s Cook Inlet basin. But both leaseholds were inherited from acquisitions or mergers and, aside from these minor positions, Devon has not been involved in Alaska’s oil industry.
In a July 8 interview with Petroleum News, Michel Scott, Devon Canada’s vice president, frontiers, said the company was in “scoping mode” in Alaska.
“There appears to be some synergy” between Alaska’s North Slope and Devon’s interest in the Mackenzie Delta, he said.
“Last fall we sent a small group of G&G, logistics and regulatory folks to Alaska to get an idea of the lay of the land. Things are changing there. Also as a northern operator we like to know what’s happening in other jurisdictions,” Scott said.
No decisions to expand Devon’s presence in Alaska have been made to date, he said, but “if something makes sense, it could be an area we could get more active in.”
Editor’s note: The third part of this story will contain an update on the North Slope acreage expansion of both Petro-Canada and Talisman Energy’s U.S. subsidiary, Fortuna Energy.
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