BlueCrest Energy sold its first barrel of oil from its new Cosmopolitan development last week to the Tesoro refinery in Nikiski.
Carlile Transportation Systems, a trucking and logistics company that provides oilfield support, transported the first oil produced by the facility on Thursday to Tesoro’s refinery.
The company expects to drive two tankers a day from the Cosmopolitan site near Anchor Point to the refinery each day, according to a press release from Carlile.
Tesoro Kenai Refinery Vice President Cameron Hunt said in the press release that Tesoro was encouraged by the sale.
“The continued exploration and development of both oil and natural gas in the Cook Inlet basin is important for the long-term viability of our local refinery as well as the economic well-being of the Kenai Peninsula,” Hunt said in the press release.
The facility is only producing from one well at the moment, an exploratory well drilled by ConocoPhillips and Pioneer, said BlueCrest President and CEO J. Benjamin Johnson in an email. The company is gradually bringing all the components of the production facility online, he said.
The oil production will likely gradually increase as the new wells the company plans to drill come online, he said.
“We will have our large new onshore drilling rig in place and begin drilling new wells in July,” Johnson said. “Those new wells (each of which will take 3–5 months to drill) will likely not begin to produce until close to the end of 2016 or early 2017.
Carlile Vice President of Oil and Gas Tom Hendrix said in the press release that BlueCrest’s initial success could be jeopardized if Cook Inlet tax credits undergo changes that may limit development by smaller companies. The Legislature is debating a number of bills that would change the oil and gas tax credit structure, ranging from placing caps to minor tweaks over time to completely cutting the Cook Inlet oil and gas tax credits by 2018. No decision has been made yet.
“Alaska’s economic strength and growth is directly tied to a strong, vital natural resource industry, which provides jobs for a diverse workforce and a range of important business development opportunities throughout the state for companies such as Carlile,” Hendrix said in the press release.
Tesoro’s Nikiski refinery is in the midst of its spring turnaround, a process done about once every four years. Most of the equipment at the refinery will be inspected and replaced, fixed or updated. Between 800 and 850 people are involved with the turnaround, but many of them are refinery employees or other locals, Hunt said in an interview.
“We do use a lot of local contractors,” Hunt said.
The refinery is still able to handle the oil that BlueCrest is producing during the turnaround, Hunt said. He said he could not say how long the turnaround process will take, though the company does know a definitive length for the process.
During a joint Kenai and Soldotna chambers of commerce luncheon in Feburary, Hunt said the process could take between six and 10 weeks to complete.
Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.
