page AGDC responds to requests that 3 FERC stay, rehear AKLNG order

Vol. 25, No. 30 • www.PetroleumNews.com A weekly oil & gas newspaper based in Anchorage, Alaska Week of July 26, 2020 • $2.50

l EXPLORATION & PRODUCTION BLM rule relaxation rejected by federal district court on appeal The federal District Court for the Northern District of Talitha a go California has upheld appeals by environmental organiza- tions against the Bureau of Land Management rule, issued in 2018, rescinding much of the Waste Prevention Rule, issued Pantheon to drill 2020-21winter exploration well followed by Alkaid producer in 2016 by the Obama administration. The 2016 rule instigat- By KAY CASHMAN in the next year. The timing of Alkaid ed regulations strictly limiting the venting and flaring of Petroleum News drilling is subject to the outcome of cur- methane from oil and gas operations on federal lands. rent farm-out discussions. Methane is a particularly potent greenhouse gas. antheon Resources, owner of Great The new Alkaid well has the potential The 2018 BLM rule came as part of the Trump administra- Bear and its North Slope oil and gas to be completed as a producer via the tion’s efforts to roll back what it characterized as overburden- P assets, is planning to drill an exploration “installation of an Early Production Unit some regulations that unnecessarily impede industrial activity. well in its Talitha prospect this coming facility,” Pat Galvin, Pantheon’s chief Among other provisions, the 2016 rule prohibited the winter. Adding Pantheon’s well, Talitha commercial officer in Alaska, told venting of methane, except under a narrowly specified set of 1, to 88 Energy’s two wells will bring the Petroleum News in a July 22 email. see BLM RULING page 11 number of Alaska North Slope explo- PAT GALVIN The company is in the process of ration wells in the 2020-21 off-road sea- applying for two new units, one at son to three; or as many as seven if ConocoPhillips Talitha and one at Alkaid, he said. Carbon capture takes flight, resumes its delayed exploration program. Alkaid has the advantage of being located along forecast intake exceeded at facility The Talitha well will be followed by a develop- ment well at Pantheon’s Alkaid project sometime see PANTHEON WELL page 12 A trail-blazing venture in Alberta to remove carbon dioxide from the atmos- phere is setting a global standard after only l FINANCE & ECONOMY five years in operation and drawing praise from one-time sceptics such as Alberta Premier Jason Kenney. The Quest carbon capture and storage, Chevron strikes first! CCS, project at Shell Canada’s Scotford refining complex near Edmonton has $13B acquisition of Noble Energy largest US oil deal since COVID-19 crash already passed a milestone of sequestering JASON KENNEY 5 million metric tons — five times initial By STEVE SUTHERLIN While oil prices are recovering from the Petroleum News projections and the equivalent of removing 1.25 million cars from depths of April, prices have been the road. hevron’s July 20 announcement of a $13 bil- moderated by concerns over new see CARBON CAPTURE page 8 Clion deal to acquire Noble Energy is a sign outbreaks of COVID-19 in portions of the that Chevron sees better times ahead for oil and United States and elsewhere, thus asset Final two participants named to gas demand, and for energy prices. prices remain subdued. The transaction is the largest U.S. energy deal Railbelt Reliability Council seats since oil prices were decimated to historic lows in The implementation committee of the Railbelt Reliability April, due to the COVID-19 pandemic and its element of market recoveries in the highly cyclical Council has named the final two representatives, Chris Rose, deflating effect on worldwide demand for petrole- oil and gas industry. executive director of the Renewable Energy Alaska Project, and um — particularly in transportation fuels. Uncertainty in the market may have delivered Jerry Rust, former president and current special assistant to the The deal represents a substantial acceleration of Chevron with a bargain. While oil prices are recov- chairman at Northwest Power Pool. Both occupy unaffiliated the process of consolidation, where weaker players ering from the depths of April, prices have been seats. The RCC board has a representative from each of the six and their assets are acquired in down markets by Railbelt utilities and six independent members representing other those with stronger balance sheets, a time-worn see CHEVRON DEAL page 10 stakeholders. The Regulatory Commission of Alaska and the state’s Regulatory Affairs and Public Advocacy Section each l FINANCE & ECONOMY have a non-voting seat. The independent members include two representatives from see RRC SEATS page 8 Seizing opportunities Average ANS crude volumes for Alberta First Nations participating in abandoned well cleanup, sands development July edge back toward April levels By GARY PARK sands lease, the Fort McKay First Nation in north- Average daily North Slope production volumes posted by the eastern Alberta has decided the timing is now ripe Alaska Department of Revenue’s Tax Division continue to edge For Petroleum News to develop its land, confident there will be a con- up in July, from 450,343 barrels per day on July 1 to a high of 498,562 bpd on July 17. The average for the month so far, on July he growing pace of Indigenous equity stakes tinuing global appetite for crude and that market 20, the last day for which data was posted when this story was Tin energy projects is quickening in Western conditions will improve over the years. written, was 487,908 bpd. Canada, with one First Nation in Alberta gearing Fort McKay Chief Mel Grandjamb said the ANS volumes, which started the year at an average of 514,887 up to develop an oil sands project and another con- world-wide shift to renewable energy sources puts bpd in January, have been impacted by Alyeska Pipeline Service fident it can gain an ownership stake in the Trans pressure on his community to take advantage of its Co. prorations, April 24 through May 22, and more strongly by a Mountain pipeline expansion. lease while it can. 100,000 bpd cut in Alaska production announced by In addition, two Indigenous-owned service Alvaro Pinto, the nation’s newly appointed ConocoPhillips on April 30, set for June, with ramp down to companies have been named to lead a cleanup chief executive of oil sands development and sus- begin in late May. The company said June 30 that it expected to effort at abandoned oil and natural gas well sites in tainability, will develop the next phases of the begin restoring Alaska production in July. Alberta — one on Enoch Cree Nation land near Moose Lake oil sands project to enlarge Fort Edmonton and another working at “orphan well” see CRUDE VOLUMES page 12 McKay’s existing eight mines and three in-situ sites across Alberta. Meanwhile, after 20 years of sitting on an oil see WELL CLEANUP page 10 2 PETROLEUM NEWS • WEEK OF JULY 26, 2020

l PIPELINES & DOWNSTREAM Preservation plan set for Kenai LNG Plant Trans-Foreland will document changes at plant, working within constraints of critical energy/electric infrastructure information

By KRISTEN NELSON “The Plan is intended to address the AK SHPO’s concern LNG Plant “is subject to confidentiality directives issued by Petroleum News that the addition of new elements, or the removal of existing the FERC” under rules governing procedures “for submit- elements will adversely effect the eligibility of the Kenai ting, designating, handling, sharing, and disseminating CEII rans-Foreland, owner of the dock and liquefaction facil- LNG Plant for listing on the National Register of Historic submitted to or generated by the FERC.” Tity at Nikiski — the Kenai LNG Plant — has proposed Places (NRHP) while also complying with the confidentiality The optimized cascade technology and machinery at the adding a new boil-off-gas booster compressor unit and relat- directives issued by FERC as part of Critical Energy/Electric plant have been designed as CEII, are exempt from manda- ed equipment to facilitate import of liquefied natural gas to Infrastructure Information … procedural rules.” tory disclosure under the Freedom of Information Act and cool down existing LNG storage tanks and associated facili- may not be made available where public disclosure of infor- ties. (See stories in Petroleum News beginning in issue of Eligible for listing mation or records is required. May 5, 2019.) Tesoro said Environmental Resources Management did a To satisfy AK SHPO’s desire to document the machinery Federal, state and local approvals are required, including survey and recommended that the Kenai LNG Plant was eli- and technological process, while acknowledging the confi- authorization from the Federal Energy Regulatory gible for listing on the NRHP for historic significance in dentiality requirements of CEII, a plan has been developed to Commission under Section 3 of the Natural Gas Act, Trans- development of the oil and gas industry in Alaska and for the document prior to modification, change or removal of opti- Foreland owner Tesoro Alaska Co. said in a June 15 letter to groundbreaking design of its optimized cascade technology mized cascade machinery/technology. the Alaska State Historic Preservation Office and FERC. The and machinery. Trans-Foreland/Marathon will consult with FERC and federal authorization requirement triggered a review under ERM said it believed the facility would still be eligible for AK SHPO for any actions that would modify, change or the National Historic Preservation Act requiring federal agen- listing with the proposed changes. remove a portion of the facility’s optimized cascade machin- cies to take into account impacts on historic properties, The Alaska State Historic Preservation Office disagreed, ery/technology, and if it is determined the proposed action defined as cultural resources listed or eligible for listing on believing they changes would adversely affect the NRHP eli- would affect NRHP eligibility, then a plan will be developed the National Register of Historic Places. gibility of the facility, and proposed that the optimized cas- and approved by FERC and AK SHPO to document prior to Tesoro Alaska said Trans-Foreland and Marathon cade technology and machinery be documented with draw- any changes. l Petroleum Corp. “have fulfilled their commitment to provide ings to the standards of the Historic American Engineering a ‘historic preservation plan’” covering the optimized cas- Record. cade technology and machinery at the Kenai LNG Plant. But ERM said machinery and technology at the Kenai contents Petroleum News Alaska’s source for oil and gas news ON THE COVER 7 Donkel challenges production suspensions Talitha a go GOVERNMENT Pantheon to drill 2020-21winter well followed by Alkaid producer 5 ND regulators reject mandatory oil cuts Chevron strikes first! 6 New Mexico crafting methane rules $13B acquisition of Noble Energy largest oil deal since COVID crash Seizing opportunities NATURAL GAS First Nations participating in well cleanup, sands development 3 AGDC responds to rehearing, stay requests BLM rule relaxation rejected by Alaska Gasline Development Corp. ‘corrects misstatements federal district court on appeal and mischaracterizations of the record’ included in rehearing requests Carbon capture takes flight, forecast intake exceeded at facility PIPELINES & DOWNSTREAM Final two participants named to 2 Preservation plan set for Kenai LNG Plant Railbelt Reliability Council seats Trans-Foreland will document changes at plant, working Average ANS crude volumes for within constraints of critical energy/electric infrastructure information July edge back toward April levels 5 Michigan wants Enbridge to pledge funds for liabilities EXPLORATION & PRODUCTION UTILITIES 4 US rig count continues downward trend, now at 253 7 IGU moves LNG storage tanks to North Pole 6 ND sees steepest production drop on record

