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page Alaska gas pipelines compete in 9 Calgary IOGCC presentations Vol. 13, No. 19 • www.PetroleumNews.com A weekly oil & gas newspaper based in Anchorage, Alaska Week of May 11, 2008 • $1.50 ● EXPLORATION & PRODUCTION Future uncertain ANATOLY ZOLOTUKHIN ANATOLY Anadarko finds ‘no commercial hydrocarbons’ at Jacob’s Ladder well By ERIC LIDJI now plan to use the rest of spring to Petroleum News decide the future of Jacob’s Ladder. “We’re having meetings trying to fter reviewing logs and finding decide what we’re doing next year,” “no commercial hydrocarbons,” said company spokesman Mark Hanley. FORREST CRANE A Anadarko Petroleum plugged its The photo of the Orlan platform (above) in the May 4 issue of Jacob’s Ladder well this winter, Unique geography piqued interest Petroleum News used to be called the Glomar Beaufort Sea I CIDS. according to a first quarter operations The interest in Jacob’s Ladder stems report released on May 6. from the Wahoo formation of the Embarrassing but true, the Orlan The oil prospect sits 10 miles south- Lisburne Group, a prospect believed to Anadarko suspended platform used to be called the east of Prudhoe Bay on Alaska’s eastern hold between 20 million and 660 mil- the Chandler No. 1 North Slope and for years geologists well to the south of Glomar Beaufort Sea I CIDS lion barrels of oil equivalent. Gubik No, 3, and left have considered the unique structure of While knowledge of the Lisburne Nabors rig 105 at the Slap-dab on page 1 of last week’s Petroleum News there was Jacob’s Ladder to be a sign of potential- field dates back to the discovery of ice pad. Spokesman ly large reserves. Mark Hanley said the a photo of the Orlan production platform being used offshore Prudhoe Bay, the geology at Jacob’s expectation is to Sakhalin Island. Although the Russian professor who was the But with the disappointing news, return to next year subject of three Arctic articles in that issue (and two in this issue) Anadarko and its partners of the project to finish the deep see JACOB’S LADDER page 21 gas well. did NOT say the Orlan platform was of Russian or Norwegian make, one might have assumed that because “Orlan” is a Russian ● NATURAL GAS word that means “eagle.” In fact, the Orlan used to be called the Glomar Beaufort Sea I CIDS. Before it was purchased by ExxonMobil and towed to Sakhalin by Crowley to be converted into a production platform, Canada to fast-track Alaska it was used offshore Alaska’s North Slope for exploration drilling (but mostly it sat idle.) Learned from Mackenzie gas line mistakes, will speed Alaska line passage To add salt to the wound, it was Don Ingraham from Offshore By GARY PARK Divers, not someone at Petroleum News, who recognized the A major projects office established For Petroleum News Orlan as the CIDS. in 2007 by Prime Minister Stephen Offshore Divers has been involved in numerous diving proj- he Canadian government is promis- Harper’s government will make a ects in Alaska during the last 28 years, everything from the instal- ing not to repeat the plodding lation of the Steelhead and Osprey platforms in Cook Inlet, to the “big difference” once Alaska awards T process that has been a drag on the a project license to set the ball CIDS, SDC and Kulluk units on the North Slope. Mackenzie Gas Project if it is asked Thank you, Don. to regulate an Alaska gas pipeline across rolling on the massive undertaking, —PETROLEUM NEWS Canadian territory. a senior federal official said. A senior federal official told a confer- Prime Minister said Sue Kirby, an assistant deputy minis- Imperial ‘excited’ about Mac ence of U.S. and Canadian energy offi- Stephen Harper cials in Calgary May 5 that Ottawa is ter with Natural Resources Canada. A change at the helm of Imperial Oil hasn’t changed the confident it can match U.S. timelines if an applica- Delays in handling the Mackenzie gas pipeline company’s view of the Mackenzie Gas Project. tion is submitted. file have been identified by the consortium partners If anything, newly installed Chief Executive Officer Bruce At the federal level, Canada is making prepara- as a major factor putting the project at risk. March sounds more enthusiastic than his predecessor Tim tions for “an effective, efficient screening process,” Hearn about plans to develop Canada’s Arctic natural gas see FAST-TRACK page 19 resources, despite the pile of unresolved issues facing the C$16.2 billion project. ● EXPLORATION & PRODUCTION Taking the stage for the first time at Imperial’s annual meeting May 1, March said his company is “excited” about the MGP, regardless of assumptions that the cost estimates Learning from Norway will get hiked again when all of the agreements are in place. The MGP has also been hit with a delay in the startup date Zolotukhin: Three decades of technical innovation in Arctic oil, gas projects of three