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Committed to Willow ConocoPhillips obeys court decision; remains dedicated to core Alaska biz Kay Cashman Petroleum News
The federal District Court in Alaska recently upheld appeals challenging the validity of the environmental impact statement and the associated polar bear biological opinion for ConocoPhillips Alaska’s Willow oil field development in the northeastern National Petroleum Reserve-Alaska. The result is that ConocoPhillips will not be able to start any on-the-ground work to develop the field until the Bureau of Land Management has reworked and approved the EIS, and the Fish and Wildlife Service has reworked the associated biological opinion.
ConocoPhillips had hoped to start gravel work and road construction for the project in February of this year.
But the company has not given up on Willow, which at last estimate will yield some 586 million barrels of oil over its 30-year field life.
The field will produce oil from the Nanushuk formation in the Bear Tooth unit, west of the Greater Mooses Tooth unit, where oil is already being produced by the company. Oil production at Willow is projected at 160,000 barrels per day, with the field having production capacity of 200,000 bpd.
Field development will involve the construction of up to five drill sites, a central processing facility, an operations center pad, up to 37 miles of gravel roads and an airstrip, as well as the installation of necessary pipelines.
“We, and many important stakeholders, remain committed to Willow as the next significant North Slope project,” ConocoPhillips told Petroleum News on Aug. 30.
“The merits of the project represent a strong example of environmentally responsible development that offers extensive public benefits, including significant employment of Alaskan skilled labor from union and non-union trade associations and financial payments to federal, state, borough, and community governments.”
Alaska’s congressional delegation agreed with ConocoPhillips, Arctic Slope Regional Corp., and other stakeholders in the project, weighing in on Gleason’s decision.
“Yet again another devastating decision by this federal judge that promotes the interests of Lower 48 radical environmental groups waging their unrelenting war on Alaska’s economy, working families, and Native communities,” Sen. Dan Sullivan said. “This decision won’t do one thing to help the environment. To the contrary, it further delays one of Alaska’s most strategic energy development projects, which will benefit our adversaries that produce oil, like Russia, Venezuela and Iran, whose environmental standards are some of the worst in the world.”
Sen. Lisa Murkowski said Gleason’s decision was “just plain wrong. … In partnership with communities on the North Slope, ConocoPhillips Alaska has been responsibly producing oil from the NPR-A region for decades under the highest environmental standards and this proposed project will be no different.”
Continues to review decision “In order to determine the best course of action for advancing the Willow project,” ConocoPhillips continues to review U.S. District Judge Sharon Gleason’s Aug. 18 decision to vacate BLM’s approval of Willow.
ConocoPhillips also said it still “strongly” believes that BLM and cooperating agencies “performed a robust, thorough, and extensive review of the Willow project,” and will again engage with the relevant agencies to address the matters described in the Court’s decision.
“On a parallel path we will continue to perform engineering design work in anticipation of a future final investment decision (FID),” the company said.
However, given the recent Court decision, ConocoPhillips said it did not expect to make the FID decision in 2021 as originally planned and continues to be clear that it “won’t make the FID until the legal risks are resolved.”
No impact on core biz Regarding ConocoPhillips’ other exploration, appraisal, development and production interests on the North Slope, the company told Petroleum News: “The Willow decision on August 18 has no direct impact on the remainder of the company’s core business in Alaska.”
Those words are not surprising, in light of what ConocoPhillips Alaska’s top executive Erec Isaacson has been saying in recent weeks: “After working through last year’s market volatility and the pandemic, the theme for us this year has been Getting Back to Work, and we are full speed ahead.”
“Alaskans are back to work on the North Slope,” he continued, “and ConocoPhillips is investing in Alaska’s future. The state’s economy is no doubt still on shaky ground, but we are fully engaged in multiple large-scale projects.”
Among those activities:
*The restart of drilling in the Kuparuk River unit with a workover rig in the third quarter, followed by a coiled tubing rig in the fourth quarter and rotary rig drilling in the second quarter of 2022.
*The first Fiord West well was spud in second quarter. It will test more than 45 million barrels of oil equivalent from the existing CD-2 pad and be tied back to infrastructure with first oil scheduled later this year.
*The GMT-2 project is in its third and final construction season.
*A new oil discovery in the Nanushuk formation at the Coyote prospect just west of Kuparuk.
*Alpine expansion, Nuna development and ongoing work at the Eastern NEWS at the Kuparuk River unit are a few of those projects.
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