Providing coverage of Alaska and northern Canada's oil and gas industry
March 2004

Vol. 7, No. 10 Week of March 07, 2004

Shoppers guide for facilities close to completion

Kay Cashman

Petroleum News Publisher & Managing Editor

The company preparing a “shoppers guide” for space in North Slope production facilities expects to submit a final draft to the Alaska Division of Oil and Gas within the next three weeks.

Petrotechnical Resources of Alaska turned in its first draft Feb. 1 and expects to complete the “final draft of the study before the end of March,” PRA managing partner Tom Walsh told Petroleum News March 3.

Walsh is the “project lead” for the Anchorage-based oil and gas consulting firm’s contract with the state of Alaska to study the cost of purchasing capacity in North Slope oil infrastructure — infrastructure primarily owned by the slope’s largest producers, BP Exploration (Alaska), ConocoPhillips Alaska and ExxonMobil.

Waiting on Alpine

PRA’s final report will focus on nine North Slope production units, including Prudhoe Bay, Kuparuk River, Point McIntyre, Lisburne, Endicott, Milne Point, Colville River which includes the Alpine field, Northstar, and Badami, which is in a warm shutdown. Walsh said the only information they “are waiting on” is from the owners of the Alpine unit, which is not likely to have unused capacity any time in the immediate future.

The state paperwork for the pilot study, awarded to PRA on June 26, suggests the division will serve as a clearinghouse at a preliminary level to give new players a sense of the landscape on the North Slope.

“The objectives of this project are to reduce entry barriers regarding facility sharing and to improve facility access to exploit potential efficiencies, minimize waste and accelerate oil field development,” Walsh said.

Political sensitivities disappeared over time

Initially, there was some political sensitivity around the study, Walsh said. New players and non-facility owners were more enthused about the project than the North Slope facility owners who had to initiate technical work to provide the information PRA was asking for.

But that changed, Walsh said.

“We spent a lot of time initially … creating a cooperative environment … showing how the results would be of mutual benefit to all parties,” he said.

Those efforts paid off.

“I was very pleased, and a bit surprised, by the high level of cooperation demonstrated by all of the companies and agencies involved,” Walsh said. The information supplied by the facility owners and operators reflected “a very high level of effort and thought devoted to the topic of facility access.”

Likewise, he said “the input from third-party producers has been very thoughtful, and many innovative and constructive ideas … emerged in the course of discussions and correspondence over the past nine months.”

Over the past three months, PRA’s focus has been on “synthesizing the input from all contributors into what we hope will be a useful document for those interested in pursuing facility sharing agreements,” Walsh said.

Among other things, PRA’s task list included the following:

• Gather, organize and disseminate information regarding existing North Slope production facility capacities, throughput and constraints;

• Identify areas of potential need for excess production capacity, based on industry activity;

• Describe the existing methodologies utilized to calculate facility access fees for satellite field production, and discuss alternative methodologies which balance the needs of owners and third-party producers;

• Characterize the benefits and shortcomings of facility sharing from the independent producer perspective.

The final result, Walsh said, will help “define the physical and commercial landscape characterizing facility access on the North Slope, recognizing the need to compensate facility owners for their investment and negative production impacts while offering significant operational and commercial advantages to third-party producers.”

The PRA team members involved in the facilities study included Walsh, Cathy Foerster, Jan MacDonald, Bob Kaltenbach, Chantal Walsh and Pete Stokes.

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