Petroleum News 050513
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page Q&A: Rep. Lindsey Holmes 4 says ACES fix was needed Vol. 18, No. 18 • www.PetroleumNews.com A weekly oil & gas newspaper based in Anchorage, Alaska Week of May 5, 2013 • $2.50 EXPLORATION & PRODUCTION Unocal sale of TAPS stake pending Nuna resources up JUDY PATRICK JUDY Pioneer Natural Resources ups estimates; touts Nuiqsut/Torok frack jobs By ERIC LIDJI Of the four horizontal development wells For Petroleum News Pioneer completed from Oooguruk Island his winter was the same as last winter for this past winter, the two brought online to TPioneer Natural Resources, but better. date have so far hit peak production rates After the Texas-based independent reported of 3,500 and 3,000 gross barrels of oil per good results last year from a fracture-stimulation day, respectively. program at its Oooguruk unit and an exploration Unocal Pipeline Co. continues to work toward sale of its small owner- campaign in the associated Torok formation, the ship stake in the trans-Alaska pipeline system. See story page 12. company expanded both efforts this year, with al well into the Torok has led Pioneer to increase even better results. its estimate for the Nuna development to between Of the four horizontal development wells 75 million and 100 million barrels of oil, up from Imperial/Exxon moving on LNG Pioneer completed from Oooguruk Island this past a previous estimate of some 50 million barrels. answer BC Prince Rupert invite winter, the two brought online to date have so far The successful wells have yet to impact overall hit peak production rates of 3,500 and 3,000 gross A 50-50 joint venture of ExxonMobil and its 69.6 percent barrels of oil per day, respectively. And an apprais- see NUNA RESOURCES page 19 owned Imperial Oil is examining potential sites and assembling various technical and commercial elements of a grassroots LNG EXPLORATION & PRODUCTION project in British Columbia, said Richard Kruger, Imperial’s recently appointed chief executive officer. He told reporters the evaluation includes “the right fiscal Looking at the options framework, cost of resource development, market dimensions, project economics, construction costs and regulatory issues.” Kruger said a decision to proceed would depend on the Southcentral utilities review evolving Cook Inlet gas supply situation results of that work, setting aside any discussion of a timeline. By ALAN BAILEY He also said it is too early to say how Canada’s Pacific Coast But during cold winter weather the Petroleum News see BC LNG page 17 maximum throughput of the lines through ith some Southcentral Alaska utility execu- the northern Kenai Peninsula is Munis challenge FNG to service Wtives presumably sighing with relief as the insufficient to meet all of Anchorage’s gas weather warms after a winter that saw no shortfalls in demand. lower-density areas of borough Cook Inlet utility gas supplies, utility staff are busy planning for the next winter, as well as evaluating The game is on to expand natural gas supplies in the Interior. explaining some of the gas supply challenges. how to keep adequate gas flowing in years to come. The Interior Alaska Natural Gas Utility is asking state regu- In terms of progress, there was mention of discus- The utilities have been facing something of a fuel lators for a service area covering sections of the Fairbanks sions between the utilities and Hilcorp Alaska, the supply crisis as gas production from aging Cook Inlet North Star Borough not currently served by the local distribu- company that has now completed its takeover of gas fields declines. tion company Fairbanks Natural Gas LLC. The request comes Cook Inlet oil and gas fields previously owned by During a meeting of the Anchorage Mayor’s shortly after Fairbanks Natural Gas applied to expand its serv- Chevron and Marathon Oil Co. Hilcorp has Energy Task Force on May 1, the utilities explained ice area to include those same sections. embarked on an aggressive program of field devel- Additionally, state regulators have given Spectrum Alaska some of their plans, hinting at some progress in deal- LLC the go-ahead to build a small pipeline to support a North ing with short-term gas supply needs while also see GAS OPTIONS page 14 Slope liquefaction system the company is proposing. Although a publicly owned utility is exempt from certain PIPELINES & DOWNSTREAM state utility regulations, the IANGU is electing to go through the see INTERIOR GAS page 17 BC investment chill? NordAq says if testing goes OK Dix, odds-on favorite to become BC’s next premier, wants to scrap host of projects production could begin this fall By GARY PARK per day on its Trans Mountain pipeline NordAq Energy has submitted an amended plan of opera- For Petroleum News from the Alberta oil sands to the Pacific tions for its Tiger Eye Central project, and has told the Alaska Coast, Dix put