Voice of The (Anchorage) Times on small oil fields:

Posted: Monday, December 18, 2000

Some parts of Alaska's economic picture remain unclear, especially what will happen to ANWR, but the pieces that are coming into focus are attractive indeed. The major oil companies active on the North Slope have launched aggressive exploration programs this winter and are predicting production increases for the future.

Kevin Meyers, president of Phillips Alaska Inc., recently predicted that his company's oil production would increase from about 355,000 barrels a day this year to 450,000 by 2010.

Meyers and his team met the promise that his company's Alaska production would have ''no decline after '99.'' And earlier this year BP Exploration (Alaska) Inc. predicted that its production would increase from 300,000 barrels a day this year to 350,000 within five years.

Such increases appear modest, and hopefully the actual results will be even higher, but they represent an important turning point for Alaska's oil patch and its vital economy. Without the relatively small oil fields now being brought on-line and others hopefully to be found, Alaska's oil production would be decreasing. We would be facing the end of the oil era instead of the beginning of a new one.

High energy prices are helping fuel new drilling ventures, but energy prices tend to rise and fall on a regular basis. A more important consideration is that the physical infrastructure is in place on the North Slope and past ventures have led to new technology and expertise.

These factors together make for an important change in drilling and production economics. North Slope operators now can tap fields that would have been far too small to consider just a few years ago. That development is critically important to Alaska's future since small satellite fields often are found near the elephant fields like Prudhoe Bay.

They also offer hope for bringing oil from the huge field called West Sak to market. That field has technical problems related to the temperature and thickness of the oil, as well as the deep rock structure in which it rests. If those problems can be overcome, West Sak production could become a reality.

Small and difficult fields aren't likely to bring a tax or royalty bonanza to the state. But putting enough of them on-line can provide a steady source of jobs and state revenues. Elephant fields have played a major role in Alaska's past and could again, but in the meantime those small fields can make all the difference.

And with the near-term prospect of a gas pipeline from the North Slope to the U.S. Midwest, Alaska's future



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