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page Jim Weeks, ConocoPhillips cut 11 deal to drill Winstar lease Vol. 8, No. 16 • Anchorage, Alaska www.PetroleumNews.com Week of April 20, 2003 • $1 ● LAND & LEASING Earnings in the trough BLM takes second look JUDY PATRICK JUDY Feds to loosen restrictions, offer more acreage, in northeast NPR-A By KRISTEN NELSON being developed in the ongoing NPR-A northwest Petroleum News Editor-in-Chief plan.” Both of those objectives are now under considera- enri Bisson, Bureau of Land Management tion, the agency said in an April 15 statement: reeval- Alaska state director, said April 15 that BLM uating the current plan to include exploration in areas H plans to amend the 1998 “that could provide access to land use plan for 4.6 mil- significant new oil discoveries” lion acres in the northeast plan- and considering “changing the ning area of the National current prescriptive stipulations Petroleum Reserve-Alaska. into a mixture of prescriptive Bisson told the Resource and performance-based stipula- Development Council in tions similar to those being November that the agency was developed” for the NPR-A “strongly considering amend- northwest planning area. ing the NPR-A northeast plan.” If BLM proceeded with HENRI BISSON, BLM PETER DITTON, BLM Teshekpuk Lake area amendments, he said then: “We would propose to Under the 1998 land use plan, the area around revisit several issues, including the areas that are cur- Teshekpuk Lake was not offered for leasing and a rently available for leasing in the NPR-A” and chang- boundary around that non-leased area was offered for ing “the exploration and development stipulations and mitigation measures to be identical to the ones that are see NPR-A page A13 ● GOVERNMENT Fence-mending trip to D.C. eases A huge chasm has opened between U.S.-based oilfield service compa- nies and the exploration and production spending on which they depend, according to projected 2003 first quarter earnings for both groups. But despite last quarter’s weak drilling environment outside tensions between U.S., Canada onshore United States, Salomon Smith Barney expects full-year per- share earnings for service companies to rise about 14 percent on the No lasting damage to energy flow, but Canada urged to help rebuild Iraq average. Pictured above, Nabors Alaska Drilling rig on the North Slope. Nabors Industries is one of the few service companies that should By GARY PARK cooperate in efforts to rebuild Iraq and to curb show improvements over the last quarter. See full story on page A9. Petroleum News Calgary Correspondent some of the gratuitous insults directed at President George W. Bush by senior members of Prime high-powered delegation of Canada’s most Minister Jean Chretien’s government. Mackenzie Valley gas pipeline influential business leaders, including a Following a two-day summit April 7 and 8 that spurs drilling, staking along route A heavy sprinkling of oilpatch executives, has included 100 Canadian chief executive officers, scurried back home from a fence-mending Deputy Prime Minister John Manley, U.S. One of the liveliest winter drilling seasons in years is wind- trip to Washington, D.C., hoping they won’t suffer Secretary of Homeland Security Tom Ridge and ing down in the Northwest Territories, although results remain too much from U.S.-Canada tensions over Iraq. White House Chief of Staff Andrew Card, there scant for competitive reasons. But their optimism is tempered by warnings was a general view that the immediate crisis is Spurred by the need to make commercial natural gas discov- from political and corporate leaders on both sides eries in anticipation of an 800-mile Mackenzie Valley pipeline, of the border that Canada would be well-advised to see MEND page A21 operators were especially active in the lower NWT. With hopes high that the project will start deliveries by 2008, companies have been actively staking out interests along the pipeline route. ● LAND & LEASING On the Mackenzie Delta, there is no news yet from three wells: the Nuna I-30 exploration well being drilled by Petro- Canada and Devon Canada that is expected to reach a depth of MMS promises faster lease processing 11,800 feet; a 6,500-foot well by Devon and Shell Canada, and Langley K-30, a 4,600-foot exploration well that is being drilled Direct electronic access to seismic should cut lease issuance by a month by Chevron Canada and BP Canada Energy on Burlington PETROLEUM NEWS HOUSTON STAFF see MACKENZIE page A23 MMS is currently reviewing last month’s he U.S. Minerals Management Service, in a Central Gulf Lease Sale 185. … MMS move that should greatly speed up the T issuance of oil and gas leases in the Gulf of likely will take a close look at two blocks INSIDE Mexico, has acquired direct