Years of oil, gas activity still left

BP: Next year will determine state's future

Posted: Tuesday, June 28, 2005

ANCHORAGE — There are at least 50 years ahead of the oil and gas industry in Alaska, according Steve Marshall, president of BP Exploration (Alaska) Inc. But the next year in Alaska will be enormously influential in deciding the future of resource development in Alaska, he said.

The comment came at an Anchorage Chamber of Commerce luncheon Monday, featuring the Alaska Oil and Gas Association, or AOGA, Alaska oil and gas industry leaders and Gov. Frank Murkowski speaking about decisions that will change Alaska's future.

"We still see Alaska as having world scale opportunities," Marshall said.

BP, working with ConocoPhillips and Exxon Mobile Corp. are one of three groups who have a proposed pipeline project to bring North Slope natural gas to market. They currently are in negotiations with the state of Alaska to develop a contract to build a pipeline from Chicago to the North Slope.

Murkowski has said he hopes to have a contract to present to the Legislature this fall.

He also said there will be a major announcement soon on a new "major player" coming to the Alaska oil and gas industry.

Marshall said the last couple of years the market for natural gas has been "robust enough," making it worthwhile to market North Slope natural gas.

Other speakers at the luncheon were Judy Brady, executive director of AOGA, Mur-kowski, Ken Sheffield, president of Pioneer Natural Resources Alaska Inc., Gregg Nady, with Shell Offshore Inc., Jim Bowles, president of ConocoPhillips Alaska, and John Barnes, Alaska asset team manager for Marathon Oil Co.

"Fiscal stability is what gives us the confidence to invest," Marshall said.

Murkowski said his administration has worked hard to give fiscal and regulatory stability to the producers.

Barnes, of Marathon, said his company has focused on natural gas exploration in Cook Inlet and has increased Alaska's natural gas reserves. One of the major decisions the state faces will be whether to build a spur pipeline to the inlet, he said.

The Alaska Natural Gas Development Authority, or ANGDA, is working on a project to build a pipeline that will branch off of one of the proposed main gas pipelines.

Barnes said that North Slope natural gas delivered to the inlet could have an impact on exploration in the region.

"Whatever that delivered price is, you're going to have to compete against it," he said in an interview after the luncheon. "It's just another factor out there."

Another concern for Cook Inlet producers is the lack of support industry in the area, Barnes said.

If a large North Slope natural gas pipeline is built, he said that could have positive or negative effects on the availability of support services in the inlet. It could draw support services away from the inlet or bring new technologies to the state, he said.

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