ConocoPhillips greenlights $900M Greater Moose’s Tooth-1

It was an announcement that lifted spirits at the annual Resource Development Council conference on Nov. 18.

ConocoPhillips Alaska President Joe Marushack said his company will proceed with construction of its Greater Moose’s Tooth No. 1 oil project in the National Petroleum Reserve-Alaska.

“GMT-1 has been approved for funding. It is expected to cost about $900 million and follows our recent completion of CD-5,” which is also in the NPR-A, Marushack said.

The new project will be in production in late 2018 and will produce 30,000 barrels per day at peak, he told the RDC annual conference in Anchorage. The timing likely means that construction activity will begin in 2016, a boost for North Slope contractors and their workers.

“We are pleased to have been able to work through key permitting issues with the Corps of Engineers and BLM (Bureau of Land Management) that now allows us to move into the development phase,” he said.

GMT-1 is in the northeast NPR-A about seven miles west of the reserve’s eastern boundary with state-owned lands. The producing Alpine field and now the CD-5 project near Alpine are owned 78 percent by ConocoPhillips and 22 percent by Anadarko Petroleum Corp., as is the planned GMT-1.

CD-5 began producing ahead of schedule in October, and will have peak production of about 16,000 barrels per day. ConocoPhillips’ Drillsite 2-S in the Kuparuk also began producing and will add about 8,000 barrels per day at peak.

GMT-1 will be connected by road and pipelines with CD-5 and the Alpine field.

The project has long been in the planning stages and was approved following an extended environmental and regulatory proceeding by the U.S. Bureau of Land Management.

Although GMT-1 is within the federal NPR-A, parts of the mineral rights are owned by Arctic Slope Regional Corp., the Alaska Native corporation based in Barrow.

ASRC received rights in the reserve as a part of the Alaska Native Claims Settlement Act approved by Congress in 1971.

ConocoPhillips is also at work on a planned GMT-2 project a few miles farther west in the NPR-A from GMT-1.

The petroleum reserve is a 23-million-acre federal enclave that dominates the western part of the North Slope. It was created in 1923 by President Warren Harding as a future oil reserve for the U.S. Navy, However, after years of exploratio, no commercial oil deposits were found until ConocoPhillips and Anadarko made the discoveries now being developed in the northwest part of the reserve.

Marushack also told RDC that ConocoPhillips now has six rigs at work in the North Slope fields it operates, the most since the mid-1980s. The company’s capital budget for 2015 is about $1.4 billion, down slightly from $1.6 billion in 2014.

“Our capital budget in Alaska remains strong and the reason is that the projects we do here are what ConocoPhillips does well,” which are large, conventional oil and gas projects, Marushack told the RDC.

No capital spending figures for 2016 have been announced.

 Journal reporter Elwood Brehmer contributed to this article.

11/18/2015 - 3:16pm