Alaska’s Oil and Gas Consultants

Geoscience Engineering 3601 C Street, Suite 1424 Anchorage, AK 99503 Project Management (907) 272-1232 (907) 272-1344 Seismic and Well Data www.petroak.com [email protected] PETROLEUM NEWS • WEEK OF JULY 26, 2020 3 l NATURAL GAS AGDC responds to rehearing, stay requests Alaska Gasline Development Corp. ‘corrects misstatements and mischaracterizations of the record’ included in rehearing requests

By KRISTEN NELSON separately; that the Corps permit excludes Kenai Pipeline System and has often trans- AGDC noted the time spent in Petroleum News ice road and ice pad acres from totals; and ported gas for industrial users from the preparing the more than 55,000 that the Corps permit is based on a prelim- Beluga Field through Anchorage to he Alaska Gasline Development pages of data in the application inary jurisdictional determination of wet- Nikiski.” TCorp. has responded to requests for and the more than 45,000 pages of lands within the project footprint area. AGDC said information from a hearing rehearing from the Matanuska-Susitna responses to 1,910 data requests AGDC said FERC did not ignore the four years ago “falls way short of estab- Borough and a request for rehearing and from FERC during the review differences but reviewed them and con- lishing that ENSTAR can deliver the quan- stay of the Federal Energy Regulatory process and said the “contention cluded the differences “would not change tities of gas that the project contemplates Commission’s order on the Alaska LNG its conclusion regarding impact signifi- that FERC has not properly to the Kenai Peninsula.” Project from the Center for Biological cance.” The borough’s “reliance on this tidbit of Diversity and Earthjustice on behalf of examined potential impacts of the Other issues which AGDC addressed testimony when it has had several years to Chickaloon Village Traditional Council, project and identified appropriate include dredging impacts and upstream demonstrate the viability of its suggested Northern Alaska Environmental Center mitigation measures is not an and downstream indirect impacts. alternative is itself telling,” AGDC said, and Sierra Club (see story in June 28 issue accurate portrayal of the extensive and called FERC’s conclusion that there is of Petroleum News). analysis performed by its Staff Matanuska-Susitna Borough no information on the record on the feasi- In a July 17 filing AGDC said the AGDC said the Matanuska-Susitna bility of the borough’s proposed alterna- motion for a stay from the Center for and reflected in the FEIS.” Borough continues to challenge several tive of serving the Kenai Peninsula “con- Biological Diversity et al “should be aspects of FERC’s analysis of the relative tinues to be correct.” denied as moot” because under FERC’s lation” between the length of the pipes and merits of siting the liquefaction facility at AGDC also said the borough “miscon- regulations issuance of authorization to emissions. Nikiski rather than at Port MacKenzie and strues the facts concerning air emissions.” proceed with construction is precluded AGDC said FERC explained that the until the time for a rehearing request has said it would not address the borough’s FERC found there would be more emis- potential for fugitive emissions is based on continued disagreement with FERC’s con- sions with a Port MacKenzie site because passed or FERC has acted on the merits of a number of factors, with “no direct linear the rehearing request. clusion. of the increased distance vessels would correlation between pipeline length and AGDC said it wouldn’t try to respond AGDC did address the borough’s con- need to travel to reach Port MacKenzie. fugitive emissions” because those emis- to all the arguments made by the Center for tention that if the liquefaction facility was The borough argues these increases are sions “occur from unintended leaks where Biological Diversity, but would respond to sited at Port MacKenzie gas could be offset by decreased emissions from a gas can escape,” and the opportunity for what it characterized as “overbroad and delivered through Enstar’s system by shorter pipeline to Port MacKenzie, “based such unintended leaks is greater from a unsupported claims” that FERC had done reversing the flow of the Beluga Pipeline. on their analysis of associated pipeline one-mile line with gas entering and leav- an inadequate analysis and to a few issues FERC said in the FEIS that it didn’t compression changes,” AGDC said. where the record and/or the law was “mis- ing at each end than emissions potential have information on the “feasibility or While the line to Port MacKenzie characterized.” per mile of a long mainline “that has sub- practicality” of that approach. would be shorter, the same number of AGDC noted the time spent in prepar- stantially fewer connections, inlets, outlets AGDC said the borough attached to its compressor stations would be required, ing the more than 55,000 pages of data in or other components where gas can request for rehearing one page from a 2016 AGDC said, so there is no offset. l the application and the more than 45,000 escape.” Regulatory Commission of Alaska hearing pages of responses to 1,910 data requests AGDC said FERC used guidance from in which the president of Enstar said the from FERC during the review process and the Interstate Natural Gas Association of company “is able to reverse the flow of the said the “contention that FERC has not America to estimate potential leak emis- properly examined potential impacts of the sions, methodology which “uses the length project and identified appropriate mitiga- of the pipeline, assuming cathodic protec- tion measures is not an accurate portrayal tion, along with the number of metering of the extensive analysis performed by its stations to estimate the annual fugitive Staff and reflected in the FEIS.” emissions.” AGDC also discussed a contention that Some specific issues FERC understated acres of wetlands that AGDC said one issue raised by the may be impacted, noting that FERC Center, the contention that FERC did not addressed reasons for different estimates explain how an 806-mile mainline pipe reported by AGDC to FERC and to the could release only 272 tons per year of U.S. Army Corps of Engineers, including fugitive CO2 equivalent emissions while differences in how FERC and the Corps 6180 Electron Drive the one-mile Prudhoe Bay line is estimated count permanent vs. temporary impacts; Anchorage, AK 99518 to release 29 tons per year, was based on that FERC addresses waters of the U.S. www.alaskasteel.com an argument that there was a “linear corre- and Cook Inlet crossing estuarine acreage PROVIDING SOLUTIONS EVERYALAASKAN ENDEAVOR Airframes Alaska, formerly Alaska Tene t and Tarp,a provides Alasska with unique and custom voѴ†ঞomv|_-| ruo|;1| 0o|_ r;orѴ; -m7 equipmentfrom thhe harshest environmeents.

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l EXPLORATION & PRODUCTION Fire Protection Specialists US rig count shows continued downward trend, now at 253

By KRISTEN NELSON Twenty-three of the holes were direc- Petroleum News tional, 215 were horizontal and 15 were vertical. he Baker Hughes’ weekly U.S. oil Tand gas drilling rig count for July 17 Alaska count unchanged showed a continuing drop, down five New Mexico (50) and West Virginia from the previous week to 253 and down (6) were each up by a single rig from the 701 from 954 a year ago. GMW has many years of experience working in Deadhorse, previous week. Each week in the last 11 the count has supporting oil field activities on the North Slope of Alaska. Rig counts were unchanged for Alaska set a new record for low number of rigs, (3), California (4), Colorado (5), North 374 rigs on May 8 of this year; 339 rigs Dakota (10), Oklahoma (10) and GMW Provides the Following Services on May 15; 318 on May 22; 301 on May Wyoming (1). • Fire Sprinkler Design and Installation 29; 284 on June 5; 279 on June 12; 266 on Louisiana (30) and Pennsylvania (21) • Fire Sprinkler Inspections and Maintenance June 19; 265 on June 26; 263 on July 2; were each down by one rig from the pre- • Fire Alarm Design and Installation 258 on July 10; and 253 for the current vious week. • Fire Alarm Inspections and Maintenance week. The Houston oilfield services com- Ohio (6) was down by two rigs while pany has issued a weekly rig count since • Special Hazards Design and Installation Texas, with the most active rigs at 104, 1944. Prior to this year, the low was 404 including FM-200 and water mist suppression systems was down by three. rigs in May 2016. • Fire Extinguisher Inspection and Service including hydro-testing and re-charge Baker Hughes shows Alaska with Baker Hughes said 180 rigs targeted three active rigs July 17, down by seven • Fire pump certification and inspections oil, down one from the previous week and from a year ago. • Portable gas monitors and systems installation and calibration down 599 from a year ago, while 71 tar- The rig count in the nation’s most • Kitchen hood service and maintenance geted gas, down four from the previous active basin, the Permian (124), was • CO2 system maintenance and recharge week and down 103 from a year ago. down by one rig from the previous week, There were two miscellaneous rigs active, and down by 316 from a count of 440 a unchanged from the previous week and (907) 336-5000 up by one from a year ago. see RIG COUNT page 6 www.gmwfireprotection.com GMW Fire Protection has offices in Anchorage and Deadhorse CORRECTIONS

907.522.9469 Eni Nikaitchuq North In the July 19 edition of Petroleum News in the story titled “Eni trying again in 2022,” this sentence, “As a result of its partner’s decision not to participate in NN-02, Eni applied for and received from BOEM a suspension of operations for an additional two year period, or until April 2022” was incorrect. It was BSEE, the U.S. Bureau of Safety and Environmental Enforcement, that gave Eni the two year suspension of operations for Nikaitchuq North drilling. www.PetroleumNews.com

Kay Cashman PUBLISHER & FOUNDER ADDRESS Mustang cold shut-down P.O. Box 231647 In the July 19 edition of Petroleum News in the story titled “Mustang sale post- Mary Mack CEO & GENERAL MANAGER Anchorage, AK 99523-1647 poned,” this sentence, “The field was offline for the entire month of December and has remained so, being officially put in warm shut-down mode in May while NEWS Kristen Nelson EDITOR-IN-CHIEF late payment and financing issues were resolved” should have read, “The field 907.522.9469 was offline for the entire month of December and has remained so until the [email protected] Susan Crane ADVERTISING DIRECTOR process of putting it in cold shut-down commenced in early April.”

