Conoco returns to North Slope

Posted: Wednesday, May 22, 2002

ANCHORAGE (AP) -- Conoco Inc. is once again a leaseholder on the North Slope, nearly a decade after leaving Alaska.

The company, awaiting Federal Trade Commission approval for a merger with Phillips Petroleum Co., acquired eight North Slope leases through its $6.5 billion purchase of Gulf Canada Resources Ltd. last summer. Plans for North Slope development are on hold while the merger is pending.

Gulf Canada was one of four companies that controlled the Mackenzie Delta's 5.8 trillion cubic feet of natural gas reserves and was interested in building a gasline from the delta to Alberta and Lower 48 markets.

Conoco, which developed the Milne Point field, pulled out of the state in early 1994 after suing the trans-Alaska pipeline owners for their tariff policies.

The eight tracts were acquired by a Canadian bidder at the state's North Slope lease sale in November, according to Petroleum News Alaska. The bidder -- identified as 3793885 Canada Ltd. -- was established by Calgary-based independent Crestar Energy Inc., which had just been acquired by Gulf Canada the month before.

The acquisition put Gulf Canada among the top five independent Canadian producers and the top 10 independent North American producers.

Three of the eight leases are south of Prudhoe Bay. According to the Alaska Division of Oil and Gas, Unocal Corp. was assigned a 50 percent ownership interest in those leases after the sale.

The assignment was approved in was effective March 1.

Kevin Tabler, Unocal Alaska's manager of land and government affairs, said Unocal is the designated operator for the three leases but has no immediate plans to explore or develop the three leases at this point.

The leases will be about 50-50 owned by Conoco-Phillips and Unocal once the Conoco-Phillips merger is complete, Tabler said.

The other leases involve five tracts west of the National Petroleum Reserve-Alaska.

Conoco Canada spokesman Peter Hunt said plans for the five leases held 100 percent by Conoco are on hold until after the company's anticipated merger with Phillips.

''We can't even hold hands before we get married,'' he said of the federal rules that dictate no communication between the two companies prior to approval of the merger by the Federal Trade Commission, which is expected the second half of this year.

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