By Naomi Klouda
Buccaneer Energy struck a deal with ConocoPhillips that greatly expands the Australian company’s holdings in Cook Inlet and moves a major back into higher profile in the inlet.
Buccaneer executed an agreement with ConocoPhillips that allows it the right to earn a 100 percent working interest in ConocoPhillips deep oil rights in 23,368 acres held by the North Cook Inlet Unit.
That’s a sizable unit that provides a “huge area to explore,” said Cathy Foerster, a commissioner at the Alaska Oil and Gas Conservation Commission.
This area has a long track record dating back to the 1960s. The oil is contained in the Lower Tyonek, Hemlock, Sunfish and West Foreland Formations. Since 1962 they have been penetrated by 13 wells, all of them in North Cook Inlet Unit, according to the historical portion of a press release issued Monday. Seven of the wells were drilled in the 1990s. The remaining six wells were drilled by various majors during the discovery and delineation phase of the Cook Inlet in the 1960s. Of the 13 wells drilled, a total of 10 wells were successfully flow tested.
“This could mean good news for more oil production and more revenue in Alaska,” Foerster said.
The NCIU has produced almost 1.9 trillion cubic feet of gas from the shallow Sterling and Beluga formations since the 1960s. Now the NCIU is currently held by gas production that has been predominantly used to supply ConocoPhillips’ 100 percent owned LNG facility. The shallow gas production will remain owned by ConocoPhillips. But oil drilling will be new to Buccaneer.
Bob Shavelson, public advocate at Cook Inletkeeper, sees the agreement as a sign that a major oil and gas company has moved back into the inlet. And that means the state needs to look at how it allows discharge of drilling wastes into the waters of Cook Inlet in the face of increased production.
“One of the rationales to continue the dumping in Cook Inlet when the EPA set these rules in 1996, was that Cook Inlet was a declining oil and gas province and they did not anticipate growth or new discharges,” Shavelson said. “Cook Inlet is the only coastal area where industry can discharge their drilling waste. The state carved out a loophole that didn’t anticipate this new interest.”