In the same story this sentence, “Payment must be made at the time of sale in CIRCULATION Heather Yates BOOKKEEPER 907.522.9469 cash or by cashier’s check” should have read, “Payment must be made at the time [email protected] of sale in cash or by cashier’s check. Or AIDEA, the original beneficiary, may Marti Reeve SPECIAL PUBLICATIONS DIRECTOR enter a credit offset bid consisting of sums due it under the deeds of trust and ADVERTISING notes.” Steven Merritt PRODUCTION DIRECTOR Susan Crane • 907.770.5592 [email protected] Alan Bailey CONTRIBUTING WRITER Petroleum News and its supplement, Petroleum Directory, are owned by A limited offer from Petroleum News! Eric Lidji CONTRIBUTING WRITER Petroleum Newspapers of Alaska Special offer ends December 31 LLC. The newspaper is published Gary Park CONTRIBUTING WRITER (CANADA) weekly. Several of the individuals listed above work for independent Catch these companies that contract services to Subscribe page EIA: Brent average d $73/barrel in Vol. 23, 2 August; US crud No. 37 • www.Petroleu e 10.9 million bpd Steve Sutherlin CONTRIBUTING WRITER Petroleum Newspapers of Alaska mNews.com A weekly o il & gas newspaper based in Anchorage, Alaska Week of Septem ber 16, 2018 • $2.50 l Newfi NATUR A L G A S eld looking at Alaska; LLC or are freelance writers. Begic h, Dunleavy weigh in; L48 sha le boom tapering off Pt Thom TE son extens XA S-BASED INDEPENDENT ion NE WFIELD EXPLORATION State stays 201 has people visit- 9 date in 2012 settlem ing Alaska to lo ent on Alaska LN ok at the North Slope’s geo- G project progress logic Judy Patrick Photography CONTRACT PHOTOGRAPHER potential. ByKRISTEN NELSON Headquartered in The Woodlands, Texas, Petroleum News Also Sept. 10, the A the visiting scientist laska Gasline fall savings s are not handing out busi- Developme ness cards to he state nt Corp. announced & Save everyone they meet, so the v has stayed a deadline in its that isit 2012 set- Exxo is very hush-hush. tlement with nMobil and AGDC had a T Point Thomson opera greed to Per the ExxonMob tor what the corpo big independent’s website, il Production Co. ration called “certain key Newfield is an oil comp The settlement require terms including p any focused on profitably gro d a plan for expansion of rice and a volume basi uids-rich unco wing liq- Point Thomso s nventional resource plays in n production by the end of 2 for a Gas Sales Agreemen Ar the Anadarko and majo 019 if a t,” captured in koma basins of Oklahoma, th r gas sale hadn’t been s a “G e Williston basin (Bakken) o anctioned by June as Sales Precedent Agre f 2016. Late last year the ement” state and ExxonMobil signed S see INS reached agreeme ept. 10. IDER page 10 nt on the company’s expa plan. T nsion CONTRACT PHOTOGRAPHER he settlement required eith interest owne Forrest Crane er increasing rs and construction of State looks fo production to 30,000 a gas pipeline r RIK gas interes barrels per day of condensate between the fields). t; (the current facilities su includes Prudho pport 10,000 bpd, althoug Moving natural ga e, Point Thomson that rate has ra h s to Prudhoe was rely been achieved) or mov ExxonMobil’s choice First time subscribers The Alaska Departm ural g ing nat- . ent of Natural Reso as to Prudhoe Bay fo and urces, Division of Oil r injection there (requir- That work has now been d Gas, is soliciting interest in ing an agreemen eferred. potential royalty in-kind na t with the Prudhoe Bay w gas from the Prudhoe B tural orking ay and Point Thomson units. see POINT THOMSON p The solicita l age 12 tion, dated Aug. 31, asks E X P L O RA for expressions of interest T I O N & P R O D U C T I by letter within 30 days. O N DNR said it is consid ering whether to take the sta on future natu te’s royalty ral gas production from Pru mention this ad to receive $10 Tho dhoe Bay and Point Renee Garbutt CIRCULATION MANAGER mson in value or in kind. An optimi “If DNR st takes the i ro c outlook mention this ad yalty in kind, it is currently noncompetitiv considering a e contract,” solicitation sa ConocoPhillip th ys. The department said s ups GMT-2 forec at to consider a noncompetitive ast; moves ahead on Willo contract it “first considers w, further explora whether there is a lack o By tion f competition and whether a ALAN BAILEY noncompet- mated peak produ Petroleum News ction for its Greater Mooses T ooth 2 development in see GAS INTEREST page north the off an e-book subscription or $20 8 n a highly up eastern National P beat presentation to a etroleum GAO qu joint meetin Reserve-Alaska from 30 estions lack of prel I g of the Alaska House and ,000 barrels of iminary Senate Re oil per day to 38,0 to receive 15% off. desi sources committees on Se 00 bpd. The federal gn revi pt. ew for polar iceb 10, Scott Jep Bureau of Land Man reakers sen, ConocoPhillips Alaska agement has pub- The U.S. Govern vice president o lished a final environmen ment Accountability Office f external affairs and tal impact state- OWNER: Petroleum Newspapers of Alaska LLC (PNA) report raisin has issued a transportatio ment for the p g questions over the n, overviewed his roject, with a record of reliability of the estimated compa- dec cost and schedule for dev ny’s current exploration ision anticipated in Octo eloping new heavy polar iceb and develop- ber. That for the U.S. Co reakers ment plans in Alask SCOTT JEPSEN could lead to a final in off the print edition. ast Guard. The Departmen a, and the resulting vestment decision t of H Security, the omeland major uptick in for the project later agency that includes the the company’s expectations this year, Jepsen said. acce Coast Guard, has future A for its Meanwhile the Petroleum News (ISSN 1544-3612) • Vol. 25, No. 30 • Week of July 26, 2020 pted the GAO’s findings. laska oil production. Greater Mooses Tooth 1 dev el- C opment is moving urrently the Coast Guard on ahead, with first oil anticip ly operates two polar cap In by the en ated icebreakers: the Healy able creased production estimate d of the year. Peak production , a medium duty icebreaker is expected as a base for , much used to run at about 30,000 bp polar research, and the Jepsen said that his compan d. h Polar Star, which is a y has upped the esti- eavy-duty icebreaker but is Published weekly. Address: 5441 Old Seward, #3, Anchorage, AK 99518 41 years old. A third iceb see CONOCO OUT the Polar S reaker, LOOK page 11 ea, sister ship to the Po l P I P E lar Star, is laid up in port an L I N E S & D O W N S T R E A has become a source of sp d M are parts for the Polar Star. (Please mail ALL correspondence to: CONTACT see POLAR ICEBREAKERS page 8 Trudeau treads car Colville barges diesel to efully Slope Administration examinin Transportation com g options to salvage T pany Colville has transported rans Mountain, includ gallons of diesel fu 2 million ing an appeal el by barge to Prudho P.O. Box 231647 Anchorage, AK 99523-1647) Slope e Bay on the North ByGARY PARK , the com pany has announced. This Trudeau, firing back delivery was the first bulk For Petroleum News at his critics, of fuel to the Slope by noted that Tran barge since the 1990s, and sCanada’s Keystone XL possibly the largest ship pro Renee Garbutt ment of its type ever, the he future of ject was long ago appr said. The s company large-scale resource oved in upply barge, owned and pro Canada, but has b M operated by Crowley T jects in Canada depends h ecome entangled in the Subscription prices in U.S. — $118.00 1 year, $216.00 2 years arine, arrived at Deadho eavily United rse on Sept. 6. Because of th on how his governmen States over a failure to eng low water depths, e shal- t responds to a age in the barge had to be moored federal court rul detailed consultations with shore, with 3 miles off- ing that has stalled communities the fuel being carried to sh progress on along the pipeline rig O ore in smaller vessels. the Trans Mountain pipelin ht of way. nshore, the fuel was pump ex e “This ed into tanker trucks for tra pansion, said Prime Min is the way that the wo to Colville’s tank far nsfer ister Justin rld is Canada — $206.00 1 year, $375.00 2 years m in Deadhorse. Trudeau. going and if we can demo nstrate clarity The U.S. Coast Guard JUS an and BP oversaw the ope “What we need is TIN TRUDEAU d certainty for businesses th 281-978-2771 Dave Pfeifer, C ration, said not just this rough the olville pre process sident and chief executive o pipeline. We need to be able to the investors we will More typically fficer. to build resource proj- to get m be able , fuel for use on the North S ects of all differen ore built,” he said. to Dead lope is delivered t types with appropriate so horse from a refinery in V license,” h cial Overseas (sent air mail) — $240.00 1 year, $436.00 2 years aldez, using tanker trucks e told reporters. H Decision impacts communitie e said the objective is to s see DIESEL DELIVERY page 7 ensure that Trans Mountain and other pro Trudeau called the co jects do not get “bogged” urt decision on Trans down in endless co Mountain “frustrating [email protected] urt battles. and devastating” for com- “Periodicals postage paid at Anchorage, AK 99502-9986.” see TRANS MOUNTAIN pa ge 9 POSTMASTER: Send address changes to Petroleum News, P.O. Box 231647 Anchorage, AK 99523-1647. PETROLEUM NEWS • WEEK OF JULY 26, 2020 5 l PIPELINES & DOWNSTREAM GOVERNMENT Michigan wants ND regulators reject mandatory oil cuts North Dakota regulators on July 7 rejected imposing mandatory production cuts on the oil industry. Both Texas and Both Texas and Oklahoma rejected similar proposals Oklahoma rejected Enbridge to pledge this year as oil prices fell during the coronavirus pandem- similar proposals ic. The three-member North Dakota Industrial this year as oil Commission decided unanimously to dismiss the idea fol- prices fell during lowing a lengthy hearing in May. the coronavirus funds for liability Many oil producers and tribal mineral owners from the Fort Berthold Indian Reservation opposed mandatory pandemic. production cuts, The Bismarck Tribune reported. shutdown in June after Enbridge reported By JOHN FLESHER “Let’s let the private sector hammer out some of these things and where gov- damage to a steel anchor holding a section Associated Press Environmental Writer ernment can assist and intervene we’ll do so, but it’s probably best if we don’t go of one pipe in place. The judge later down this road,” state Agriculture Commissioner Doug Goehring said. Goehring allowed oil to resume flowing through the ichigan sought a written pledge from sits on the commission along with Gov. Doug Burgum and Attorney General other underwater pipe. MEnbridge Inc. July 17 to cover costs Wayne Stenehjem. In a statement, Enbridge said it “pledges that would arise if oil were to leak from its State regulators have imposed production cuts before, in the 1950s and 1960s to take full responsibility for the cleanup of dual pipelines that extend across a channel during the early days of North Dakota’s oil industry. But since then, the industry any incident in Michigan or anywhere linking two of the Great Lakes, although the has grown much more complex, State Mineral Resources Director Lynn Helms along our pipeline system.” Canadian pipeline company said it had said. But regulators still have the authority to declare oil as a “waste” if prices get Spokesman Ryan Duffy said one of the already made such a promise. low, and effectively require that oil producers curtail their output. agreements signed with the Snyder admin- Department of Natural Resources Many Bakken producers, as well as the North Dakota Petroleum Council, istration included a provision that “the Director Dan Eichinger asked Enbridge to asked the state to let the market decide. carry $900 million of liability insurance and Enbridge entity or entities that own and —ASSOCIATED PRESS set aside about $1.88 billion in additional assets for use as needed in the event of a see ENBRIDGE PLEDGE page 6 catastrophic spill. The twin pipes run along the bottom of A FULL-SERVICE ENGIINEERING FIRM PROVIDING INNOVATA ION FOR 40 YEARS the 4-mile-long Straits of Mackinac, which connects Lake Huron and Lake Michigan. They make up one segment of Enbridge’s Line 5, which carries oil and liquids used in propane between Superior, Wisconsin, and Sarnia, Ontario. Enbridge says the underwater section, laid in 1953, is in good condition and has P N D never leaked. Environmental groups and Democratic officials including Gov. Gretchen Whitmer contend it is a hazard that should be shut down, which Attorney General Dana Nessel is seeking in a lawsuit pending in state court. New pipe planned Enbridge negotiated a deal with former Republican Gov. Rick Snyder’s administra- tion in 2018 to decommission the twin pipes after replacing them with a new pipe that would be housed in a tunnel to be drilled beneath the straits. The company plans to begin construction next year and is seeking state and federal permits. The agreement with Snyder included a ANCHORAGE | HOUSTOON | JUNEAU | PORTLAND | SEATTLE | VAANCOUVER, B.C. pledge to hold the state financially harmless for any damages from a Line 5 spill. But the deal was signed by Enbridge Energy WWW.PNDENGINEERS.COM Company Inc., a subsidiary of Enbridge Inc., which is based in Calgary, Alberta. Enbridge Energy is the corporate successor of Lakehead Pipe Line Co., which received a state easement to place the pipes in the straits 67 years ago. In his letter to the parent company, Eichenger said Enbridge Energy doesn’t RigRig MatsMats Tim bers & Pilling have the resources to cover costs of a major spill. A state-commissioned report last year Crane Mats Timber Fabriccation found that Enbridge Inc. is not legally bound to abide by financial pledges made AAccess Mats Pressure Treating by its subsidiary in 1953, he said. Composite Mats Rigid Foam - SIPS The report noted that the chief executive of one Enbridge subsidiary had testified in CLC T Mats Boardwalks 2018 at a Minnesota hearing on different pipeline that Enbridge, Inc. is “not contrac- Camp Mats Helical Piers tually obligated to stand behind the indem- Dimension Lumberr Logistic Services nity agreements of a subsidiary.” “As recent events have reminded us, we must get these pipelines that transport crude oil out of the Great Lakes as soon as possi- ble,” Eichinger said in a statement. “In the meantime, Enbridge must provide full financial assurance to the people of Michigan that the company will meet its obligations in the event there is a spill or some other disastrous damage to the Great PO Box 92688 An AnchAlkhorage, Alaskaa 99509 Lakes.” OfO ficefi e (907) 290-8031 Tollo Free (8444) 479-0763 Temporary shutdown in June A state judge ordered a temporary Line 5 alaskamaterials.com [email protected] 6 PETROLEUM NEWS • WEEK OF JULY 26, 2020 EXPLORATION & PRODUCTION ND sees steepest production drop on record North Dakota oil and gas production plunged about 30% May, as oil companies idled wells and halted drilling plans after prices collapsed due to the coronavirus. The Department of Mineral Resources reported July 17 the state produced an average of 858,000 in May, down from 1.2 million barrels in April. North Dakota’s natural gas production also fell from 81.3 billion cubic feet in April to 59.7 billion cubic feet in May. The May tallies are the latest figures available and represent the sharpest monthly To advertise in Petroleum News, drop on record. There were 12,809 wells producing in May, down from 15,474 in April. contact Susan Crane North Dakota had 17 drill rigs operating in May, down from 35 in April. There at 907.770.5592 were 10 drill rigs operating in the state July 17. petroleumnews.com —ASSOCIATED PRESS GOVERNMENT New Mexico crafting methane rules New Mexico stands to have some of the most expansive rules for addressing methane and other emissions from the oil and gas industry after many meetings with industry experts and environmentalists, state officials said July 21. Policymakers with New Mexico’s energy and environment agencies say they have combined what has worked well in other states with some new ideas to craft a set of regulations that will mandate significant emissions reductions by the end of 2026. The proposed regulations appear to offer a higher level of reduction than in other states and would apply more broadly to existing and new sources, officials said during a briefing on the proposal. The public has time to comment before regulators with the Environment Department and the state Energy, Minerals and Natural Resources Department hammer out the final rules. Proposed rules by the energy agency deal with waste due to venting and flaring in oilfields. The draft rules released by the environment department target oil and natural gas equipment that emit volatile organic compounds and nitrogen oxides. Officials say regulating these emissions also will result in reducing methane emis- sions. There also are incentives for companies to find and fix leaks within their sys- tems, and the state would be able to collect revenues on vented and flared gas, which could benefit public schools to the tune of millions of dollars a year. Operators would need to reduce their waste by a fixed amount every year to achieve an ultimate gas capture rate of 98% by December 2026. There would be fewer requirements for those with less potential for emitting pollution, while operators with the greatest emissions would face greater scrutiny. Environment Secretary James Kenney said his goal is to keep New Mexico’s ozone problem from getting worse and therefore avoid federal sanctions. —ASSOCIATED PRESS

