McArthur River Field supplying highest production rate in area's history

Cook Inlet platform strikes gusher

Posted: Thursday, July 26, 2001

Unocal announced two new strikes off its King Salmon Platform in Cook Inlet Wednesday.

Pumping 7,100 barrels of oil per day out of the McArthur River Field, the K-13 well has the highest production rate of any well in inlet history, according to company spokesperson Roxanne Sinz in Anchorage.

"It peaked on July 3 at 8,552 (barrels of oil per day)," she said. "At first, they come in really big and have to settle down a little bit."

The find has pushed production from the King Salmon Platform, built in the late 1960s, to its highest level in almost 20 years. The well confirmed a pocket of oil in the Hemlock area on the northern flank of the McArthur River Field that could contain more than 35 million barrels of oil, the company said.

Charles Pierce, vice president for Unocal Alaska, said the find was brought about by "the use of advanced drilling and analytical technologies," and the investment of $18 million in the King Salmon Platform.

"Part of it also has been a recent refocus on Cook Inlet oil," Sinz said. "Our capital budget doubled this year and we used modern technologies. That all helped us have good results."

The new production will travel by pipeline to Trading Bay on the west side, where it will be mingled with oil from other wells and then shipped to the Tesoro refinery in Nikiski.

"We think it's great news," said Tesoro manager Rod Cason. "Cook Inlet is right here in our back yard, and environmentally, it's the right thing to do not to have ships carrying it out of the Gulf of Alaska," he added. "We can process and upgrade it to a finished product and it's sold right here."

He said the added inlet oil probably won't be reflected in prices at the gas pump, since the price of crude is tied to prices of North Slope crude, West Texas intermediate or a combination of those and other indices.

"The biggest savings to Tesoro and Unocal will be transportation costs.

"We can bring that directly to our facility," Cason said.

The Tesoro refinery currently processes 55,000 barrels of oil a day, but is capable of handling 72,000 barrels.

"It won't have an impact on us importing oil, since we have to keep the refinery full," Cason said.

He said a Forest Oil strike that may be on line in the first quarter of the new year may be capable of producing 20,000 barrels a day, pushing total Cook Inlet crude production to 50,000 barrels a day.

He said another benefit of using Cook Inlet crude is its low sulfur content, meaning it's cleaner than oil from the North Slope.

"We're very excited about this," Cason said. "We hope the community and government continues to give support for exploration, because it's good for the economy."

Unocal also announced a strike from the K-1 well, also on the King Salmon Platform, which is producing 1,100 barrels of oil a day from what is called the "G" zone in the McArthur River Field. Unocal shares working interest in the two fields with Forest Oil.



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