Conoco Phillips finds un­tapped Alaskan oil vein

Cono­coPhillips’ dis­cov­ery could hold 300 mil­lion bar­rels

Houston Chronicle - - FRONT PAGE - By Collin Eaton

In a new sign of an in­dus­try turn­around, Conoco Phillips dis­cov­ers a $16 bil­lion vein of oil es­ti­mated to hold 300 mil­lion bar­rels deep in the Alaskan tun­dra.

Cono­coPhillips has dis­cov­ered a $16 bil­lion oil vein buried deep in the Alaskan tun­dra, one among a hand­ful of large dis­cov­er­ies made since the oil bust be­gan.

This new pocket of oil, es­ti­mated to hold 300 mil­lion bar­rels about 90 miles west of the pro­lific Prud­hoe Bay oil field, could be­come the site of a new multi­bil­lion-dol­lar project for the Hous­ton driller, one that would take more than half a decade to com­plete.

It’s not yet clear if Cono­coPhillips’ find, larger than all but three dis­cov­er­ies made in 2016, and an­other by Exxon Mo­bil Corp. this week are de­fin­i­tive signs of an in­dus­try turn­around af­ter the worst year for oil dis­cov­er­ies in more than six decades.

But with oil prices and in­dus­try spend­ing on the rise, it’s pos­si­ble that drillers have seen the worst of the ex­plo­ration slump.

“They’re get­ting bet­ter at drilling wells, and they’re do­ing more with their re­stricted bud­gets,” said Julie Wil­son, an an­a­lyst at en­ergy re­search firm Wood Mackenzie in Hous­ton. “We do think 2016 will come to be seen as the low point.”

Cono­coPhillips found the oil in the north­east part of Alaska’s fed­er­ally owned 37,000-squaremile Na­tional Petroleum Re­serve, where it drilled two ex­plo­ration wells early last year.

The com­pany’s ini­tial tests show the so-called Wil­low dis­cov­ery may be able to pro­duce 100,000 bar­rels a day. It plans to be­gin 3-D seis­mic sur­veys in the

re­gion this month.

The Wil­low dis­cov­ery comes on the heels of Exxon Mo­bil’s se­cond large find off Guyana, also an­nounced this week. Wood Mackenzie be­lieves this dis­cov­ery could pro­duce 150,000 bar­rels of oil a day and turn the Latin Amer­i­can coun­try into a “se­ri­ous” player on the world’s en­ergy stage.

Cono­coPhillips’ find also comes 11 months af­ter Caelus En­ergy dis­cov­ered 6 bil­lion bar­rels of oil in place at Alaska’s Smith Bay, the largest dis­cov­ery out­side of the U.S. in 2016.

“Alaska is mak­ing head­lines now,” Wil­son said. “It shows you how un­ex­plored the whole prov­ince is.”

Cono­coPhillips be­lieves it could be­gin pump­ing com­mer­cial quan­ti­ties of crude from the Wil­low dis­cov­ery as early as 2023. It noted the ex­plo­ration re­gion is rel­a­tively close to ex­ist­ing in­fra­struc­ture, in­clud­ing a pipe­line that crosses the state and a pro­duc­tion fa­cil­ity, mak­ing it a cheaper project.

Joe Marushack, pres­i­dent of Cono­coPhillips Alaska, said the Wil­low dis­cov­ery could take bil­lions of dol­lars to de­velop and could gen­er­ate thou­sands of Alaskan jobs dur­ing the con­struc­tion of pro­duc­tion fa­cil­i­ties. It could also gen­er­ate hefty state rev­enues for Alaska, which leans heav­ily on oil rev­enues.

The Wood­lands-based oil ex­plorer Anadarko Petroleum Corp. has a 22 per­cent stake in the dis­cov­ery, while Cono­coPhillips owns the other 78 per­cent.

The two com­pa­nies ac­quired more than 594,900 acres on the west­ern North Slope of Alaska, to fur­ther ex­plore the re­gion.

Hous­ton Chron­i­cle file

Two Cono­coPhillips con­trol room op­er­a­tors in Alaska work in the Alpine oil field main pro­cess­ing cen­ter in 2007. A new pocket of oil, es­ti­mated to hold 300 mil­lion bar­rels, has been found 90 miles west of Alaska’s Prud­hoe Bay field.

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