Oil prices are acceptable, Alaska has a governor who understands the importance of the oil industry to the state’s economy and a Department of Natural Resources commissioner who is working to attract investment and get discoveries online more quickly. Plus, Alaska has a huge new North Slope oil play that has taken the province from maturity back to adolescence. Companies are preparing to produce the mostly untapped formation, which could double Alaska’s current output, while explorers across the Slope are searching for other missed pools of oil.
To the south companies are exploring new areas and developing innovative technology that is revitalizing the Cook Inlet basin and increasing its output.
All in all, the future of Alaska’s oil and gas production looks promising - and it’s not just talk. On the North Slope players such as ConocoPhillips, Oil Search, Hilcorp. Glacier, Brooks Range, Eni, Hilcorp, Jade, 88 Energy and Pantheon are either actively exploring and/or developing new sources of oil, while BP and Hilcorp are employing technology to squeeze every last drop out of mature fields. Not all these companies are in The Producers, but their efforts deserve mention.
And soon Hilcorp will be taking over all or part of the operatorship of the Prudhoe Bay unit, hopefully doing what the technically savvy company has done elsewhere in the country and Alaska, and that is increase production. Not that BP hasn’t done an excellent job of sustaining output in a field 31 years beyond its plateau, but like other majors BP is hampered by something privately owned Hilcorp is not - layers of management.
As Hilcorp has grown from a small independent to one of the country’s largest, it has cleverly kept its management levels low, enabling employees with ideas for improvement easy access to decisionmakers and allowing it to dedicate more capital to field investment versus salaries.
Special kudos to Bill Armstrong who has brought in several larger company partners, which led to an exploration and development renaissance on the North Slope with the discovery of the prolific Nanushuk formation; a renaissance led today by Oil Search with its partner Repsol.
In the Cook Inlet basin, Hilcorp is the most aggressive explorer and BlueCrest the most innovative at developing new technology, but others such as Amaroq, Glacier and Furie are working to maintain and increase production.
Not to forget ExxonMobil, which continues to work the challenges of producing condensate from the high-pressure Point Thomson unit, as well as champion the sale of the unit’s 8 trillion cubic feet of natural gas for a future export project.
All in all, Alaska production into the future looks solid.
- KAY CASHMAN
