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ConocoPhillips unveils plans for Alaska investment, asset sale
ALASKA
A stake in the Willow prospect is among the assets ConocoPhillips is putting up for sale.
CONOCOPHILLIPS announced last week that it wanted to sell a stake in some of its Alaskan oil projects in a bid to offset risk and share the costs of developments it is planning in the state over the coming years.
The company is increasingly bullish about its projects on Alaska’s western North Slope, where recent drilling results have led to resource esti- mates being increased, while the anticipated costs of supply have been lowered. Indeed, ConocoPhillips officials have said Alaska is cur- rently one of the best exploration prospects in the world.
The company is now looking for a partner to share the risks and costs in the state. It anticipates spending $15-17bn in Alaska over the next 10 years. This includes an $11bn investment into new projects planned in the existing Kuparuk, Alpine and Prudhoe fields, as well as $4-6bn to develop the Willow discovery in the National Petroleum Reserve-Alaska (NPR-A).
Under its plan to bring in a partner, Cono- coPhillips would sell up to 25% of all of its
Alaska assets outside its 36% ownership of the giant Prudhoe Bay field by 2021. The package of assets for sale includes old, new and unbuilt projects that represent most of the producer’s holdings in Alaska. The Kuparuk, Alpine and Willow developments that the company will invest in over the coming years are all included.
The company has said it wants to find a buyer that will be similarly enthusiastic about making the investments required to move projects in the state forward.
“We have a lot of exciting work that we are planning to do on the North Slope, and it costs a lot of money,” a ConocoPhillips spokeswoman, Natalie Lowman, was quoted by Alaska Public Media as saying. “So what we’re looking for is a co-venturer, a company that shares our vision for increasing production on the North Slope.”
ConocoPhillips owns 100% – or close to it – in the assets up for sale, and has said that it is unusual for it to own that high a stake in its projects.
PERFORMANCE
Kosmos comes up dry with Resolution well
GULF OF MEXICO
KOSMOS Energy announced this week that the Resolution exploration well, which it drilled in the US Gulf of Mexico in a 50:50 partnership withBP,hasturnedouttobeadryhole.
The Resolution well was drilled in around 600 metres of water to a total depth of roughly 7,700 metres. The well had targeted an “ampli- tude-supported sub-salt prospect in the under- explored western Garden Banks area”, Kosmos said in a November 26 statement. While the well encountered reservoir-quality sands, the pri- mary exploration target proved to be water-bear- ing. Kosmos added that the well would now be plugged and abandoned, with the results inte- grated into the ongoing evaluation of the broader surrounding area.
The Dallas-based company expects to record roughly $55mn of exploration expenses in the fourth quarter of 2019 related to the drilling of the Resolution well.
Kosmos also provided an update on its other operations in the Gulf. The company antici- pates spudding the Oldfield prospect, in which it owns 40% while Hess holds 60%, in early December. Results from Oldfield are antici- pated in the first quarter of 2020. The company
added that it was continuing to high-grade its multi-year infrastructure-led exploration (ILX) prospect inventory in the Gulf, and expected to drillafurtherthreewellsin2020aspartofthis programme.
ILX has become an increasingly popular option in the Gulf. It allows producers to tie back new discoveries to existing production facilities, thus bringing them online at a significantly lower cost than what would be required for new stan- dalone developments.
However, consultancy Rystad Energy said last week that despite “massive” cuts to investment in the Gulf, the region was still poised to achieve another year of record production in 2020, aver- aging over 1.9mn barrels per day (bpd).
According to Rystad, Gulf production has grown every year since 2013, by an average of 104,000 bpd per year. The consultancy noted the “essential” contribution of infill drilling in legacy producing fields such as Mars, Thunder Horse and Tahiti. It added that the top contributors to supply growth in 2019 had so far been the Big Foot and Crosby fields, with the Appomattox field anticipated to make a significant impact by the end of this year.
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