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Oil Patch Insider
BP wants four rigs at Prudhoe; Forest lays off Alaska workers A Petroleum News source at BP Exploration (Alaska) said Nov. 10 that BP plans to put a fourth conventional rotary drilling to work in the “greater Prudhoe Bay area in the next couple of months.”
A “tender” — request for proposal — was scheduled to go out to drilling companies “in the next day or so.”
Later this month BP put a third conventional drilling rig into service at Prudhoe (see story in Nov. 2 edition of Petroleum News). In 2002 and 2003 to date only two conventional drilling rigs were working in the greater Prudhoe Bay area. The addition of a fourth rig will bring Prudhoe’s conventional rig count back up to 2001’s three to four rig level.
Two of the rigs are doing in-field drilling as BP continues to look toward adding production from existing fields. BP spokesman Daren Beaudo said the third rig’s work could also include in-field drilling, but there has been no indication from BP what the fourth rig will be doing. The bad news That’s the good news. The bad news is Forest Oil is laying off workers in Alaska.
Petroleum News has received three phone calls from Forest employees and their associates about “a few” Alaska staff members being laid off on Monday, Nov. 10. Leonard Gurule, Forest’s top executive in Alaska, said Nov. 13 that Forest does not comment on personnel issues. (See front page story about Forest in Alaska in last week’s Petroleum News.) Homer residents want state to buy back shallow gas leases At a Nov. 12 public forum in Homer put together by the Kenai Peninsula Borough to discuss shallow-gas development in the area, several Homer residents urged state resource officials to buy back eight shallow gas leases issued to Lapp Resources in the hills around their town before exploration begins. Initially leased to Lapp, which has said it is contemplating coalbed methane exploration, six of the eight leases have since been acquired by Unocal in a private transaction between the two companies.
A panel of state officials was on hand to provide information and answer questions from local residents, including Mark Myers, director of the Division of Oil and Gas; Dick Lefebvre, deputy commissioner of the Department of Natural Resources; and Pat Galvin, DNR project manager for coalbed methane.
Bill Popp, oil and gas liaison with the borough, and Alaska Sen. Gary Stevens, R-Kodiak, who represents the Homer area, were also in attendance.
The Associated Press reported that Homer residents “were sharply critical of the state’s new fast-track laws for shallow-gas development.”
The program was designed to bring new royalties to the state and to provide a local source of relatively cheap, clean natural gas, DNR officials said. Unocal looking at conventional gas wells near Homer AP reported that Unocal is looking at “conventional gas wells” on its Homer shallow gas leases.
That would mean Homer wouldn’t face the proliferation of small wells and roads that coalbed methane opponents fear in the Matanuska-Susitna Borough. But it would mean conventional drill rigs would be used for drilling operations versus the smaller, water-drilling-rig-sized coalbed methane rigs.
Under the state’s shallow-gas leasing program, state officials said at the Nov. 10 public meeting (see above news item), exploration wells under the shallow gas leasing requirements would be exempt from Department of Environmental Conservation permits as well as local government comments, which are usually made through the coastal zone management process. Wells would also be eligible for waiver of other state permits as well, they said.Unocal officials did not attend the Homer meeting.
In the AP report, Alaska Division of Oil and Gas Director Mark Myers said Unocal’s plan to seek a shallow gas-bearing formation with conventional drilling equipment makes sense, given what’s known about the area’s well-mapped subsurface.
The Homer area also has potential for coalbed methane, with some of its shallow coal seams visible along the Kachemak Bay bluffs. But it’s hard for a company like Unocal to gauge that potential without extensive test drilling, Myers said.
Controversy in the Mat-Su area has resulted in what is expected to be a temporary moratorium from Gov. Frank Murkowski on shallow gas leasing by the state. (See earlier Petroleum News articles on this subject by searching the archives at www.PetroleumNews.com)
Gasoline price dropping to lowest level since July The nationwide average price for gasoline has fallen to its lowest level since mid-July, according to a survey by the American Automobile Association. But the number is still 3.9 cents above the price a year ago. The average price on Nov. 11 was $1.504 per gallon for self-service regular gasoline, AAA reported. That was a decline of 5.6 percent from mid-October.
Gasoline prices reached $1.737 per gallon over the Labor Day weekend, the highest ever recorded in the survey.
The price decline is mostly attributable to improving inventories, lower seasonal demand, and the end of special summer fuel formulations required in many areas to meet clean air rules, AAA said. Summer grade fuel is more expensive to make than winter gasoline.
AAA’s report was based on data from the Oil Price Information Service.
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