Author: McKayla Crump

Alaskans feel the hurt

“The decisions that are going to be made from now to the end of the session are important to those people who have jobs and very important to young Alaskans who will be seeking good-paying jobs and residents who receive financial assistance from the State. We have had layoffs in excess of 300 and experienced pay cuts from 10–20 percent all the way to the top.”

-Jim Udelhoven, Chief Executive Officer, Udelhoven Oilfield System Services, Inc.

 

“Despite the 70% percent drop in oil prices from 2014 to 2016, the annual decline curve in North Slope oil production is actually leveling off – from 6.6 percent to 1 percent in the same time period. This boost in North Slope oil production is no accident. Rather, it is a direct result of $5 billion of new investment by the oil and gas industry that was prompted by the passage of SB 21. Since 2014, Arctic Slope Regional Corporation (ASRC) has invested more than $200 million to expand our infrastructure and increase our capabilities to support responsible oil and gas development on the North Slope.  ASRC continues to actively evaluate investment opportunities within the state of Alaska.  However, the ongoing dialogue regarding an increase in North Slope production taxes is concerning and could lead us to allocate our investment capital to opportunities outside of Alaska. Accordingly, we encourage the governor and the legislature to take a long-term view to solving the state’s fiscal challenges and continue to make Alaska an attractive place to invest.”

– Butch Lincoln, Executive Vice President and Chief Operating Officer, ASRC

 

“NANA has already lost over 500 good paying oil related industry jobs this past year. We are very concerned that the oil industry will continued its decline in Alaska if we put additional costs and taxes on an already stressed industry. Further industry decline will result in more lost Alaskan jobs and a further deterioration of our state wide economy.”

– Helvi Sandvik, President, NANA Development Corp.

 

“I am not optimistic about further investments.  SB 21 is working & frankly we should be doing more to spur investment from the resource industry instead of taxing them more.  When you take away money from the private sector to fund the public, it hurts those of us that employ your constituents and all of our local vendors.  Like clockwork, every other year we have to keep lobbying the legislature for the right to work; please keep Alaska competitive.”

– Genevieve Schok Jr., Flowline Alaska, Fairbanks

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First oil from Cosmopolitan

Last week a Carlile truck pulled into the Tesoro Refinery in Kenai to deliver the first barrels of oil from BlueCrest Energy’s Cosmopolitan Field in Anchor Point.

BlueCrest expects to deliver two tankers per day to the refinery.

“The continued exploration and development of both oil and natural gas in the Cook Inlet basin is important for the long-term viability of our local refinery as well as the economic well-being of the Kenai Peninsula,” said Tesoro Refinery Manager Cameron Hunt. “This delivery marks another milestone in the recent renaissance of the Cook Inlet basin, which hopefully will continue.”

Carlile Vice President of Oil and Gas Tom Hendrix said BlueCrest’s initial success could be jeopardized if Cook Inlet tax credits are changed to chase away smaller companies trying to gain a foothold in the Inlet.

“Alaska’s economic strength and growth is directly tied to a strong, vital natural resource industry, which provides jobs for a diverse workforce and a range of important business development opportunities throughout the state for companies such as Carlile,” says Hendrix.

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Two projects begin production while a third expands

Last week ended with good news from the opposite corners of the North Slope.

On Friday came the word that ExxonMobil has started production at Point Thomson, the first company-operated facility on Alaska’s North Slope and an essential part of any natural gas project.

At full rate production, the facility is designed to produce up to 10,000 barrels per day of natural gas condensate and 200 million cubic feet of recycled gas. Point Thomson is located on state acreage along the Beaufort Sea, 60 miles east of Prudhoe Bay and 60 miles west of the village of Kaktovik.

“The successful startup of Point Thomson demonstrates ExxonMobil’s project management expertise and highlights its ability to execute complex projects safely and responsibly in challenging, remote environments such as the North Slope in Alaska,” said Neil W. Duffin, president of ExxonMobil Development Company.

ExxonMobil and the working-interest owners have invested approximately $4 billion in the Point Thomson development. About 100 Alaska companies contributed to the success of the project, and thousands of people worked onsite and around the state during peak construction activity.

On Thursday, ConocoPhillips revealed that it has approved a plan to spend about $190 million to add another 18 wells and associated infrastructure to fully build out its new CD-5 oil development.

ConocoPhillips has completed 10 of the 15 wells laid out in CD-5’s initial development plan. Production from the site began in October of last year.

The more than $1 billion overall project was designed to accommodate 33 wells, meaning the latest approved drilling program will add another 18 wells.

CD-5 is the company’s latest project in the Alpine field — on the western fringe of the established North Slope. ConocoPhillips expects CD-5 will hit its production target of averaging 16,000 barrels per day this year.

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