electronic access on the gas-prone continental shelf that to seismic data it uses to help determine whether received an unheard of 18 bids, the most Marathon bounces back A14 it’s getting fair market value for acreage sold at competitively bid blocks in the entire sale. lease sales. Mackenzie Valley breakthrough A3 Industry has long complained about the length “But it’s hard to imagine that the vast bulk of leas- of time — up to 90 days in some cases — that it es in this process would not get done faster.” Alberta makes soft price forecasts A7 takes for successful bidders to receive title to their The current process of acquiring seismic data leases. from vendors using digital linear tape and 8 mil- BP applies to expand Milne Point A11 For routine cases, the new electronic system limeter tape alone requires six to eight weeks. could reduce the waiting time by at least a month, More delay occurs when vendors write the data to AOGCC proposes rules for Prudhoe wells A10 said Chris Oynes, Gulf regional director for MMS. “The devil is in the details,” Oynes cautioned. see MMS page A23 A2 RIG REPORT PETROLEUM NEWS • WEEK OF APRIL 20, 2003 Alaska - Mackenzie Rig Report Rig Owner/Rig TypeRig No. Rig Location/Activity Operator or Status The Alaska - Mackenzie Rig Report as of April 14, 2003. Active drilling companies only listed. Alaska Rig Status TD = rigs equipped with top drive units WO = workover operations North Slope - Onshore CT = coiled tubing operation SCR = electric rig Doyon Drilling This rig report was prepared by Wadeen Hepworth Dreco 1250 UE 14 (SCR/TD) Milne Point, drilling MPS-01 BP Sky Top Brewster NE-12 15 (SCR/TD) Endicott, drilling 3-25B/L-27 BP Dreco 1000 UE 16 (SCR) Stacked, Deadhorse Available Dreco D2000 UEBD 19 (SCR/TD) Alpine, drilling CD2-51 ConocoPhillips OIME 2000 141 (SCR/TD) West Sak Multi-lateral, drilling 1C-178 ConocoPhillips Nabors Alaska Drilling Trans-ocean rig CDR-1 (CT) Stacked, Prudhoe Bay Available Dreco 1000 UE 2-ES (SCR) Prudhoe Bay, C-11A BP Mid-Continent U36A 3-S Stacked, Prudhoe Bay Available Oilwell 700 E 4-ES (SCR) Prudhoe Bay, 16-13 BP Dreco 1000 UE 7-ES (SCR/TD) Kuparuk, 3S-23 ConocoPhillips Dreco 1000 UE 9-ES (SCR/TD) Prudhoe Bay, Borealis Field W-207i BP Oilwell 2000 Hercules 14-E (SCR) Stacked, Prudhoe Bay Anadarko Oilwell 2000 Hercules 16-E (SCR/TD) Puviaq #1 ConocoPhillips Oilwell 2000 17-E (SCR/TD) Stacked, Point McIntyre Available Emsco Electro-hoist -2 18-E (SCR) Stacked, Deadhorse Available OIME 1000 19-E (SCR) Stacked, Deadhorse ConocoPhillips Emsco Electro-hoist Varco TDS3 22-E (SCR/TD) Stacked, Milne Point Available Emsco Electro-hoist Canrig 1050E 27-E (SCR/TD) Stacked, Deadhorse Pioneer Emsco Electro-hoist 28-E (SCR) Stacked, Deadhorse Available OIME 2000 245-E Stacked, Kuparuk ConocoPhillips Nordic Calista Services Superior 700 UE 1 (SCR/TD) Nikuk, 62A BP Superior 700 UE 2 (SCR) Prudhoe Bay, C-31 BP Ideco 900 3 (SCR/TD) Moving to stack site Available North Slope - Offshore Nabors Alaska Drilling Oilwell 2000 33-E (SCR/TD) Northstar Is., NS-23 BP Fairweather Dreco 147 SDC Rig cold stacked EnCana Cook Inlet Basin – Onshore Marathon Oil Co. (Inlet Drilling Alaska labor contractor) Taylor Glacier 1 Beaver Creek, well BC-6 Marathon Inlet Drilling Alaska/Cooper Construction Kremco 750 CC-1 Crew at Trading Bay, Kustatan #1 field Forest Oil Nabors Alaska Drilling Rigmasters 850 129 Stacked, Swanson River Available National 110 UE 160 (SCR) Stacked, Kenai Available Continental Emsco E3000 273 Hansen #1 ConocoPhillips Aurora Well Service Franks 300 Srs. Explorer III AWS 1 Stacked, Nikiski Available Evergreen Resources Wilson Super 38 96-19 Stacked, Wasilla Evergreen Engersol Rand 1 Stacked, Wasilla Evergreen Cook Inlet Basin – Offshore XTO Energy (Inlet Drilling Alaska labor contract) National 1320 A Idle Idle National 110 C (TD) Idle Idle Nabors Alaska Drilling IDECO 2100 E 429E (SCR) Osprey, Redoubt Shoal RU#6 Forest Oil Unocal (Nabors Alaska Drilling labor contractor) Information no longer available, due to layoffs and budget cuts. Cook Inlet Platform COURTESY OFFSHORE DIVERS Baker Hughes North America rotary rig counts* Mackenzie Rig Status April 11 April 4 Year Ago US 979 972 747 Mackenzie Delta-Onshore Canada 175 221 127 Akita Equtak Gulf 97 97 103 Dreco 1250 UE 63 (SCR/TD) Drilling, Nuna J-30, Spudded February 7, 2003 Petro-Canada Highest/Lowest Akita Equtak US/Highest 4530 December 1981 64 Testing, Langley K-30 Chevron Canada spud March 19, 2003 Resources US/Lowest 488 April 1999 Canada/Highest 558 January 2000 Central Mackenzie Valley Canada/Lowest 29 April 1992 Akita/SAHTU *Issued by Baker Hughes since 1944 Oilwell 500 51 Stacked, Norman Wells Available Nabors Drilling Oilwell 500 62 Stacked, Norman Wells Available Rig start-ups expected in next 6 months Wilson Drilling Ltd.