continued from page 5 with the report’s methods and conclusions but would keep that sum of money available ENBRIDGE PLEDGE to deal with a spill if needed. “Since we already have an agreement operate Line 5, or the parent companies” of with the State of Michigan to provide these such entities, would “maintain in force assurances, if the State would like to sit down financial assurance mechanisms that meet and discuss our financial assurances, we or exceed” $1.88 billion. would be happy to do so,” the company said. That figure came from an independent The Chippewa Ottawa Resource analyst’s estimate of costs from a worst-case Authority, which represents Native spill in the straits. Enbridge said it disagreed American tribes with fishing rights in the straits area, backed the state’s request for an airtight promise from Enbridge’s parent company. “The Straits is more than a waterway; said Bryan Newland, chairman of the Bay Mills Indian Community. “They are a place of ongoing significance to the way of life of PROVEN. for the Tribes since time immemorial.” l

continued from page 4 RIG COUNT

year ago. COLD WEATHER. Baker Hughes has issued weekly rig counts for the U.S. and Canada since 1944 and began issuing international rig counts in 1975. The U.S. rig count peaked at 4,530 in 1981. This week’s count of 253 is a new low, surpassing lows set in the previous PRRUDHOE BAY 10 weeks. Prior to that the previous low PERFORMANCE. was 404 rigs in May 2016. l 9007-659-2000 [email protected] PETROLEUM NEWS • WEEK OF JULY 26, 2020 7

UTILITIES INTERIOR GAS UTILITY

Two LNG storage tanks are moved from Fairbanks to North Pole. IGU moves LNG storage tanks to North Pole The Interior Gas Utility has announced that it is moving two liquefied natural gas tanks from Fairbanks to North Pole as part of an initiative to make natural gas available to households and businesses in the North Pole area. The move of the tanks, which will enable the storage of LNG in North Pole, comes as part of the Interior Energy Project, an Alaska Industrial Development and Export Authority project to bring increased supplies of affordable natural gas to Fairbanks and its surrounds. PLANS CHANGE. A previous phase of the IEP involved constructing an initial gas distribution pipeline network in North Pole. The LNG storage facility under construction will make possible a supply of gas through that network. The two tanks for the facility DEADLINES DON’T. became available after IGU completed a new 5.25 million-gallon LNG storage facility in central Fairbanks at the end of last year. The tank in Fairbanks, while With Lynden you can choose the mode – air, land, or sea – that storing gas for use in the city, will also act as backup storage for North Pole. best fits your schedule and budget. Important shipment? “The movement of the storage tanks is an exciting major milestone in provid- Track it from anywhere using Lynden’s mobile app, or choose ing North Pole residents the ability to ‘breathe easier’ with clean, natural gas,” to receive email updates as the status changes. said IGU General Manager Dan Britton. The LNG is produced at IGU’s Titan plant, near Point Mackenzie on the Cook Download at www.lynden.com/mobile Inlet. A decision on whether to expand that plant has been deferred as a conse- quence of economic uncertainty associated with the COVID-19 pandemic. However, the greatly expanded LNG storage capacity in Fairbanks will enable the warehousing of summer-produced LNG, thus enabling the supply of gas to more customers in Fairbanks and North Pole. “When we look back at where we were a year ago compared to where we are now, we are greatly encouraged that, even with the turmoil of COVID-19, we are able to continue to move forward with bringing access of cleaner burning natural gas to our community for both Fairbanks and North Pole homes and businesses,” said Steve Haagenson, chair of the IGU board. FULL DAY FISHING —ALAN BAILEY EXPLORATION & PRODUCTION Halibut $195 | Combos $250 Donkel challenges production suspensions Daniel K. Donkel, who holds overriding royalty interests in leases at the Redoubt and West McArthur River units, is appealing the June 4 approvals of sus- pensions of operation and production for the units by the Alaska Department of Natural Resources’ Division of Oil and Gas (see story in June 14 issue of Petroleum News). The units are operated by Cook Inlet Energy, a Glacier Oil & Gas Corp. com- pany. In its May 28 applications for the suspensions, Glacier cited low oil prices and a lack of demand as reasons for the suspensions, which are requested through April 30, 2021. Donkel, through attorneys Bankston Gronning Brecht, has appealed the divi- sion’s decisions to DNR Commissioner Corri Feige, citing a lack of supporting evidence for the requests by the operator, and questioning the reasons Glacier cites for the suspension. Fish in comfort aboard our spacious vessels with options in The appeal also said public comment was not solicited by the division and that locations! Our licensed Captains and crew members will assist neither Donkel, nor to his knowledge any other royalty interest owners, aside from start to finish during your day and filleting of all fish from the state, were notified prior to the division’s decision. The state has a royalty interest of 12.5% in all the leases in both units. is included on every charter! Deducting the state’s royalty, CIE, the 100% working interest owner, has a roy- alty interest at the five Redoubt leases ranging from 79.3% to 83.4%. There are combined overriding royalty interests of 4.1% to 8.2%. At the three West McArthur River leases, deducting the state’s royalty, CIE has royalties of 75% to 85.8%; combined overriding royalty interests total 1.7% to 12.7%. In addition to questioning oil price and demand as reasons for the suspension, the appeal said there is no evidence the division considered potential harm to the reservoirs from shutting in the wells. Donkel is asking that the suspension be stayed pending review of possible Homer | Seward | Ninilchik impact to the reservoirs and “full disclosure to all interested parties and a mean- ingful opportunity to be heard.” In April, the last month for which the Alaska Oil and Gas Conservation Ninilchik Charters Commission shows a full month of production from the units, Redoubt averaged 1,676 barrels per day and West McArthur River averaged 374 bpd. 907.260.7825 —KRISTEN NELSON www.ninilchik.com 8 PETROLEUM NEWS • WEEK OF JULY 26, 2020

