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Oil giant cuts back exploration

Posted: Thursday, January 30, 2003

ANCHORAGE (AP) -- ConocoPhillips Alaska Inc. plans to drill fewer exploration wells this year. But exploration spending will be on par with that of recent years because this year's wells tend to be in remote areas, pushing up costs

Four to six exploratory wells are planned, a drop from the nine or 10 the company has averaged in the past few years, company president Kevin Meyers said Monday.

Speaking at an Anchorage Chamber of Commerce luncheon, Meyers suggested that the bigger risk of exploring far from existing oil fields is balanced by hopes of bigger than average discoveries.

ConocoPhillips is the state's top oil producer and has historically been the most aggressive explorer. Meyers said the company drilled 31 exploratory wells over the past three years, more than all other companies combined.

Capital spending for oil and gas exploration and other projects in Alaska is expected to total $640 million this year, comparable to what the company spent in 2002, Meyers said.

Among the exploratory wells planned this year:

The Hansen well, on the Kenai Peninsula just north of Anchor Point. The well will be drilled from land to the offshore Cosmopolitan prospect in Cook Inlet. ConocoPhillips drilled an initial hole there last year.

The Puviaq well in the National Petroleum Reserve-Alaska, far west of producing North Slope fields.

The Oberon well, roughly between the Alpine field and the huge Kuparuk field.

The McCovey well, being drilled offshore of Prudhoe Bay with partners EnCana and Chevron Texaco.

Most of this year's exploration wells won't be drilled until late winter, when ice roads are completed, said ConocoPhillips spokesperson Dawn Patience.

Meyers also said the company is pushing hard on new techniques to develop the West Sak field, which has billions of barrels of thick oil in shallow, sandy rock above the Kuparuk field.

He outlined a new horizontal drilling technique, called the horizontal undulating injector, that snakes through the rock formation and floods it with water to drive out oil.

Mark Myers, director of the state Division of Oil and Gas, said he knows of firm plans for only five more exploration wells by other companies this year. Three of those are to be drilled by partners Pioneer Natural Resources Canada Inc. and Armstrong Oil & Gas Inc. from ice islands at the Thetis prospect northwest of Kuparuk.

Anadarko plans a gas exploration well south of Kuparuk, Myers said.

Overall, exploratory drilling activity looks to be low this year, Myers said. In 2002, 15 wells were drilled between the North Slope and Cook Inlet, he said, and in 1969, just after the huge Prudhoe Bay strike, more than 45 wells were drilled.



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