Conoco Phillips finds untapped Alaskan oil vein
ConocoPhillips’ discovery could hold 300 million barrels
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.
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.