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Providing coverage of Alaska and northern Canada's oil and gas industry
March 2005

Vol. 10, No. 10 Week of March 06, 2005

Oil Patch Insider

Calling all 'EnCanans;' first ANS independent producer hauling oil?

There has never been any question about the single-minded commitment of EnCana boss Gwyn Morgan — whether he was milking cows as a kid on the family farm, pounding out his daily 90-minute exercise routine, or blending the divergent cultures of PanCanadian Energy and Alberta Energy Co. to create North America’s largest natural gas producer.

But, along the way, he occasionally causes eyes to glaze over, such as when talked about creating “constitutional meritocracy” at EnCana, which he pledged would grow to become “best in class,” or even a “global super independent.”

Now, he’s taken to calling his employees “EnCanans,” as if they are newly arrived from outer space.

Which raises questions about what to label the rank-and-file at other oil and gas powerhouses.

No problem with TransCanadians and Petro-Canadians.

Devonians are OK, but Anadarkans could be confused with Arkansans.

Talismen would surely, in the interests of political correctness, have to be Talispersons.

There’s a decidedly positive edge to EOGoers.

BPeers has a certain ring of English aristocracy.

From there things get sticky.

ChevronTexans? ExxonMobilers? Burlingtonners?

Forget it. This is getting out of hand.

We need the deft, creative touch of Gwyn Morgan.

Companies vie to be first independent North Slope producer; hauling oil from Spy Island

Two explorers and a shared partner are in a close, albeit friendly, race to sanction the first independent-operated oil production on Alaska’s North Slope.

Big independent Kerr-McGee is in the lead with partner Armstrong Alaska having filed a plan of production operations with the state in December for the Two Bits prospect just off the western edge of the ConocoPhillips-operated Kuparuk River unit.

Kerr-McGee cut a deal with Armstrong, taking over as operator of this winter’s exploration program to earn a 50 percent stake in Two Bits, which it refers to as Ataruq.

If the prospect proves commercial, “we will start production drilling” and begin production by late 2005 from standalone modular facilities, an Armstrong executive said in October.

Behind Two Bits is powerhouse Pioneer Natural Resources’ Gwydyr Bay prospect where the company has said it is targeting first Alaska production as early as 2006. But 2007 is more likely because the company is reportedly in temporary hold mode on drilling the prospect which is just north of Prudhoe Bay.

Another contender is Pioneer’s Oooguruk unit in the shallow waters of the Beaufort Sea.

In mid-February the company began discussions with the state in an on-going effort to confirm favorable development economics at Oooguruk, where Armstrong is also a partner (see story in Petroleum News’ Feb. 27 issue).

Pioneer’s timetable is for first production in the fourth quarter of 2007.

Another strong competitor is Kerr-McGee and Armstrong’s 2004 Nikaitchuq unit discovery, also in the shallow waters of the Beaufort Sea.

Kerr-McGee is drilling at least two delineation wells at Nikaitchuq this winter, as well as one exploration well into the adjacent Tuvaaq unit to the east. (Kerr-McGee, Pioneer and Armstrong are partners in Tuvaaq.)

Insider sources say Kerr-McGee has contracted for four trucks to haul crude from a Spy Island drill site to CPF 3 at the Kuparuk field “on a 14 day test, 24/7.”

“We either make a decision to move forward (with Nikaitchuq development) after this year’s drilling season or not,” Kerr-McGee Alaska Operations Manager Todd Durkee said last year.

A tentative timetable for that development has not been released.

Ogan gets state DNR job

According to a late February article in The Frontiersman, former Alaska state senator Scott Ogan has accepted a position as a natural resource manager with the Alaska Department of Natural Resources’ Division of Mining Lands and Water.

Becky Hultberg, spokesman for Gov. Frank Murkowski’s administration, told the Frontiersman that the job was a classified position, not an appointment.

Canadian service companies eye Pemex offshore contracts

Companies from eastern Canada are interested in helping Mexico’s state oil company Pemex explore potential offshore reserves, the business development manager for Nova Scotia’s department of energy, Frank Sommerville, recently told BNamericas.

“In Nova Scotia, and eastern Canada in general, the oil industry is offshore related, so we have developed companies that have some expertise, especially in serving the offshore industry,” Sommerville told a BNamericas reporter at Pemex’s oil technology conference Exitep in late February.

“We’re here to meet people from Pemex, local industry associations and companies to evaluate the types of goods and services available in Nova Scotia that might have a market here and how best to approach getting into the market,” he added.

The most likely scenario would be “forming a relationship with a local company.

“Most of the companies that we are representing here (at the conference) are small, specialized service companies, so probably the easiest way is a subcontractor relationship. There may be some specialized businesses that Pemex will tell us they are interested in,” Sommerville said.

Yukon premier says build Mackenzie line first

A March 3 article in the Whitehorse Star, “Who spoke for the Yukon? Duncan asks,” is an entertaining read for anyone interested in the two proposed natural gas pipelines from Alaska and Canada’s Arctic.

According to the Whitehorse Star, Yukon’s Premier Dennis Fentie made it clear he wants the N.W.T. Mackenzie gas pipeline finished before construction on the Alaska Highway line from the North Slope and into the Yukon ever starts.

Fentie stated his position on CBC Newsworld’s TV show Politics Feb. 25, telling host Don Newman the Yukon wants the Mackenzie Valley pipeline, which travels through neighboring Northwest Territories, not the Yukon, to be completed first.

Fentie has said he supports the construction of both lines. “This, however, is believed to be the first time he has ever said he wants the Mackenzie line completed before work begins on building the Alaska Highway pipeline, which would travel through the Yukon,” the Whitehhorse Star reported.

“It’s so frustrating because the sell-out’s complete. Who spoke for the Yukon? Not the guy whose plane fare we paid,” Liberal Leader Pat Duncan said in an interview with the Whitehorse Star on March 1.

“Mr. Fentie’s comments set the Alaska Highway project back considerably.”

While she was premier from 2000 to 2002, Duncan fought for the Alaska Highway, wanting to get it built before the Mackenzie line through the Northwest Territories.

Her concern at the time was that if the Mackenzie line was built first, the pipeline from Alaska’s North Slope would never get built.

That’s not necessarily her concern now. “Her big issue … is that this is sending a message to Ottawa to not worry about pushing for the Alaska route,” the newspaper reported.

“He simply laid down and said, ‘Go ahead, that’s fine, work on that one first,’” she said. “Yukoners want and need a champion in Ottawa.”

In a March 1 interview Fentie defended his comments. “He said the producers who own the natural gas in Alaska’s North Slope and the N.W.T.’s Mackenzie Delta have already set the timetables for completing the two projects, with the Mackenzie going first. He said the two projects cannot be built at the same time because of how much money and resources they require,” the Whitehorse Star reported.

The point of Fentie’s comments to Don Newman, the newspaper said, was to let Ottawa know that they cannot delay permitting the Mackenzie line. Any delays on that timetable, alleges Fentie, would push back the North Slope project.






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