continued from page 1 gy transition,” Kassam said. bon levy in an effort to reduce emissions. “Carbon capture and storage is She said a reservoir below the upgrader Kenney, after ousting the NDP regime CARBON CAPTURE working and Quest is a model stores the carbon emissions and is han- last year, dumped the Notley carbon tax in facility that others are learning dling the carbon dioxide with greater ease favor of a new program that lowered the The cost of running Quest, which draws from across the globe to scale up than had been initially expected. taxation rate while shelving his earlier its CCS from the oil sands, is about 35% CCS.” —Alberta Premier Jason Kassam said that if Quest could be doubts about CCS. less than originally forecast in 2015, while “Carbon capture and storage is working Kenney replicated savings could be about 30% downtime has been less than 1% a year. below the anticipated operating costs of and Quest is a model facility that others are Shell has carried what it has learned about C$40 per metric ton of stored CO2, learning from across the globe to scale up from Quest, built at a cost of C$1.3 billion Upgrader, which converts raw oil sands while the cost of building a new facility CCS,” he said earlier in July. with C$745 million from the Alberta gov- bitumen into synthetic crude for refining. could be C$80 per mt, compared with the Energy Minister Sonya Savage said ernment and C$120 million in federal initial estimate of C$120 per mt. Quest’s milestones are a “perfect example funds, to other CCS projects around the Shell explores more CCS projects In 2014, the Alberta government spent of how the use of game-breaking technol- world, including the recently sanctioned Shell is also exploring the possibility of C$1.4 billion in two CCS ventures, includ- ogy will enable Alberta to build on our Northern Lights project in Norway, along building more CCS projects in Alberta. ing Quest — spending that accounted for existing energy foundation and pave the with Total and Equinor as partners. Quest development and opportunity plan- 10% of world investment in CCS. way for emerging sectors to grow and In 2017, a majority block of Quest was ner Sarah Kassam said the operation But Rachel Notley, leader of the social- prosper.” purchased by Canadian Natural Resources allows Shell to lower carbon intensive ist New Democratic Party that won gov- —GARY PARK Ltd. as part of its blockbuster C$12.7 bil- projects at Scotford. ernment in 2015, insisted CCS was too lion deal that included the bulk of Shell’s “We see that as a pathway to decar- expensive for her administration and, oil sands assets in Alberta and the Scotford bonizing our industry and supporting ener- instead, introduced a strongly opposed car-

continued from page 1 RRC SEATS NEED TO STRETCH independent power producers, one member representing consumer interests, a repre- sentative from the Alaska Energy Authority and two non-affiliated members. YOUR DOLLAR? The Legislature enabled formation of the RRC, an electric reliability organiza- tion, and updated the Regulatory Commission of Alaska’s authority with Becoming a contracted advertiser Senate Bill 123, passed and signed by the To become a Petroleum News ‘contracted advertiser’ you simply have to agree to run 12 ads of any size over a 12-month period. governor this spring. In return we’ll give you this additional marketing exposure: This followed signing in December of a BUSINESS SPOTLIGHT 20 memorandum of understanding for forma- PETROLE UM NEWS • WEEK OF JU LY 13, 2008 Cruz Construct ion, Inc Business Spotlight Cruz Constru . ction is O Exposure in the weekly Petroleum News a general T experien ced contractor O tion of the RRC by the six Railbelt utilities. in remote exploration H Opt P i St large-scale support affing G heavy c and Y rou ivil projects S p logistic .Itsextensive E Opti S al capabilities T taffing Gr R oup i get the s the pr E equipment right U pers emie people onnel pr r, full serv N where and O ovid ice they er in the A are C m Constru needed. ed on o arketplace.It R ction Cruz ne pri was f C has been nciple alon ound- 24 designated l e: Individu T PETROLEUM NEWS • WEEK OF SEPTEMBER 20, 2015 “first responder” a 10-year yst behind als are th S for the success e cata- E the Alaska a of any org R Emergenc Division of nd objectives anizations go R y Services ,and ther als O due to efore ar F to mobilize the company’ any organiza e the key asset statewide s ability tion possesses.P that The RCC will mandate reliability stan- on extremely the cen lacing the i Jeff Miller graduated short notice ter of focus for ndividual at from . obje Opti Staffing G University (c Oregon State ctives and its in roup’s own onstruction engineering m ternal employe ment, business manage- aintaining this es’ career goal degree) regarding the a s, Constru and worked for Wilder candidates it r spirations of th Oil Patch Bits ction three epresents,and e years fin operation before joining between a cli ding the right m • You make the List in 2004. the Cruz ent’s organizat atch Jeff and ple i ional go two daughters wife Monica t hires,has led als and the peo and a son; have Jeff Miller to a higher ra - Each MiHow2 video is filmed in a workshop or appropriate off-site setting and features coac dad has great , senior proje other personne te of success th hing their athleti fun ct manager l providers and an Schaeffler centers in on bearing replacement in video quent c teams. He Staffing Gro embodies Opt dards, administer rules for open access to w also loves up’s mo i Avonly Motion Industries’ energetic and knowledgeable host, Tom Clark. intertime pratfalls working and tto: “Our succ Lokan, founder provide great playing outdoors Founded by ess is determin Motion Industries, a lead- entertainment , and his Avonly Lokan, ed by your suc The series is also available for viewing via Facebook and YouTube. Additional MiHow2 to bystanders fre- daughter,th a long time An cess!” . is way of doing chorage reside ing distributor of industrial success r business has l nt along with h and Tom’s Toolbox videos are scheduled to be posted in coming weeks. For more informa- ates in the Pa ed to the expa er husband an —PAU sta cific Northwe nsion of this b d • Your employees are spotlighted maintenance, repair and LA EASLEY ffing and the r st and continu usiness mode tion visit www.motionindustries.com. ole ind es to ch l and i ividuals play w allenge traditi ts ithin the empl onal thinking a operation replacement parts, oyment arena. bout is pleased to announce the Comp —PAULA the grid, conduct Railbelt-wide system Y-Tech Services Inc. awarded DLM contract EA release of another MiHow2 anies involved SLEY video. The goal of the video Y-Te ch Services Inc., a subsidiary of Yu lista Holding LLC, has been awarded the MH-60T and nort in Alaska • Your news gets in Oil Patch Bits series is to provide instruc- rotary wing aircraft depot level maintenance support services contract for the United hern ADVERTISER Ca COURTESY MOTION INDUSTRIES MOTION COURTESY nada tion to viewers to help them States Coast Guard. Y-Tech Services will support the USCG Aviation Logistics Center ’s oil PAGE AD APP and EARS A g with their practical applica- Medium Range Recovery product line and other support divisions such as the ALC’s indus- DVERTISER as industr ACE A A y tions. ir Cargo Delta L PAGE AD A trial operations division by providing a full range of DLM services including, Aircraft disas- easing PPEARS A planning and investigate the economic DV Air Liquide . . De ERTISER Th e video shows how to ...... lta P Pump a sembly and component repair and support. The MH-60T mission includes search and res- Air Lo ...... nd Leasing P gistics of Ala ...... Dowlan Natco Can AGE AD APP avoid jamming the bearing at ska . . . .19 d-Bach Corp. ada EARS cue, combat support, law enforcement, international ice patrol, marine environmental pro- Airport Equi D Natu pment oyon Drilling re Conservan one end when replacing Alask cy,The . . . . tection, and marine resource conservation. 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HARRIER Alliance, a and Mini Utah. Employee ces ...... Mud & Mud Logging . .37 Organization (ERO) for the Railbelt elec- m ake it M y Support gineering s Energy Servi ...... 25 ...... weekly “M Industr lege of En from spo ng Services ...... Oilfield Services ...... 39 ES nizing the es edi- banks Col nsoring Engineeri ...... 26 ...... IL & GAS COMPANI ga as featur laska Fair comp Engineering ...... te Medical Services ...... 9 O . .45 r, Harrier w sity of A anies accom- Environmental . . . .26 On-Si ...... 3 ...... ms. Chambe ewspa- p eanup ...... Operators ...... ru e Anchorage -weekly n any the students Environmental Response & Cl ...... 28 Permitting ...... 39 joining th lley’s thrice ...... Before Mat-Su Va on the trip, he Environmental Supplies ...... 28 Photography ...... 39 rsman, the lp- ng ...... Thread Technology . . . . . he Frontie ing the stu Equipment & Heavy Hauli . .28 Pipe, Fittings & tor for t dents ...... grasp geological Equipment Sales/Rental . co ncepts, and serv- ing as mentor tric system as defined in recent legislation, s for the interested young scientists. NEWS ITEMS Senate Bill 123,” the group said. PHOTO FEATURES “The Railbelt Reliability Council is a historic agreement and offers a chance for Hats off to meaningful participation from a wide vari- ConocoPhillips! * VUNYH[\SH[PVUZVWLYH[ VY*VUVJV7OPSSPWZ HUKWHY[ULYZ) (SHZRH 7HUK*OL]YVUVU oil productio [OLZ[HY[\WVM n from your Shark at Ku Tooth discovery paruk Drill Site 2S ety of stakeholders to address much-needed . Bro ught in under bud HUKHOLHKVMZJOLK get \SLP[PZ[OLÄYZ[U at Kuparuk in L^KYPSSZP[L more than 12 years [VHKK and is expected IHYYLSZVMVPSWL pro YKH`H[WLHR duction. The $475 uarles, million project cre Mr. Q QVIZK\YPU ated about NJVUZ[Y\J[PV contra U^P[OU\TLYV\Z ctor companies an elcome to Alaska!d trades involved. planning issues along the grid,” said Veri di w n Joe Maru so shack, pre t Thom sident ConocoPhillips orea to Poin Alaska alift from K ABR Exposure in co-op ads for your customers ccessful se on a su AECOM ductionD ET-TRONICS ratulations Enviero nmeewn tAlaska pro Cong nce 1A9E9S8, is th Dowland NEI Fluid Tec obil employee si Electric Supply ignment in the -Bach Corp. hnology nd an ExxonM s taken an ass Nord uston, Texas, a gedorn, waheoSo hluations Doyon Anvil ic Calista es, a native of Ho ceeded Karen Ha L5VY[O:SVWLÄLSK Cory Quarl o., having suc Air LiquHiYYd P]LKH[[O Doyon Drilling North Slope Telec obil Production C MVY7VPU[;OVTZVU e ion startup om er for ExxonM ZZPUNTVK\SLZ Ala il says product +V`VU North Star E manag [VM[OLWYVJL tor Exsxkoan CMleoanb Seas (A 3PTP[LK quipment Services Suvero, the consumer advocacy member of VIPS»ZZLHSPM Field opera CS) (NSES) NKVT,__VU4 s from Korea. Alaska Doyon Uni Northern Air Ca LZ CH2M Lynden Air Freig Delta Leasing UIC Desig lco [VU:VS\[PVUZ0UJ CO-OP ADVERTISEMENTS port Services Inc. Gas Sup NA CHI Aviation Lynden UIC Oil and NA WorleyParsons l chine bric Structures nden Internationa Unique Ma In addition to defining and enforcing arSpan Fa Ly Cle s ibelli CN Rail Lynden Logistic Us port erizon Colville Inc. Lynden Trans V atives c Alaska Vigor Alaska Computing Altern MagTe tion s of Alaska ION Investments CONAM Construc Mapmaker V b roducts Inc. oPhillips Alaska MAPPA Testla Volant P Conoc , Inc. nery Industrial me Helicopters Weston Solutions onstruction Machi Mariti C ustries Cook Inlet Energy Motion Ind Crowley Solutions electric reliability standards, coordinating 9

