Posted on 08/24/2005 7:49:42 AM PDT by thackney
After leaving the state in 1998, the company has returned and hopes to join BP, ConocoPhillips and ExxonMobil as a major player in Alaska.
Shell this year made its intentions clear by spending more than $44 million for 84 offshore leases in the Beaufort Sea. Company officials say that is just the beginning.
"Alaska is a great and vast land. It is for people who think big ... and that's what we're doing," said Chandler Wilhelm, the company's Alaska Exploration manager, at an open house Tuesday at Shell's new offices in midtown Anchorage.
...
Annell Bay, Shell's regional vice president for Exploration in the Americas, said the company is committed to growing globally. Shell is back in Alaska because of its large resource potential, she said.
"We are really excited about the potential for Alaska," Bay said. "We intend to be here for the long run."
After more than 30 years in Alaska, Shell sold its Cook Inlet oil and gas assets in 1998. The company, known as Shell Oil Co., got its start in Alaska in the 1950s with investments in Southeast Alaska and the Alaska Peninsula.
The Minerals Management Service estimates that about 7 billion barrels of oil and 32 trillion cubic feet of gas can be recovered from under the Beaufort Sea along Alaska's northern Arctic coastline.
Shell purchased the Beaufort Sea offshore leases in March based on the company's geological analysis, as well as offshore experience gained at Russia's Sakhalin Island, where the company is embarking on a $20 billion oil and gas project, Wilhelm said.
Drilling in the Beaufort Sea would begin no sooner than 2007, he said.
"We think there is some potential for some significant oil fields," he said.
(Excerpt) Read more at adn.com ...
ping
It seems like we are giving up these leases for nothing, considering what they stand to gain in return. And since Shell is not an American company (Am I wrong?) can anyone forsee the scenario where they pull a Venezuala and decide not to sell to us? (Yes, I have heard the fungiblility of oil, but Chavez is a loon)
I do not see any difference between them and BP who has been there for a long time. They sell oil like everyone else; it has to move through the pipeline to Valdez.
Between 1996-1999 5.5% of North Slope oil was exported to Asian countries. These exports were overwhelmingly supported by the US Congress and by the Clinton Administration to offset an oil glut in California at the time. In June 2000 Alaskan oil again ceased to be exported, and 100% of North Slope production has stayed in America. Before 1995 100% of North Slope oil went to US Markets.
Do not forget 12.5% royalty, taxes and jobs we gain instead of the company investing these dollars elsewhere in the world and those dollars going to Russia or the Middle East.
Shell has the money to make the investments. Interesting that Shell's return to Alaska would be of interest to FR.
I see people on FR claiming oil companies are not investing in exploration. From where I sit, I see a lot of investing going on.
Shell has about $20 billion to play with. It's great they have decided to play in the third friendliest business market in the US.
Another coming to play in our yard.
Eni enters Alaska
Houston affiliate of Italian mega-major buys Armstrong’s North Slope assets
Kay Cashman
Petroleum News Executive Editor
Eni Petroleum Exploration Co. has purchased the assets of Armstrong Alaska, which include 104 oil and gas leases on the North Slope where Eni said “reserves are expected to exceed 170 million barrels.” The leases encompass 341,500 gross (273,000 net) acres onshore and offshore in state and federal waters (see map). As part of the deal Eni will inherit Armstrong’s minority working interests with Pioneer Natural Resources and Kerr-McGee in northern Alaska, including the proposed Oooguruk and Nikaitchuq developments (see related article below).
An affiliate of Italy’s Eni SpA, Houston-based Eni Petroleum told Petroleum News Aug. 26 that it considers the “North Slope and Beaufort Sea as areas with exploration potential for new finds” and said Eni has “decided to establish a position in the area with an emphasis of consistent growth.”
When asked if it is looking for other oil and gas properties in Alaska — and anything outside of northern Alaska — the company said it is “always looking for opportunities to further enhance its competitive presence in the areas where it operates. Alaska is no exception and Eni will consider all opportunities available, and continue to invest in regional studies to assess the potential of new areas, with special attention to the Beaufort and Chukchi sea areas.”
In response to written questions from Petroleum News, Eni wrote that it is “evaluating” whether or not to set up an office in Alaska. The company has not yet selected a person to oversee its Alaska assets, but said if an Alaska coordinator is named that person would report to Eni Petroleum’s Houston office which “manages E&P operations in (the) Gulf of Mexico and will also manage the operations in Alaska.”
Although Armstrong was the first company to cut a deal with Eni in Alaska, Eni made its decision to enter Alaska “based on its internal studies and evaluation, while keeping a close eye on all the available opportunities. In addition, Eni intends to leverage the experience gained from its operatorship in other challenging areas such as Kazakhstan, where there are similar requirements for high levels of technology, as well as analogous operating conditions.”