years to 2014, a slow-moving regulatory process, stalled decision making by the Canadian government on fiscal By ALAN BAILEY see IMPERIAL page 21 Petroleum News n three decades Norway’s offshore oil and gas industry has mushroomed from a zero base to the BREAKING NEWS I forefront of technical achievement. And the coun- try’s example of learning through practical experi- 3 Talisman answers imminent: Revealing new strategy ence and using cutting edge technology can point the way on how to move forward in exploring new fron- soon; no clues on Alaska, but strongly points to unconventional shift tiers on the Arctic continental shelf, Professor Anatoly Zolotukhin, deputy rector on international affairs at 8 State denies Corsair unit expansion: Two of Pacific Gubkin Russian State University of Oil and Gas, told Energy’s first 3 wells were planned for leases state to offer in 2009 sale a meeting in the University of Alaska Anchorage Institute of Social and Economic Research on April 29. 14 Prudhoe discovery debate: Finding Alaska’s largest oil Following the initial discovery in 1969 of the field involved 15 months of drilling milestones; discovery date contested see NORWAY page 22 2 PETROLEUM NEWS • WEEK OF MAY 11, 2008 contents Petroleum News A weekly oil & gas newspaper based in Anchorage, Alaska ON THE COVER GOVERNMENT Future uncertain 17 Sentencings for former executives delayed Anadarko finds ‘no commercial HISTORY hydrocarbons’ at Jacob’s Ladder well 14 Prudhoe discovery debate still rages Canada to fast-track Alaska Finding Alaska’s largest oil field involved two exploration Learned from Mac line mistakes, will speed wells, drilling milestones spanning 15 months; Alaska gas line passage, match U.S. timelines actual discovery date contested Learning from Norway LAND & LEASING Zolotukhin: Three decades of technical innovation 3 British Columbia: Come one, come all point to future of Arctic development 8 State denies Corsair unit expansion Embarrassing but true, Orlan platform used 19 Potential Alaska state and federal oil and gas lease sales to be called the Glomar Beaufort Sea I CIDS NATURAL GAS Imperial ‘excited’ about Mac 5 Issues: Jobs, steel, taxes, TransCanada EXPLORATION & PRODUCTION 5 Tanana Chiefs Conference first of contracts 4 Lawsuit filed to block Arctic seismic 9 Alaska gas lines compete in Calgary 7 One the oil sands can’t ‘duck’ 11 Enbridge wants a piece of the pipeline Dead birds in Syncrude Canada tailings pond stirs 16 Natural gas price heralds Arctic boon international condemnation, industry contrition 17 ANGDA contracting for natural gas supply coordinator 10 North Slope production down 3% from March 21 Anadarko plans return for foothills gas 13 Anadarko plugs and abandons Altamura OUR ARCTIC NEIGHBORS The spring project in NPR-A will close the books 12 Gazprom invests big bucks in gas line on the first Alaska exploration well drilled 12 International research crucial for Russia by the busy Houston independent 12 Study reports on LNG carrier designs for the Arctic 18 Study: Only 1% of Bakken recoverable 12 Snøhvit to use new CO2 capture technology 21 Pacific Energy to drill Escopeta’s onshore gas prospect 12 Russia regrets leasing out ship, drill rig FINANCE & ECONOMY PIPELINES & DOWNSTREAM 3 Talisman answers imminent 19 BP gets to work on refinery expansion, will be top Revealing new strategy soon; no clues on Alaska, processor of heavy Canadian crude oil but strongly points to unconventional shift SAFETY & ENVIRONMENT 6 Gasoline prices jump to record, oil pauses 18 BLM pushed to consider climate change concerns 16 Oil company earnings chart PETROLEUM NEWS • WEEK OF MAY 11, 2008 3 ● FINANCE & ECONOMY Talisman answers imminent Revealing new strategy soon; no clues on Alaska, but strongly points to unconventional shift By GARY PARK For Petroleum News British Columbia: Come one, come all alisman Energy may answer the press- The big and the little are joining British Columbia’s latest resource rush into the ing question about its subsidiary province’s northeastern shale gas region. T FEX’s future in Alaska in the third Imperial Oil, Canada’s largest all-purpose oil and gas company, disclosed in late week of May when it completes the April that it, in a joint partnership with sister company ExxonMobil Canada, has biggest shake-up in its history. rounded up 115,000 contiguous acres of license holdings in the Horn River basin, Under new Chief Executive Officer about 40 miles northeast of Fort Nelson. John Manzoni, who ended the 16-year reign In an effort to rebuild depleting gas reserves, that saw its first-quarter gas produc- at the top by Jim Buckee last September, the tion slide to 325 million cubic feet per day from 525 million cubic feet per day a year once globally minded independent seems earlier following the premature end of one Alberta play, Imperial said drilling rigs are headed for a more narrowly focused role.