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to If your annual contract exceeds $7,100 C ugro is xplain who F Q. Can you e ders? pa- our rea roup of com is a global g , A. Fugro nical, survey g in geotech es specializin rvices. We ni nsultancy se a, and geoco xpert- subse quipment, e he people, e si- utilities, independent power producers and provide t pport respon hnology to su ise, and tec helping evelopment, le resource d uncer- b sk and avoid ts manage ri eid- clien uartered in L e are headq e We’ll profile your company We’ll work with you on a two-page Q&A company profile that will tainty. W nds, and hav la ndam, the Nether ous- sche dquarters in H merican hea ffice other grid users, RCC will work with the rth A ska, o No chorage, Ala exas. Our An hich ton, T ub through w a regional h to serves as l capabilities ugro’s globa we deliver F appear in the Arctic Oil & Gas Directory. Afterwards, you can frame it or use it as a company de. clients statewi ocated? ur company l Where is yo mid- RCA to develop a cost sharing methodolo- Q. ted in office is loca A. Our Alaska rage. town Ancho Slope. brochure or flyer. nt people to on the North a am ou most w azards progr . What do y r a shallow h f oil Q y? ets control fo number o t your compan urvey team s orking on a know abou ng in Alaska Fugro s A. We are w th in Cook been worki ission- Alaska—bo A. Fugro has ing on- ual decomm as projects in 14 gy for assets with a regional benefit and m t 0 ears, perfor ion and even and g uring the 2 ore than 40 y nd product the Arctic. D for m jects for oil a Inlet and mobilized in offshore pro b- ing. f survey- crews were shore and ergy, and pu ort a number o field season, te. We ustainable en e also supp aska for s across the sta as, mining, s reat pride W grams in Al tiple location shallow g rs. We take g mapping pro es. mul nd offshore ctor custome o con- ing and ment agenci ed onshore a lic se committed t ate govern perform ted with rig tory and are federal and st hic charting sments, assis in this his . e hydrograp hazard asses rossing as- s in the state mples includ os- ed pipeline c inued succes Exa anic and Atm es, perform stems, will identify and facilitate implementation t ce mov sy he National O d air- led metocean pany for t n (NOAA) an ments, instal for the as the com dministratio sess ocessed data We’ll give you free online advertising When Petroleum News readers click on articles each week . What year w pheric A lite based uired and pr busy Q d satel and acq other by whom? borne an pport of oking to be an ounded and ervices in su . 2015 is lo wnturn f unded mapping s al SDMI he global do . Fugro was fo tewide Digit despite t ders A gi- the Alaska Sta year for us . As stakehol by Dutch en ive (SDMI). nd gas market s in 1962 pping Initiat in the oil a rateful for thi oustra, Ma opment re, we are g neer Kees J source devel Alaska’s futu ate and for of effective ways for the Railbelt electric n The re u- in t in our st e focus was o long with n ed investmen us they will see your ad, which will appear in rotation on the current story pages. The size of your whos y ommunity, a continu e instilled in c on technolog benefits from t clients hav foundati takeholders, the trust tha ms. hanics. erous other s d safe nav- these progra and soil mec m ets, which ai partners on blic datas anning as primary these pu eliminary pl your company’s d support pr sti- ployees does hat is your igation an d route inve w many em Q. W h as siting an Q. Ho ctivity? n- activities suc e? business a lved in the e company hav mploys ap- system to reduce electricity costs for nvo ro e annual contract determines the size of your online ad. o is heavily i gations. ny-wide Fug gr ith pa A. Fu working w A. Com sionals. Lo- and has been ojects the ,500 profes ergy sector ska since the portant pr oximately 12 e anies in Ala re there im s pr on next pag d gas comp gned to Q. A t of or ha Continued oil an ices are desi s currently a par 70s. Our serv om company i early 19 t lifecycle, fr y? e full projec o done recentl support th nt, through t o developme exploration t ratepayers. WEB ADS —KRISTEN NELSON

Contact | Renee Garbutt, Phone 281-978-2771 | Susan Crane, Phone 907-770-5592 PETROLEUM NEWS • WEEK OF JULY 26, 2020 9 Oil Patch Bits

Diamond Grid USA welcomes John Horjes to its team Trucano Construction and Jim Harper and Southeast Alaska Diamond Grid USA & Diamond Grid Canada announced July 20 Barge Lines was established. the appointment of John Horjes to executive director of the busi- “This began the long and pro- nesses to facilitate ongoing expansion targets. Horjes will lead the ductive partnership between establishment and expansion of the Diamond Grid product into the Lynden and Western Towboat USA and Canadian markets — two regions which have been identi- that we still enjoy today,” said fied as key areas of focus for Diamond Grid. Alaska Marine Lines President

Horjes is well credentialed in business management and strategy, Kevin Anderson. ALASKA MARINE LINES COURTESY hailing from a strong background of business development, invest- Two years later, Southeast ment banking and mergers and acquisitions of key businesses. Alaska Barge Lines was Horjes said that he is excited to be joining Diamond Grid, a global renamed Alaska Marine Lines. In 1985, as Foss Alaska Lines withdrew from Southeast serv- market leader in surface stabilization and erosion control systems. JOHN HORJES ice and Pacific Western Lines curtailed its service, Alaska Marine Lines purchased selected “Diamond Grid is a unique and innovative product with inim- assets from those barge carriers and added many employees who are still with the Lynden itable strength characteristics. The concept is simple, but the applications are boundless and companies today including Executive Vice President Alex McKallor. Also that year, service there’s a lot of excitement within the mining, agricultural, construction and landscaping partner Arrowhead Transfer headed by Gordie Harang began providing services to Alaska sectors in response to it. Diamond Grid offers the cost savings, easily solves erosion issues Marine Lines in Southeast Alaska. and makes construction of paving and hardstand areas a breeze. Its application as an alter- Looking back, Anderson said some of the biggest changes have been in equipment. native to traditional concrete formwork is saving customers time and significant costs. It is “We’ve gone from 20-foot containers to 40’s, then 48’s and now 53’s, and forklifts with a great to have the opportunity to work with a product that services everyone from large capacity of 55,000 pounds that can now lift 120,000 pounds,” he said. “The first barge was scale industrial customers to DIY’s.” 130 feet long with a 1,000-HP tug. Today we have 420-foot barges towed by tugs with Diamond Grid’s Managing Director Ben Kirkup said that Diamond Grid is on track for 5,000-HP.” another solid year of business growth globally despite economical disruptions. In 2019, Alaska Marine Lines expanded its service area to include Arctic villages like For more information visit http://www.diamondgrid.com. Kaktovik to better serve customers statewide and this year has expanded its fleet with the purchase of two cargo barges. Alaska Marine Lines celebrates 40 years “As we celebrate four decades of business, I’d like to honor the dedicated and talented employees, past and present, who have contributed to our success,” Anderson said. “We As reported by Lynden News July 15, Alaska Marine Lines celebrates its 40th anniver- now service every major coastal region in Alaska. I look forward to seeing what the new sary this year! That is 40 years we’ve been privileged to serve our amazing customers and decade will bring.” local communities, 40 years side-by-side with the most wonderful, hard-working people in the barge industry and 40 years of experience fine tuning our service and reach to offer the Editor’s note: Some of these news items will appear in the next Arctic Oil & Gas largest fleet of equipment in Alaska, the company said. Directory, a full color magazine that serves as a marketing tool for Petroleum News’ In 1980, Lynden acquired the assets of Southeast Barge Lines from Western Towboat, contracted advertisers. The next edition will be released in September. Companies involved in Alaska’s oil and gas industry

ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS Cruz Construction Matson

A Denali Universal Services (DUS) ABR Inc. Doyon Anvil Acuren N-P Doyon Associated Nabors Alaska Drilling AES Electric Supply, Inc Doyon Drilling NANA WorleyParsons Afognak Leasing LLC Doyon, Limited Nature Conservancy, The Ahtna, Inc. EEIS Consulting Engineers, Inc. NEI Fluid Technology Airgas, an Air Liquide company Egli Air Haul ...... 11 Nordic Calista Airport Equipment Rental ...... 6 exp Energy Services North Slope Telecom Alaska Dreams F. R. Bell & Associates, Inc. Northern Air Cargo Alaska Frontier Constructors (AFC) Fairweather Northern Solutions Alaska Marine Lines ...... 7 Flowline Alaska NRC Alaska, a US Ecology Co. Alaska Materials ...... 5 Fluor Oil Search Alaska Railroad Frost Engineering Service Co. – NW Pacific Power Group Alaska Steel Co...... 3 Fugro PND Engineers, Inc...... 5 Alaska Tent & Tarp PENCO Alaska Textiles G-M Petroleum Equipment & Services, Inc. Alaska West Express ...... 7 GCI PRA (Petrotechnical Resources of Alaska) ...... 2 American Marine GMW Fire Protection ...... 4 Price Gregory International Arctic Controls Greer Tank & Welding ARCTOS Alaska, Division of NORTECH Guess & Rudd, PC Q-Z Armstrong HDR Engineering, Inc. Raven Alaska – Jon Adler AT&T ICE Services, Inc...... 12 Resource Development Council Avalon Development Inlet Energy SALA Remote Medics Inspirations Security Aviation B-F Judy Patrick Photography Shoreside Petroleum Bombay Deluxe Little Red Services, Inc. (LRS) Soloy Helicopters BrandSafway Services LONG Building Technologies Sourdough Express Brooks Range Supply Lounsbury & Associates Strategic Action Associates C & R Pipe and Steel Lynden Air Cargo ...... 7 Summit ESP, A Halliburton Service Calista Corp...... 10 Lynden Air Freight ...... 7 Tanks-A-Lot Carlile Lynden Inc...... 7 The Local Pages ChampionX Lynden International ...... 7 TOTE – Totem Ocean Trailer Express Chosen Construction Lynden Logistics ...... 7 Weston Solutions Colville Inc. Lynden Transport ...... 7 Wolfpack Land Co. Computing Alternatives M-W Drilling All of the companies listed above advertise on a regular basis CONAM Construction Maritime Helicopters with Petroleum News

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continued from page 1 on what assessments are needed for the WELL CLEANUP project to proceed. Trans Mountain project operations, which benefit the communi- ty’s 12 companies that service the oil In line with indications from the industry, employ more than 1,400 people Canadian government, Treaty Six First Nations Grand Chief Billy Morin said he and have generated up to C$500 million expects an early announcement from in annual revenue Prime Minister Justin Trudeau on an Pinto declined to estimate how much ownership position for Indigenous com- crude Moose Lake reserves could yield munities in the Trans Mountain project, beyond saying his community aims to be TMX. a leader in resource development, while Two years ago, at a groundbreaking balancing that “in a better environmental ceremony for TMX, the Enoch Cree way than is being done today.” Nation announced a C$6 million invest- He hopes to deliver a firm proposal by ment to develop equipment stockpile sites the end of this year to the Fort McKay chief and council, laying out information see WELL CLEANUP page 11

continued from page 1 risked unconventional basin that ... gives us another piston in the unconventional CHEVRON DEAL engine,” Wirth said. The company will take over an opera- moderated by concerns over new out- tion of a natural gas project in the Eastern breaks of COVID-19 in portions of the Mediterranean. United States and elsewhere, thus asset “Anchored by the Leviathan and prices remain subdued. Tamar assets, and supported by offtake “This is an attractive transaction that agreements from Israel, Egypt and strengthens Chevron’s performance … Jordan, these assets are expected to gen- through high-quality, cash-producing erate strong cash flow for decades,” Wirth assets that are complementary to said, adding that Chevron will get a total Chevron’s global portfolio and capabili- of six exploration blocks in Egypt and a ties … low-cost proved reserve and discovered resource opportunity in resource additions … and achievable syn- Cyprus. ergies that we expect to drive accretive In West Africa, Chevron will acquire financial metrics and enhance our flexible an established position in Equatorial capital program,” Mike Wirth, Chevron Guinea, “with opportunities to continue chairman and CEO said in the July 20 to monetize resources through existing conference call. regional capacity,” he said. Based on Noble’s proved reserves at The Equatorial Guinea assets lie year-end 2019, the transaction will add between Chevron’s existing operations in approximately 18% to Chevron’s year- Angola and Nigeria. end 2019 proved oil and gas reserves at an average acquisition cost of less than $5 Holdings and history in Alaska per barrel of oil equivalent, and almost 7 Chevron has a history in Alaska, with billion barrels of risked resource for less experience in the Cook Inlet basin as well than $1.50 per boe, Chevron said. as on the North Slope. Chevron, pending approval of Noble In the 254,235 acre Prudhoe Bay unit, shareholders and regulators, is set to Chevron U.S.A. holds a 1.16%. interest, acquire all outstanding shares of Noble in according to the Alaska Division of Oil an all-stock transaction valued at $5 bil- and Gas. lion, or $10.38 per share — 0.1191 shares The division reported in April that of Chevron for each Noble share based on ConocoPhillips Alaska transferred a Chevron’s closing price on July 17. working interest of 4.9506% in 13 The total enterprise value, including Kuparuk unit Beaufort Sea and North debt, of the transaction is $13 billion. Slope leases (or parts of leases) to Building on strength Chevron U.S.A., including Nuna leases ConocoPhillips recently acquired and Noble’s debt load very likely was a absorbed into Kuparuk. A 4%-plus royal- catalyst for its management to enter the ty interest was also transferred from Chevron agreement. ConocoPhillips to Chevron as part of the Noble entered 2020 with long term transaction, which ConocoPhillips said debt of about $7.4 billion. Seven months was part of a December sale to Chevron. ago, Noble sported a market capitaliza- Chevron holds a 4.95% working interest tion of about $12 billion, but as of July in the Kuparuk River unit. 22, its market cap stood at $5.26 billion. Chevron also holds a 11.11% working Chevron’s market cap on July 22 was interest in the Duck Island unit. over $170 billion, and its long term debt Chevron bought Unocal in 2005 and totaled only $23.6 billion at year end holds a 1.3561% interest in the Trans 2019. Alaska Pipeline System through its sub- Chevron has weathered the downturn sidiary Unocal Pipeline Co. well compared to other oil companies. Chevron has unique access to valuable Chevron stock has bounced back from geological data regarding the Arctic its coronavirus low share price by 76% to National Wildlife Refuge. $91 on July 22, from $51.60. By contrast, Operator Chevron and BP were part- Exxon stock moved from an April low of ners in the KIC No. 1 well, which was $30 to $43.61 on July 22, a 45% gain. drilled in 1986 and remains the only well “Chevron (is) taking advantage of its in the 1002 Area of ANWR. strong relative performance versus the Chevron is also part of a consortium of U.S. exploration and production compa- companies that have access to vintage 2D nies and capitalizing on the downturn to seismic data in ANWR, along with buy into some high-quality assets,” said Anadarko, BP, ConocoPhillips, Anish Kapadia, head of London-based ExxonMobil, Hess, Marathon, Murphy, independent oil and mining advisory Oxy, Shell and Total. Palissy Advisors. Congress has mandated that two With the Noble deal, Chevron will bol- 400,000-acre lease sales be held in the ster its 2 million-acre position in the 1002 Area by the end of 2024. l Permian Basin, picking up 92,000 largely contiguous and adjacent acres. Chevron also will gain new acreage in Contact Steve Sutherlin the DJ Basin of Colorado, “a proven de- at [email protected] PETROLEUM NEWS • WEEK OF JULY 26, 2020 11 continued from page 1 agency cannot flip-flop regulations on the “Together we are increasing the whims of each new administration,” the Meanwhile on July 16 the Oil and BLM RULING speed, scale, and impact of our judge wrote. Gas Climate Initiative, a actions to address climate change, Moreover, unlike the 2016 rule, the consortium of oil and gas circumstances. Limits also applied to the as the world aims for net zero new rule does not address the issue of companies supporting reduced flaring of methane. public welfare in relation to the need to In Alaska the rule applies to oil and gas emissions as early as possible.” methane and carbon dioxide curb venting, flaring and leaks resulting operations on federal land, particularly in —Oil and Gas Climate Initiative emissions, including several oil from increased oil and gas production, the the National Petroleum Reserve-Alaska, majors, announced new targets for where there are active programs of oil judge wrote. For various reasons, the reducing the carbon intensity of two years earlier, and from a failure to development of the new rule failed to exploration and development. However, their operations. in Alaska, including on federal land, the comply with obligations under the comply with the Administrative Alaska Oil and Gas Conservation National Environmental Policy Act. Procedures Act. And, under the terms of Commission and the Department of “Instead, in its zeal, BLM simply engi- the National Environmental Policy Act, including emissions associated with Environmental Conservation enforce neered a process to ensure a preordained BLM should have prepared an environ- imported electricity and steam. strict rules aimed at preventing the conclusion,” the judge wrote in the court mental impact statement for the rule “Encouraged by the progress we have wastage of hydrocarbon resources and the order upholding the appeals. changes, and not just an environmental made towards our target on methane avoidance of air pollution. Those rules For example, the judge found signifi- assessment, the judge wrote. intensity, we have come together to include a prohibition of methane flaring cant inconsistencies in what BLM consid- reduce by 2025 the collective average or venting, other than in small volumes ered to be waste from oil and gas opera- Oil and Gas Climate Initiative carbon intensity of our aggregated for specific allowed purposes. tions, with inconsistencies both within the Meanwhile on July 16 the Oil and Gas upstream oil and gas emissions,” the con- new rule and between the rule and other Climate Initiative, a consortium of oil and sortium said. “Together we are increasing Numerous problems BLM regulations. The judge also ques- gas companies supporting reduced the speed, scale, and impact of our actions In upholding the appeals against tioned the manner in which BLM had methane and carbon dioxide emissions, to address climate change, as the world BLM’s 2018 rule, rolling back much of considered the costs of compliance with including several oil majors, announced aims for net zero emissions as early as the 2016 rule, the District Court cited the regulations, and the agency’s argu- new targets for reducing the carbon inten- possible.” numerous problems that, the court said, ment that in the 2016 rule it had exceeded sity of their operations. Emissions targets —ALAN BAILEY emanated from BLM’s failure to provide its own statutory authority. take into account methane and carbon an adequately reasoned explanation for “While the executive branch holds the dioxide emissions from upstream oil and changing a rule that had been issued just power to issue executive orders, an gas exploration and production activities,

