Saturday, October 19, 2013

Repsol plans: three more wells, three more rigs

Tim Bradner
Alaska Journal of Commerce

Repsol will drill three North Slope exploration wells this winter as part of its multi-year program to evaluate the company’s acreage, company officials said in an interview Oct. 11.

Two of the wells, designated Q-5 and Q-7, will be in the Colville River delta area east of the producing Alpine field. They are in the vicinity of wells drilled last year by Repsol and where discoveries were made, said Repsol Alaska Manager Bill Hardham.

A third well, named Tuttu 1, is further east near the Kuparuk River field, Hardham said. Tuttu is “caribou” in the Inupiat language

Spain-based Repsol is one of the most active exploration companies in Alaska. This coming winter season will be the company’s third year of drilling.

Two of the wells to be drilled in the Colville delta are to gather more information on oil and gas resources near wells drilled last year that were discoveries. Those were designated as Q-1, Q-3 and Q-6, he said.

Repsol has not yet announced a decision on the commerciality of those discoveries, Hardham said. Oil was also found in a third well Repsol drilled last year that was farther south.

“We are busy with this and we are working up some development scenarios. The wells we’ll drill this year will add to our information,” about the area, he said.

The company is still working on its drilling contracts but tentative plans are to use three Nabors Alaska Drilling Co. rigs for the winter season. A winter ice road will be constructed to the exploration area from the Kuparuk field roads, which are all-year gravel roads, and an ice airstrip and winter camp facility will be built near where the drilling will take place.

The exploration in the Colville delta is focused on conventional oil.

Several companies besides Repsol have been exploring in the area west of the Kuparuk field. One other firm is Brooks Range Petroleum, an Alaska-based independent that has been working in the area for several years and is now planning development of one discovery, “Mustang.”

Brooks Range hopes to have Mustang in production in 2015, according to the company’s Chief Operating Officer Bart Armfield. The company is working with the Alaska Industrial Development and Export Authority, the state’s development finance corporation, on an oil and gas processing plant for Mustang. Infrastructure to support the plant would also be available for other parties, according to the plan being discussed.

Meanwhile, one uncertainty affecting Repsol’s planning as well as that of other companies is a pending referendum in the 2014 Alaska primary election that would repeal a reduction of state oil production taxes approved by the Legislature earlier this year, Repsol spokeswoman Jan Sieving said.

Repsol supported the passage of the tax bill, Senate Bill 21, and is moving forward with its exploration, but the pending vote does create additional uncertainty, Sieving said.

“We are fully supportive of SB 21 and have started moving forward with investment decisions, but the referendum now adds to uncertainties. It’s difficult to make billion-dollar decisions when we don’t know what the tax structure will be,” Sieving said.