Oil Patch Insider

Wadeen Hepworth

Unocal plans layoffs; will suspend operations on Baker, Dillon platforms

Nov. 1 is the date currently scheduled for Unocal to begin laying off personnel in Alaska. The Insider learned that management teams have been organized to study the restructuring of the company after the layoffs occur. Some of the managers on the restructuring team have been transferred to Alaska to help with this endeavor.

Unocal will also suspend operations on the Baker and Dillon platforms and rigs 76 and 77 will not start up in September as planned. The date for start up of these rigs had been pushed back several times prior to this announcement.

Recent financial reports show Unocal Alaska with a $6 million after-tax loss for the first quarter of this year and a $5 million after-tax loss for the second quarter. Unocal Alaska had after-tax earnings of $56 million in 2001, and was in the black all four quarters.

But Unocal’s not alone in its belt-tightening. See Gary Park’s story on page 5 of this issue.

SLUGGER NO GO FOR ANADARKO.... Anadarko has decided not to farm into BP's Slugger unit on the eastern North Slope. Does this mean there won't be a well drilled there this year?

PIPE CONTRACT AWARDED…. The contract to provide gas line pipe for the 33-mile Kenai Kachemak Pipeline LLC (KKPL LLC) project has been awarded to Lone Star Steel in Texas. The 12- inch diameter, 40-foot gas line pipe will be produced at the company’s plant at Lone Star, Texas, and shipped to a yet to be decided location where an external protective coating will be applied.

There are two types of protective coatings that can be applied to the pipe, extruded polyethylene or an abrasion resistant (dual layer epoxy) coating. The type of coating chosen will determine the type of cathodic protection system applied and also the transportation routing of the pipe. Engineers are now looking at both types of coating but generally the terrain on the Kenai would use the abrasion resistant coating. Two companies can provide the abrasion coating, one in Fontana, Calif., and the other in Canada.

The pipe bid specified FOB Kenai meaning Lone Star is responsible for the freight charges to the Kenai gas field on Kalifonsky Beach Road. Lone Star is currently gathering final transportation rates.

According to John Lau, KKPL project manager, the pipe is expected to be on site in December. John said the bids for other materials related to the pipeline project are to be let the end of September. The bid for the contractor to lay the pipe will be let Oct. 1.

Construction of the pipeline is expected to begin in January 2003. The staking, clearing and grading is to begin in January and the pipeline trenching to start about the same time. The KKPL is expected to be completed by October 2003.

See related story page 12.

HALL OF FAME SELECTION…. Robert J. (Bob) Allison, chairman of the board of Anadarko Petroleum Corp., has been selected for induction into the Texas Business Hall of Fame. The group honors members whose vision and careers have helped place Texas in the forefront of the economy. Bob is being honored for his achievement in business and community service.

Educated in petroleum engineering at Kansas University, Bob had a 14-year career with Amoco Production Co. before joining Anadarko in 1973 as vice president of operations. He was named president and a member of the board of directors in 1976, CEO in 1979, chairman in 1986 and then chairman of the board in Jan. 2000.

Under Bob’s leadership Anadarko has grown from a small, regional oil and natural gas company into a global energy concern with activities in 14 countries and assets of $17 billion.

Bob is a 13-year veteran of scouting, is a member or the board of trustees of the United Way in Texas, and is a board member and director in many other area organizations such as youth charity and a cancer center.

FIELD PROJECT COMPLETED…. Chris Humphrey, ENSR’s Alaska general manager, reported that the field portion of their Empty Barrel Cleanup Program contract has been completed. The project was part of the BP/Phillips charter agreement to gather and dispose of abandoned barrels across the North Slope. (See story page 2 in Aug. 11 issue of PNA)

Chris said ENSR is in the process of preparing a status report for Phillips Alaska. Phillips will then incorporate the report into their Charter report to ADEC.

SHEPARD MOVES TO CHICAGO…. Sam Shepard, an oil and gas project review coordinator, left the state Division of Governmental Coordination on Aug. 23. Sam is accompanying his wife, Deborah, to Chicago where she will return to school.

Nina Brudie, formerly DGC’s liaison to the Gas Pipeline Office will replace Sam. Contact information for Nina is: phone: 257-1352, fax: 272-3829, e-mail: [email protected]

ALLIANCE NEW SCHEDULE…. The Alliance new fall calendar of events has some changes to note on your calendar.

The annual meeting has been changed from Sept. 27 to Monday, Sept. 23 to accommodate the schedule of the Honorable Spencer Abraham, Secretary of Energy who will deliver this year’s keynote address.

Thursday breakfasts are back on alternating Thursdays starting at 7 a.m. at the Petroleum Club at 3301 C Street. The first breakfast will be held on Sept. 12 with featured speaker Rejane “Johnnie” Burton, director Minerals Management Service, U.S. Department of the Interior.

Plan ahead for Meet Alaska that will be held on Friday, Jan. 24, 2003.

Just in case you wanted to be depressed 2003 is 121 days away.

ROGER HERRERA’S IN TOWN…. Arctic Power, the Resource Development Council and The Alliance are co-sponsoring a special luncheon on Friday, Sept. 6, at the Anchorage Marriott downtown. The speakers will be Jim Calvin, managing partner, McDowell Group and Arctic Power lobbyist Roger Herrera (also Petroleum News • Alaska’s favorite oil price guru).

Jim will speak on “ANWR and the Alaska Economy: An Economic Impact Assessment.” Roger will talk about “Arctic Power: Update on Senate Energy Bill.”

The cost is $20 and the program begins at noon.

TRADE DELEGATION OPPORTUNITY…. The U.S. Department of Commerce is proposing organizing an Information Technologies Matchmaker Trade Delegation to Stockholm Sweden and Oslo, Norway in December 2002. The trade delegations are designed to help you increase your exports by matching your company with agents, distributors, joint venture partners and end users with a proven track record. To receive more information call Monica McFarlane , U.S. Department of Commerce, (202) 482-3364, e-mail: [email protected] or fax: (202) 482-0178.

PERSONNEL CHANGES AT AGRIUM PLANT…. Agrium Kenai Nitrogen Operations are probably searching for office space after hiring six new employees and having a person transfer from Houston. The company announced that Richard Bailey will transfer, this fall, from Agrium’s Borger Nitrogen Operations in Houston, Texas, to work in the Kenai Ammonia Plant 1. Richard has 27 years of experience in the fertilizer industry.

Brian Sweeney, Cody Seymour and Les Bender have been hired to work in the Operations Department, Tom Eberhard and Aaron Dorman were hired in the Maintenance Department and Nancy Peiker will be working in Engineering.

Oil Patch Insider is written by Petroleum News • Alaska columnist Wadeen Hepworth. The Insider appears three times per month. If you have news or a news tip for the Insider, Wadeen can be reached at (907) 770-3506 or via email at [email protected].