® continued from page 10 AIRMOBILE ALASKA Airmobile Ins-A-Wash WELL CLEANUP “Attempted but Ne v er Du plicated” Our for the pipeline. POWERLINE MAINTENANCE “We are proud of the relationship we Methods... have built with Trans Mountain,” Morin – AVOID DE-ENERGIZING THE LINES said, adding it laid the groundwork for “eventual aboriginal ownership of the – HELP PREVENT POWER FAILURES pipeline.” A Division of EGLI AIR HAUL INC. He made his forecast of an expanded 907-246-3554 WE PERFORM Enoch Cree role earlier in July while Cell: 907-469-0443 • Airmobile Ins-A-Wash attending an announcement by Alberta • Close Visual Inspection Premier Jason Kenney on aboriginal par- • Infra-Red Inspection ticipation in a Site Rehabilitation Program, SRP, which includes C$1 billion commit- – LONGEST REACH ments by both the Alberta and Canadian SPRAY BOOM governments to start cleaning up and reha- – HIGHEST WATER bilitating property at 91,000 inactive wells. PRESSURE – BEST POWER Some sites date back to 1950s WASH CAPABILITY Morin said remediation work on sites that were abandoned as far back as the 1950s could not happen without the pro- gram, describing the undertaking as “unprecedented collaboration” by govern- ment, First Nations and industry. The effort will be led by Backwoods Email: [email protected] www.egliair.com Energy Services (owned by the Alexis Nakota Sioux Nation) and Western Petroleum Management (also an Indigenous-owned company). They have WE NEED YOUR HELLP gained approval to tackle 55 and 257 sites respectively under the SRP, which will release funding in increments of C$100 million. Kenney said he is confident “we will see many more Indigenous companies and employees getting back to work and many JOIN THE COALITION more sites getting cleaned up across Alberta,” all stemming from his govern- THE OIL TAXA ment’s creation last year of the Alberta Indigenous Opportunities Corp. BALLOT MEASURE Indigenous Relations Minister Rick Wilson said the aboriginal participation in • BAD FOR JOBS energy projects is “a game changer for

Indigenous businesses and communities” whose response to the program has been • PUTS ALASKA’S ECONOMY AT RIISK “overwhelmingly positive” which could result in the establishment of “economic powerhouses.” Alberta Energy Minister Sonya Savage said C$69 million in contracts has so far been distributed among 140 companies through the SRP which is expected to cre- ate 5,300 jobs. l Learn more at OneALASKA.com

This communication was paid for by OneALASKA - Vote No on 1, Anchorage, AK. Chantal Walsh, chair, approved this message. ToTop three contrributors are BP Alaska, Anchorage, Alaska, ConocoPhillips Alaska, Anchorage, Alaska, and ExxonMobil, Anchorage, Alaska. 12 PETROLEUM NEWS • WEEK OF JULY 26, 2020 continued from page 1 PANTA HEON RESOURCES PLC PANTHEON WELL WĂŶƚŚĞŽŶ͛ƐĐƌĞĂŐĞ ŽŶ ƚŚĞ EŽƌƚŚ ^ůŽƉĞ ʹ Regional Context the Dalton Highway and trans-Alaska oil pipeline which “could expedite low cost Caelus Energy1 Pantheon Leases, pre-Dec 2019 ‡ MaMajajority of the large Smmith Smith Bay ± 2016 Discovery Pantheon Leases, Dec 2019 Lease Sale global conventitional oil early production,” Galvin said. Baay 2.4 bnbbls recoverable 10 Miles discovered onshore in “Pantheon is speaking to a number of Expected production >200 kbopd the past 3 years have been made in Alaskaka parties about partnering to jointly exploit and develop both of these projects,” he said. Oil Search/Repsol/Armstrong2 ‡ Includes several recentt,, Pantheon owns 89.2% of the Talitha Brookian Nanushuk ± 2015 Discovery multi-billion barrel Contingent resources 907 mmbls discoveries made by Expected 22024 production 120 kboppd project and 100% of the Alkaid project. Northstar idindeeppendtdent operraators Hoorseshoe/Pikka Ooogruk Milnen Talitha offsets old ARCO well Pointn Pointn MacIntyre 3 Cassin Enndicott ConocoPhillips Kuparuk Prudhoh e Bay The Talitha project contains “three Alppinen Pointn Thoh mpson Willow ± 2016 Discovery 14 BB OIP 32 BB OIP 400-750 mmbbls recoverable mutually exclusive and independent geo- Tarna Badami logical formations with different reservoir Expected 2026 production 100 kbopd Willow NPPRA >2000MM OIP trap geometries, qualities and risk profiles,” Public Leonis

Galvin said. All of which were penetrated Meltwater and confirmed to be oil bearing in the >100MM OIP Greater Alkaid Theta Pipeline State No. 1 well drilled by ARCO, West ANWR Talitha Wese t Kaavik predecessor to ConocoPhillips, in 1988, Proprieti ary 3D Seismic which the new Talitha 1 well will offset. 1. http://caelusenergy.com/wp-content/uploads/2016/09/CCaelus_Energy_Overview_Fact_Sheet_Our_Future.pdf 2. https://www.adn.com/energy/y article/armstrong-repsol-announce-deal-shifting-ownershipp-shares-colville- Trana s-Alaska project/2015/10/13/ (reference to D&M report) Charlil e 1 In late March, Pantheon announced that 3. http://alaska.conocophillips.com/newsroom/Documentss/NR-AK-Willow%20Discovery.FINAL.pdf Pipep linen it had completed its analysis of the shallow- 5 est of these three horizons, the “Shelf Margin Deltaic,” a Brookian aged reservoir, Environmental Conservation said in an three are plugged and abandoned (Alcor 1, Brookian light oil discovery just west of the which it estimated to contain 1.8 billion bar- April 17 public notice that the company’s Merak 1 and Winx 1) and one well, Alkaid Dalton Highway. The company also said it rels of oil in place with a P50 technically existing plan addresses year-round explo- 1, is suspended. viewed the nearby Phecda prospect as an recoverable resource of 483 million barrels ration drilling from sites approved for all In actuality, Winx 1 was drilled by 88 appraisal well for the Alkaid discovery, of oil, which were “significantly higher” season drilling and winter-only exploration Energy subsidiary Accumulate Energy rather than a standalone well. than pre-analysis expectation, Galvin said. drilling from ice pads connected to North Alaska, although permitting was submitted The two deeper zones at Talitha, the Slope infrastructure via the Dalton under Great Bear’s name. Aggressive bidding at lease sale Brookian Slope Fan System and the Highway and ice roads. The Alcor and Merak wells were drilled The state of Alaska drew 56 bids on 56 Kuparuk “also offer significant potential,” The major amendment the company tracts in the North Slope areawide sale Dec. with the company due to complete its analy- in 2012, Alkaid was drilled in 2015 and re- 11, with Great Bear taking 17 tracts on sis of the Kuparuk and provide resource submitted would add two new locations to entered and flow tested in 2019; Winx was 27,840 acres for $849,094. The company estimates “in the near future,” he said. the plan — the Alkaid and Phecda road drilled in 2019. pads, as well as updating maps and figures In its DEC application Pantheon said the was second only to Oil Search in the num- Two new pads along Dalton and response planning standards to increase pads would be constructed of timber rig ber of tracts it won. oil storage tank capacity from 400 barrels to “The new leases are strategically posi- The April 26 issue of Petroleum News mats, “in some cases supplemented with 600 barrels and to increase the summer tioned in two areas contiguous or adjacent reported that Pantheon (in Great Bear’s existing gravel pads.” The pads would be to our current acreage on our northern and name) had begun permitting for two pads drilling response planning standards from 400 by 400 feet and would support all sea- southwestern boundaries,” Pantheon said in along the Dalton Highway, as well as filed a 1,000 barrels per day to 5,500 bpd for 15 son drilling. a Dec. 12 statement, noting it had a compet- major amendment application for its oil dis- days, totaling 82,500 barrels. The suspended Alkaid well is some two itive advantage given it “owns the propri- charge prevention and contingency plan. There is no date given for pad construc- and a half miles west of the Dalton etary 3D seismic which covers the leases,” The oil discharge prevention and contin- tion. Highway and northwest of the Phecda Road and had technical work completed in recent gency plan was approved under the Great Pad site. That well was drilled from an ice months. l Bear Petroleum Operating name in early Four wells drilled to date pad. 2017. Pantheon/Great Bear has drilled four Pantheon said after the well was flow The Alaska Department of wells off the Dalton highway to date — tested in 2019 that it confirmed a new continued from page 1 509,837 bpd in February, 502,250 bpd in By May, the ANS average price was 129,353 bpd in March, to 121,933 bpd in March, 490,252 bpd in April, 427,676 bpd $28.21 per barrel and by June it was at April, 89,150 bpd in May and 66,282 bpd in CRUDE VOLUMES in May and 393,387 bpd in June. $41.78, still well below recent prices. In June, before climbing again in July to an 2019 the lowest monthly average was The Alyeska prorations affected all pro- average, as of July 20, of 128,026 bpd. Price drop $60.40 per barrel in January of that year; in ducers, with a 10% cut, estimated at 50,000 The division reports the Colville River The ConocoPhillips production cut was 2018 the lowest per barrel price was $66.20 bpd, beginning April 24, increased to 15% unit as Alpine and its satellites, and produc- a reaction to the drop in demand due to per barrel in February of that year. on May 8, reduced to 5% on May 15 and tion there went from 59,320 bpd in January COVID-19 and the resulting steep drop in ConocoPhillips said its Alaska cuts lifted May 22. Alyeska prorates production to 55,716 bpd in April, 41,539 bpd in May oil prices. would come from the Kuparuk River and and 21,815 bpd in June, before rebounding to in reaction to inventory volumes at the Colville River units, and the drop in produc- The ANS West Coast average spot price an average of 51,358 per day as of July 20. Valdez Marine Terminal, market conditions by month, as posted by the Tax Division, tion in those areas was evident — even and tanker scheduling. bottomed this April at $16.54 per barrel, though the Tax Division merges Kuparuk —KRISTEN NELSON ANS average volumes fell steadily dropping from $65.48 in January to $54.48 production with Nikaitchuq and Oooguruk through the first part of the year, averaging in February and $33.21 in March. — with Kuparuk going from an average of Catering To All Your North Slope Needs

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