Ben Schoffman, Operations Superintendent for Marathon Oil discusses gas issues with Assembly president Gary Superman and Milt Allen of Udelhoven Oil Field System Services at a recent Alliance meeting in Kenai.
Marathon Oil Company has more than half a century of experience finding and producing oil and gas in the Cook Inlet Basin. While looking for oil in 1959, Marathon discovered the Kenai Gas Field, the largest natural gas field ever discovered in Cook Inlet which has produced over 2 trillion cubic feet of natural gas. Ben Schoffman, Operations Superintendent for Marathon, recently addressed a capacity crowd the Kenai Chapter of the Alliance monthly luncheon meeting at the Paradisos restaurant in Kenai. According to Schoffman it was between 1986 and 1998 that Marathon decided to focus more on looking for natural gas reserves on shore on the Kenai Peninsula. Marathon had their first major new discovery in 1998 at Wolf Lake. To meet their new drilling demands, Marathon commissioned the Glacier drilling rig, a new fit for purpose high tech drilling rig. In 2002 with their partner Unocal, Marathon announced a new gas discovery in Ninilchik and in 2003 installed the new Kenai/Kachemak pipeline to bring that gas to market. Last year Marathon continued their string of successes with finds in Kasilof and Sterling.
"Our primary goal is to profitably produce and sell gas here in the Cook Inlet and do so in a safe and environmentally responsible manner. We are focused heavily on gas production, we only have two oil wells here in the Cook Inlet area, and are committed to selling gas to all available markets," Schoffman. In spite of the Marathon's successes over the last 50 years, Schoffman says that Alaska is becoming a more remote place to do business than it was in the past, "The Cook Inlet service industry is challenged and even distressed. The qualified labor pool is declining or exiting the market and material production and fabrication is more dependent on outside sources than it was 10 to 20 years ago. Alaska therefore is becoming more remote rather than less despite the fact that we have more people living in the State, and that makes doing business even more challenging especially if you want to become busier rather than less busy," said Schoffman.
One of the other major challenges Schoffman pointed out is Alaska's pipeline regulatory and permitting environment, "The hurdles are significant, on the Kenai/Kachemak pipeline for example we don't have a final tariff today despite the fact that we have been in operation for one and half years and we started the process with the regulatory agencies three and half years ago. We are being asked to outlay the capitol investment without knowing what the return will be or even if it will be profitable, that is a huge disincentive for pipeline investment," added Schoffman.
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