The first day of the RDC conference continued with discussions from the heads of ConocoPhillips Alaska and BP Alaska about their investment in the North Slope. Both companies have had a busy year and are continuing the trend of investment in Alaska.
Trond-Erik Johansen of ConocoPhillips kicked things off, assuring the crowd that there are many good things happening in Alaska. There have been some challenging debates over the past few years, but ConocoPhillips will continue to move forward and will stay the course of investing on the North Slope. ConocoPhillips is very focused on converting resources that are in the ground into real oil in the Trans-Alaska Pipeline System (TAPS). The 2014 capital budget was up 50 percent from 2013 and is double the 2008-2012 average. The CD5 project, that was announced prior to SB21, is on schedule and on budget ($1 billion). The first oil from the project is estimated to flow at the end of 2015 with peak production at an estimated 16,000 BOPD in 2016.
The Alaska projects that were announced since SB21 hit the books are also still on track. Two new rigs were added at Kuparuk and are producing an additional 8,000 BOPD per rig. Each rig also added an additional 100 direct jobs for the state. Kuparuk production has flattened with the additional rigs. There are new projects in the Western North Slope/Alpine area that will help slow the production decline. A new Kuparuk drill site 2S (Shark Tooth) has been approved for construction. Peak workforce during construction will be 250+ jobs in 2015. The project has a budget of $500 million. An additional 8,000 BOPD is predicted to start in late 2015. Greater Moose’s Tooth is in the permitting stage. If permits are received by February 2015, the project will add 30,000 BOPD in 2017. Johansen wrapped up his presentation with a note about the Cook Inlet Assets and Natural Gas Sales. It is the only LNG plant to export from the US. Exports only occur in the summer because the gas is needed in Alaska during the cold, winter months.
Janet Weiss of BP Alaska shared Johansen’s optimism for the future of Alaska’s North Slope. As of November 18, BP and Hilcorp closed the deal that transferred a portion of BP’s North Slope assets to Hilcorp. The transfer allows BP to focus on the major fields and to remain competitive at Prudhoe Bay. BP will add a rig in 2015 and another in 2016, which will increase activity by 40 percent. They will also add an additional 25 miles of pipeline to bring more oil to TAPS in 2017. BP will also expand their current pads at Prudhoe and add a new drilling pad in the near future.
BP continues to invest not only in production, but also in Alaskans and education. As a company, BP has invested $28 billion in education and workforce programs in Alaska. They will continue their focus on growing the resource space that includes the people of Alaska and not just the capital.
Both ConocoPhillips and BP were cautiously optimistic about being able to slow the production decline on the North Slope. They are both working to move projects forward. Production is still far from the levels of the past, but both leaders felt that Alaska was moving in the right direction and that there are still plenty of resources to develop.
Governor Parnell stopped by the conference for a brief thank you to the resource industry. He highlighted the growth that has been seen during his time in office. Southcentral Alaska has new economic possibilities, especially along the Kenai Peninsula. The Governor thanked everyone in attendance for their support and their work to create more economic opportunities and growth. He concluded by saying how thankful he was for the opportunity to serve Alaska and its citizens and looked forward to getting back to work as a regular citizen.
More RDC highlights will be posted throughout the week.
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