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Sunday 05.02.2012

Oil companies take cautious route in Alaska

Some announced plans to cut back on spending and drilling on the North Slope, though they also said they will continue to pursue a handful of big, new projects.

Oil and gas companies gave a mixed forecast Nov. 19 on their plans for work in Alaska next year, reports the Anchorage Daily News.



Some announced plans to cut back on spending and drilling on the North Slope.

Conoco said it won't be drilling an exploration well for the first time in 45 years -- though they also said they will continue to pursue a handful of big, new projects.

BP said it will cut its Alaska spending by 15 per cent next year, to $850 million.

But it still plans to work on projects such as the proposed North Slope gas pipeline to supply North American markets and its new $1.5 billion Liberty oil field in the Beaufort Sea.

The updates were part of the two-day Resource Development Council annual conference, which began Wednesday and ends Nov. 19.

For the first time since 1965, ConocoPhillips will not drill a new exploration well in Alaska next year.

Instead, the company plans to focus its spending on developing its Chukchi Sea leases and making improvements at the two big oil fields it runs, Kuparuk and Alpine.

The company has said repeatedly that it believes Alaska's recent revisions to oil taxes will harm industry investment and cause job losses.

BP said it has three big challenges in Alaska right now: oil production continues to decline, costs are rising and taxes have increased.

And the North Slope's vast amounts of heavy oil is not economic to develop right now given current oil prices and the state's tax structure, the company said.

Exxon Mobil said it is "100 percent" behind developing new wells at Point Thomson, a large oil and gas unit 60 miles east of Prudhoe Bay.

Ever since the state decided a couple of years ago to pull Exxon's leases at Point Thomson -- it cited decades without any drilling -- the company and Alaska have been battling for control of the potentially lucrative field.

The state has returned a couple of leases, but the remainder are in court.