ANWR strat well contract extended

Kay Cashman

Petroleum News publisher & managing editor

On April 1, the Alaska Division of Oil and Gas extended ASRC Energy Services’ contract from April 1 to May 31, allowing the Anchorage-based firm more time to pull together a consortium of companies to drill a stratigraphic test well offshore the 1002 area of the Arctic National Wildlife Refuge next winter.

Division geologist Jim Cowan told Petroleum News March 31 that companies wishing to participate in the strat well as original participants must commit by May 31 or “pay a late participation fee, as yet undetermined … if the project goes forward.”

He said ASRC Energy is not charging the state for the extension. The division selected ASRC Energy to assist it in drawing up preliminary plans for the eastern Beaufort Sea well. The contract called for the firm to help the division put together a group of individuals or companies willing to participate in a consortium to drill the eastern Beaufort Sea well. The initial permitting work, which as of April 1 had not started, will not be site-specific in nature. “The location — east or west of Kaktovik — has yet to be resolved because, as I understand it, no company has yet stepped forward, said ‘let’s drill here!’ and started the final dialog. We’ve been led to believe that a company will soon assume that role,” Cowan said.

Some companies have expressed interest in the western location, but “both the Angun Point and Anderson Point areas are still on the table,” he said.

A consortium drilling a strat well on state lands in Alaska is not required to drill off-structure, as would be the case if it were drilling on federal lands. Meaning the consortium can target, and hit, oil. Common in frontier areas, strat test wells are generally designed to provide geologic data about an area, such as defining the nature of petroleum systems, identifying source rock potential and assessing reservoir quality, etc.ASRC Energy Services is a subsidiary of Arctic Slope Regional Corp., the regional corporation representing the Native people of the oil-rich North Slope.

The 1002 area is a 1.5 million-acre strip along the coastal plain of the 19 million-acre Arctic National Wildlife Refuge in northeastern Alaska that was designated by Congress as a study area to be evaluated for its oil and gas development potential. The resource evaluation, conducted by the Department of Interior and released in 1987, recommended that the 1002 area be opened for oil and gas exploration and development.