that project in the same Division of Oil and Gas that pending the successful outcome fter three months of pondering, category as Enbridge’s planned 525,000 of its exploration program, it may install production facili- AAdrian Dix has put Kinder Morgan bpd Northern Gateway system (which ties. Natural gas production could begin in October from the in the same category as Enbridge — also includes a twin pipeline to import prospect, southwest of the Trading Bay Production facility on unwelcome visitors to British Columbia 193,000 bpd of condensate). the west side of Cook Inlet, NordAq said in its project sched- if, as seems almost certain, he becomes “We do not expect Vancouver to ule. premier of the province on May 14. become a major oil export port, as NordAq, an Anchorage-based independent, has four Cook In the process of reversing a previous- ADRIAN DIX appears to be suggested in what Kinder Inlet basin prospects and a block of tracts in Smith Bay off ly held position, the leader of the left- Morgan is suggesting to the province,” Alaska’s North Slope. wing New Democratic Party unveiled even more Dix said. “I don’t see that transformation as being The company made a gas discovery in 2011 at Shadura, a of his ambivalence to resource development and the right approach for our economy or out port.” prospect on Cook Inlet Region Inc. subsurface in the Kenai raised fears of a flight of capital from British In January, Dix said he would not be rushed into Columbia. a decision on Trans Mountain, insisting he would see TIGER EYE page 19 In declaring his opposition to Kinder Morgan’s not prejudge the pipeline until Kinder Morgan had plans to almost triple capacity to 890,000 barrels see INVESTMENT CHILL page 18 2 PETROLEUM NEWS • WEEK OF MAY 5, 2013 contents Petroleum News North America’s source for oil and gas news ON THE COVER 11 Cook Inlet Energy to drill gas well Nuna resources up Company to spud Olsen Creek No. 1 by mid-June; well workovers continue on Osprey platform Pioneer Natural Resources ups estimates; touts Nuiqsut/Torok frack jobs with commercial gas sales coming soon Looking at the options 13 Parker reports good start for Alaska rigs Southcentral utilities review an ever FINANCE & ECONOMY evolving Cook Inlet gas supply situation 7 Imperial Oil unsure about growth plan BC investment chill? 12 Shell puts Pickard at head of Arctic program Dix, odds-on favorite to become BC’s next premier, wants to scrap host of projects GOVERNMENT SIDEBAR, Page 18: Shipbroker hails Enbridge plans 4 Lindsey Holmes on votes for SB 21, HB 4 Imperial/Exxon moving on LNG 5 Treadwell certifies oil tax referendum answer BC Prince Rupert invite 11 Hayes to leave Department of Interior Munis challenge FNG to service LAND & LEASING lower-density areas of borough 7 Potential Alaska state and federal oil and gas lease sales NordAq says if testing goes OK production could begin this fall NATURAL GAS ALTERNATIVE ENERGY 13 Budget would fund Funny River pipeline 6 Chugach reports Fire Island wind success PIPELINES & DOWNSTREAM Alberta studies northern alternative Output from CIRI’s new wind farm near Anchorage 10 has exceeded expectations, caused no problems on Railbelt electricity grid EXPLORATION & PRODUCTION 5 MGM Energy takes positive view of Canol shale play 6 Environmentalists appeal for Chukchi plan 8 ANS production down 3.2% from March 12 Unocal’s pending TAPS sale hits snag Biggest drop at Prudhoe Bay, where injection Company says dispute with other owners in trans-Alaska compressors were down at central gas facility oil pipeline system has gone to arbitration; for 48 hours; Cook Inlet up slightly Unocal is smallest stakeholder 10 Polar releases Hemi Springs reserves 13 Regulators scrutinize Alyeska Pipeline Study estimates 558.2 million barrels of recoverable Operator of trans-Alaska oil line gains passing marks oil reserves from Ivishak, Kuparuk and Schrader on control room operation, efforts to safeguard Bluff/West Sak formations piping at Valdez terminal SET YOUR PLAN IN MOTION Our skilled crew gives projects the momentum they need to reach new horizons. A MEMBER OF THE UKPEAGVIK IÑUPIAT CORPORATION FAMILY OF COMPANIES PETROLEUM NEWS • WEEK OF MAY 5, 2013 3 Alaska - Mackenzie Rig Report Rig Owner/Rig Type Rig No. Rig Location/Activity Operator or Status The Alaska - Mackenzie Rig Report as of May 1, 2013. Alaska Rig Status Active drilling companies only listed. North Slope - Onshore TD = rigs equipped with top drive units WO = workover operations Doyon Drilling CT = coiled tubing operation SCR = electric rig Dreco 1250 UE 14 (SCR/TD) Prudhoe Bay X-10, workover BP Dreco 1000 UE 16 (SCR/TD) Milne Point MPF-57a, workover BP This rig report was prepared by Marti Reeve Dreco D2000 UEBD 19 (SCR/TD) Alpine CD3-320 ConocoPhillips AC Mobile 25 Prudhoe Bay U-16 BP OIME 2000 141 (SCR/TD) Kuparuk 3C-9 ConocoPhillips Kuukpik 5 Rigged up on Umiat Disp#1 Linc Energy Oprations Inc.