Eni’s comparison of Alaska to Kazakhstan could bode well for Alaska. Eni operates Kazakhstan’s huge Kashagan field in the Caspian Sea. Since it entered Kazakhstan in 1992 (10 months after the country’s independence from the former Soviet Union), Eni has made itself part of the new nation’s future. Among other things, Eni undertook the expense of training some of Kazakhstan’s new oil ministry employees at its headquarters in Italy and it funded the construction of the Kazakh national library.
When asked if Eni plans to be an operator in Alaska, the company said it operates in other Arctic areas, and “generally takes a leadership role in its joint ventures worldwide.”
Initially, Eni said it “intends to fully cooperate with its partners who operate some projects in the pre-development stage. It is Eni’s intention to bring its experience onboard while taking the time to understand the peculiarity and challenges of the area.” The company has not yet decided whether it will drill any of its 100 percent-owned acreage this coming winter: “It is too early to comment. This will be evaluated during our 2006 budget and planning process.”
Although Eni said it will evaluate the possibility of partnering with Shell on Shell’s planned Beaufort Sea seismic shoot for next summer, no decision will be made until Eni has completed its 2006 budget and planning process.
In Alaska, “as in all of its activities, Eni is fully committed to sustainable development and environmental protection of the areas in which it operates. In the Gulf of Mexico, Eni has received several nominations for Safety Awards from the Minerals Management Service,” the company said in its correspondence with Petroleum News.
Eni did not disclose the terms of its deal with Armstrong.
And when asked if it was looking at buying EnCana’s acreage in Alaska, Eni said no.
http://www.petroleumnews.com/pntruncate/990362616.shtml
But Armstrong is not leaving
Armstrong staying in game
Kay Cashman
Petroleum News Executive Editor
Armstrong Alaska, the small independent instrumental in bringing three new oil companies to Alaska in less than three years, has sold all of its oil and gas leases (see above story) in Alaska to the last of those three new companies, Eni Petroleum Exploration Co., but Armstrong is staying in Alaska.
“We’re definitely not leaving Alaska,” Armstrong Oil & Gas President Bill Armstrong told Petroleum News after the sale of Armstrong Alaska’s assets to Eni Petroleum, an affiliate of Italy’s Eni SpA, in mid-August. Armstrong Alaska is an affiliate of Denver-based Armstrong Oil and Gas, and Bill Armstrong is president of both companies.
“We were not capitalized enough to do the things our North Slope partners Pioneer Natural Resources and Kerr-McGee wanted to do. They’ve both been incredibly great partners for us. It was important to me not to slow them down and be a drag on development at Oooguruk and Nikaitchuq, so we sold our assets to Eni,” he said.
“Eni will be a great asset to Alaska,” he said.
Bill Armstrong says Armstrong Alaska will stay in the state and continue to put together exploration prospects.
The company, he said, will continue to focus on northern Alaska. “We still see huge opportunities on the North Slope. … It’s a great place to be and it’s a great petroleum system.
“There are certain things we’re pursuing. We’re really looking forward to continuing our relationship with all the players on the North Slope and the State of Alaska,” Armstrong said.
“There were a lot of companies interested in what we had in Alaska. I think you’ll see more companies coming to the North Slope” in the near future, he said.
Track record of success
Armstrong Alaska shouldn’t have a problem attracting partners for new prospects as its track record to date has been three out of four — i.e. in three out of four North Slope prospects drilled by its first two partners discoveries have already been announced — first at Oooguruk by Pioneer in 2003 and then by Kerr-McGee at Nikaitchuq in 2004 and again by Kerr-McGee in 2005 at Tuvaaq and nearby Kigun, a well in the Kuparuk unit that essentially confirmed the Tuvaaq discovery.
There has been no news yet from Kerr-McGee on drilling this past winter at the Two Bits prospect (also called Ataruq). The company has said it is still evaluating well results.
Pioneer and Kerr-McGee are moving toward development of Oooguruk and Nikaitchuq, respectively. If sanctioned by both companies (and their new partner Eni), Nikaitchuq is expected to come online in the first half of 2006 and Oooguruk in 2007. (Both Pioneer and Kerr-McGee have said they need royalty relief from the State of Alaska to approve their projects.)
The lead players in Armstrong’s Alaska team are Bill Armstrong, Vice President of Operations Stu Gustafson, Vice President of Geoscience Matt Furin, and Vice President of Land Ed Kerr.
The company’s philosophy in Alaska was summed up by Gustafson in a 2004 speech in Anchorage when he said Armstrong’s mantra is, “Smoother, faster, better, cheaper: everyday that’s what we try to do.”
http://www.petroleumnews.com/pntruncate/643083175.shtml
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