Page 9 - NorthAmOil Week 24

NorthAmOil PROJECTS & COMPANIES
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ConocoPhillips gearing up for push in Alaska, Eagle Ford
US
US-BASED ConocoPhillips is making moves on two fronts. is week, the company announced that had agreed to buy 100% in the Nuna oil dis- covery, comprising 21,000 acres (85 square km) on Alaska’s North Slope, from Caelus Natural Resources. e acreage is located just east of the Colville River, around 5 miles (8 km) southwest of the Oooguruk eld, which is operated by Ita- ly’s Eni, and close to ConocoPhillips’ Kuparuk eld. Indeed, the company can use infrastruc- ture from Kuparuk to develop Nuna.
“ at’s why it makes a lot of sense,” a Cono- coPhillips spokeswoman, Natalie Lowman, was reported as saying. However, she declined to disclose the terms of the deal, which requires approval by the Alaska Department of Natural Resources (DNR).
Alaska Public Media noted that ConocoPhil- lips is the biggest player west of Prudhoe Bay. e company has been one of the players that has continued to pursue new oil developments in Alaska even as a number of other producers opted to focus on more easily accessible shale opportunities in the Lower 48 US states amid slumping oil prices. Indeed, the acquisition comes after Caelus ran into difficulties as a result of the collapse in oil prices. e company delayed the development of Nuna, a er saying in 2014 that it expected rst oil from the project in 2016. Caelus also delayed further exploratory drilling at its Smith Bay o shore oil discovery, which it announced in 2016, and sold its stake in the Oooguruk eld to Eni. e Smith Bay delay was attributed in part to uncertainty related to Alaska’s now-eliminated oil tax credit pro- gramme. Alaska Public Media this week cited Caelus’ senior vice president, Pat Foley, as saying the company was still trying to secure nancing for the Smith Bay project.
According to state documents, Nuna has pre- viously been estimated to contain 75-100 million barrels of oil. But ConocoPhillips has said it will spend the next few years carrying out its own appraisal of the field before deciding how to move forward with the project.
The company also has a number of other projects under development in Alaska, includ- ing Greater Mooses Tooth 2 and Willow. Greater Mooses Tooth 2 was approved by the US Bureau of Land Management (BLM) in late 2018. Cono- coPhillips has projected that the site could pro- duce up to 40,000 barrels per day of oil. Start-up is anticipated around 2021.
ConocoPhillips has even higher hopes for Willow, which it said could produce up to 100,000 bpd, equivalent to a h of the oil volumes currently owing through the Trans- Alaska Pipeline System (TAPS). e project
ConocoPhillips’ Greater Mooses Tooth 1 project in Alaska
Both Greater Mooses Tooth and Willow are located in the National Petroleum Reserve-Alaska.
would be welcome in Alaska, which has long been grappling with declining production and concerns that TAPS would have to be shut down if the volume of oil owing through it keeps fall- ing. e BLM began the environmental review process for Willow in mid-2018. First oil from the project, which is estimated to cost US$4-6 billion, is being targeted for the mid-2020s.
Both Greater Mooses Tooth and Willow are located in the National Petroleum Reserve- Alaska (NPR-A), and the push to develop the projects has encountered opposition from envi- ronmental groups concerned about impacts to the local ecosystem.
But the government of US President Don- ald Trump is supportive of the push to open up more NPR-A acreage to drilling, and has urged approvals to be expedited, which bodes well for ConocoPhillips in terms of the outcome of the Willow review.
Eagle Ford expansion
In separate news reported this week, it emerged that ConocoPhillips subsidiary Burlington Resources is gearing up for a major horizontal drilling campaign on three leases in the Eagle Ford shale in South Texas.
Burlington is seeking permission from the Railroad Commission of Texas, the state oil and gas regulator, to drill 13 wells in DeWitt and Karnes counties. e company is planning to drill 10 horizontal wells divided between its J Rossett and Mumme-Schendel-Maron lease in DeWitt County and three more on its Korth Vickers lease in neighbouring Karnes County.
e wells will target the Eagleville eld at a depth of 17,000 feet (5,182 metres). e Hou- ston Chronicle noted that so far this year, Cono- coPhillips has led for 80 drilling permits in the state, all of them for projects in South Texas.
e Eagle Ford remains the second largest tight oil production region in the US, but the latest projections from the country’s Energy Information Administration (EIA) see output from the play falling by 3,000 bpd in July, to 1.390 million bpd, from a forecast 1.393 million bpd this month.™
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