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NorthAmOil COMMENTARY NorthAmOil

The Nanushuk
formation will be
targeted by both
ConocoPhillips’ Willow
project and by Shell at
West Harrison Bay.

ill-fated Chukchi Sea exploration programme by a partnership of Repsol and Armstrong
over 2012-15. The campaign was affected by Energy in the Pikka Unit. The shallow, con-
legal and regulatory hurdles, as well as severe ventional Nanushuk formation also forms the
ice conditions delaying drilling. In addition, basis of ConocoPhillips’ Willow oil prospect to
the Kulluk rig ran aground following a storm the south of Harrison Bay. The Alaska Journal
at the end of 2012, and subsequently had to be of Commerce reported last week that many in
scrapped, having sustained irreparable damage. the state’s oil industry believe the formation to be
The prize was potentially significant – the US prolific across much of the western North Slope.
Geological Survey (USGS) has estimated that Elsewhere on the North Slope other players
US Arctic waters hold roughly 26bn barrels of are also moving forward with their plans. On
conventionally recoverable oil. But Shell’s efforts September 4, Great Bear Petroleum Ventures
to drill the Burger prospect in the Chukchi Sea and Borealis Alaska submitted an application to
yielded disappointing results. In September form the Talitha Unit south of Prudhoe Bay. The
2015, the company said its Burger J well did not partners are aiming to drill two vertical wells,
encounter oil and gas “in sufficient quantities to Talitha A and B, over the next two exploration
warrant further exploration”. seasons.
This came during the last industry downturn, On September 23, it was reported that 88
with oil prices still on the decline, and gave Shell Energy had “tuned up” its Peregrine oil project,
an excuse to withdraw from the Arctic. In 2016, near the Willow field, and was seeking a farm-in
the super-major relinquished nearly all of its partner for the development. Hilcorp closed
Chukchi Sea leases. As for the Willow project itself, ConocoPhil-
Shell was not the only one to abandon explo- lips obtained a federal final environmental its acquisition of
ration leases in the region. ConocoPhillips, Total, impact statement (FEIS) for its plans for the field, BP’s acreage in
Eni and Equinor – then known as Statoil – are which is located within the NPR-A, in August.
also among the companies to have relinquished And in a different part of Alaska, privately the state earlier
their offshore Arctic leases in recent years. owned Hilcorp is requesting to form the Seaview
Unit encompassing the town of Anchor Point this year.
What next? on the southern Kenai Peninsula. The company
ConocoPhillips remains one of Alaska’s leading made a gas discovery in the Tyonek formation
onshore producers. But the downturns over the with the Seaview 8 well in 2018, and hopes to
past few years, along with ongoing price volatil- drill another Seaview well later this autumn.
ity, appear to have put offshore exploration in the Illustrating the ongoing appeal of oil and gas
region on ice for now, at least in more challeng- assets in Alaska, Hilcorp closed its acquisition
ing, frontier areas. of BP’s acreage in the state earlier this year. The
Near-shore developments, meanwhile, transaction turned Hilcorp into Alaska’s sec-
appear far more likely to advance. Some, includ- ond-largest oil producer.
ing West Harrison Bay, would target formations BP continues to work with Hilcorp and state
that extend from the onshore, allowing greater regulators to close the second part of the deal,
confidence over the offshore potential. In West which includes the super-major’s interest in the
Harrison Bay’s case, the target would be the 800-mile (1,287-km) Trans-Alaska Pipeline Sys-
Nanushuk formation, which was first identified tem (TAPS).™

P10 www. NEWSBASE .com Week 38 24•September•2020