Friends of the Boys and Girls Club of the Kenai Peninsula crowded into Paradisos restaurant Thursday afternoon for the annual Friends Luncheon fund-raiser and to hear from Phillips Alaska Inc. president Kevin Meyers, the keynote speaker.
Unfortunately, Meyers, who was asked to speak at the lunch by Boys and Girls Club board member Mike Navarre, had to stay in Washington, D.C., at the request of Alaska Sen. Frank Murkowski. He was there to discuss bringing Alaska natural gas to Lower 48 markets.
"It's a rule of politics that a sitting United States senator trumps a former mayor," Navarre said.
Speaking in Meyer's stead was Phillips vice-president Joe Leone, who is in charge of the company's greater Kuparuk and Cook Inlet areas.
"I am a substitute, but I brought prizes," Leone said, brandishing a stack of Phillips 66 baseball caps. "Kevin wouldn't have brought prizes."
He tossed the caps into the crowd every time someone answered a quiz question. It didn't take long for the audience to figure out that the answer to every question was "Phillips."
Through the "quiz," Leone pointed out that Phillips was the first company to be granted an oil exploration lease in the state, is the largest producer of oil and gas in Alaska, the number one exporter of petroleum and the owner of the most state and federal oil and gas leases.
Much of Phillips' size in the state came with last year's acquisition of Arco's Alaska assets, after Atlantic Richfield Company was bought by British Petroleum.
"Phillips shares the same corporate values as Arco," Leone said. "We have the same zeal to protect the environment and to Alaska buy-and-build."
Leone said Phillips plans to spend $750 million in the state, which includes $150 million on three new oil tankers. He also explained how Phillips has partnered with other companies to create independent companies to handle distribution and other functions, allowing Phillips to concentrate on exploration.
"The idea behind change is to be competitive in all ends of the business," Leone said.
He said the company drilled nine test holes last winter and hopes to drill 13 or 14 this winter. Phillips oil output this year will be level with last year's, he said, but will go up next year, when the Alpine oil field comes on line.
"If you need any reason why exploration is important, the Alpine field will produce 80,000 barrels a day and will mean $1 billion in royalties and taxes to the state of Alaska," Leone said.
He also talked of using new technology in recovering more oil from low-producing wells such as the West Sak field on the North Slope. With "multilateral production wells," Leone said, West Sak is now producing more than twice the 4,000 barrels a day it had been producing.
"The reason this is important, is that there is a lot of oil in the ground," he said. "But it's real thick, gooey, syrupy kind of stuff."
He said the reserves in West Sak are as voluminous as the Alpine field.
Leone said Phillips is "very enthusiastic" about shipping North Slope natural gas to the Lower 48 via pipeline.
"But we don't believe a Lower 48 line excludes other options," he said.
Those other options include bringing the natural gas line to Nikiski.
"I hope everything I've said here today has convinced you that Phillips is here to stay," Leone said.
He noted that Arco donated $2.9 million to charities in the state last year, and how Phillips will increase that to $3.5 million this year.
"Let me be the first to hand over my check to Mike," he said, offering Navarre an oversized check for $10,000.
"We all know how important the Boys and Girls Club is to keeping kids off the streets and off of drugs," Leone said. "It frees them to become the community leaders of tomorrow."
At the end of the speech, Navarre reminded the patrons that while the lunch was free, a generous donation would be appreciated at the door as they left.
"When all is said and done, I'm sure this will be the most successful Friends Luncheon ever," Navarre said. "The Boys and Girls Club is something I'm proud to be a part of."
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