arctic gas let’s make a deal - petroleum news

Vol. 7, No. 38 $1 • www.PetroleumNewsAlaska.com Alaska’s source for oil and gas news Week of September 22, 2002

“To laugh often and much, to win the respect of intel-ligent people and the admiration of little children...this is

to have succeeded.”

—RALPH WALDO EMERSON

■ A R C T I C G A S

■ A R C T I C G A S

I N S I D EAndex out of Slugger 2

BP Energy Center photo spread 10

Norton wants ANWR in energy bill 3

Canada's oil patch blindsided by Kyoto 5

ConocoPhillips files for two Puviag wells 4

A perfect match for elegant roofs

BP’s “Beetle” — an earlier, less serious association between BP andVolkswagen

Let’s make a dealBP says it wants fair, simple and predictable fiscal terms for gas pipelinefrom state: Company’s July 24 briefing of DNR, Revenue officials includedproposal that terms, valuation be the same across all gas taxes, royalties

By Kristen Nelson PNA Editor-in-Chief

BP Exploration (Alaska) Inc.has been saying for sometime that one of the thingsrequired to make a North

Slope gas pipeline project viableis state fiscal predictability. Thestate asked what that wouldinvolve, and in July BP beganwhat it describes as a conversa-tion with the state about fiscalpredictability.

Bob Reynolds, manager ofAlaskan taxes and royalties forBP Exploration (Alaska), madethe July 24 presentation to com-missioners and staff of theDepartment of NaturalResources and the Departmentof Revenue. He and told PNASept. 12 that BP’s concernsabout fiscal predictability forgas are grounded in the state’soil history.

“The history of our relation-ship with the state on oil wasthat we spent well over a decadein very acrimonious litigationover essentially the tax and roy-alty terms,” he said. The compa-nies ended up paying an addi-

ExxonMobil/Imperial puts Arcticgas ambitions on full display Fast-track approval for Mackenzie Delta pipeline could open way forover-the-top Alaska route; ArctiGas says ‘evidence’ points in that direction

By Gary Park PNA Canadian Correspondent

The word doing the rounds in Canadian oilpatch circles is that Exxon Mobil Corp. andits Canadian affiliates have made a pre-emp-tive strike and seized control of the Arctic nat-

ural gas agenda. From its position

of strength as thedominant gas owner in the North Slope andMackenzie Delta, the Irving, Texas, energy gianthas apparently decided that the Delta project willproceed first.

Nominally, that decision has been made byImperial Oil Ltd., its sister company, ExxonMobilCanada, and their Delta partners, Shell CanadaLtd. and Conoco Canada Ltd.

But the realities of decision-making areinescapable. Imperial (which owns 50 percent of

the 5.8 trillion cubic feet of the Delta’s threelargest onshore discoveries) is 69.6 percent ownedby ExxonMobil and ExxonMobil Canada (an 8percent owner of the Delta’s known reserves) iswholly owned by ExxonMobil.

Add to that equation ExxonMobil’s own 40 per-cent share of the North Slope reserves and youhave a potent combination.

Where does North Slope fit?

From the revival of the Arctic debate almostthree years ago, the common wisdom in Canadahas been that ExxonMobil would use its clout inany way it chose to determine when North Slopeand Mackenzie Delta gas would come on streamand by what route that gas would be delivered tomarket.

With Imperial going public Sept. 10 with its

• PNA ANALYSIS

ConocoPhillips says Mackenziegasline first; Alaska Highway second

Sharply divided prior to their merger on which Arctic natural gaspipeline should be built first, the newly merged Conoco and PhillipsPetroleum has decided there is “a natural sequence” which calls forthe Mackenzie Delta gas pipelineto be built first, followed by theAlaska Highway gasline.

Kristi DesJarlais, spokes-woman for ConocoPhillips, told PNA Sept. 18 that the companyfavors both Arctic gas pipelines “and are pursuing the required reg-ulatory approval on each as aggressively as we can. We expect bothto go forward.”

But ConocoPhillips believes the Mackenzie gasline will be builtfirst, she said.

“The Mackenzie Delta partners have begun preparing regulato-ry applications. They expect first gas in 2008.”

The Alaska North Slope partners “have said they expect first gasin 2010, 2011,” DesJarlais said.

It is “important to point out that we think there will be enough

Volkswagen AG, based in Wolfsburg, Germany, said Sept. 17that it has signed a cooperation agreement with BP Solar to pro-mote the use of photo voltaic technology by equipping both newand existing VW car dealerships with solar roofs.

Incorporating solar power in their buildings is an importantcomponent of Volkswagen’s positive environmental policy, partic-ularly in the area of CO2 emission reduction. By demonstrating apractical application of solar power, it is also hoped that the projectwill encourage broader interest in its use, Volkswagen said.

“The project highlights the economic and ecological use ofphoto voltaic components as a modern and elegant building mate-rial,” says BP Solar architect Mechthild Winking.

BP Solar will join Volkswagen’s building consultants, theLeonhadt Group, on both project engineering and execution. Theaim is to realize the first 50 projects by the end of 2003.

BP managers Dave MacDowell, left, and Bob Reynolds

When and where should a NorthSlope gas molecule be taxed?

When tax or royalty becomes due ona molecule of gas is an issue that BPwants resolved as part of its discussionswith the state on fiscal predictability.

In the production-tax world, a mole-cule of gas can move, tax-free, any-where on the North Slope, BPExploration (Alaska) Inc.’s BobReynolds, manager Alaskan taxes androyalties, told PNA Sept. 12.

“And that’s a good thing, becausethat basically says that when a decision is considered about what

What BP wants forgas, Reynolds said, isthat the royalty andtax regimes are the

same: the owners payroyalty or tax on gasonly when it leaves

the North Slope.

see GASLINE page 19

see DEAL page 8 see TAXED page 9

see ANALYSIS page 12

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OOPS!…. The worst nightmare of awriter is to go to print and then after-wards get an important piece of info.that changes some of the facts. KayCashman, Petroleum News • Alaska’spublisher, had thatlittle nightmare lastweek after writingthe article aboutBP’s Sluggerprospect (pages 4and 9 of PNA’sSept. 15 issue).

Kay found outafter the storieswent to press thatAndex Resourcespulled out of itsSlugger farm-in deal a few months ago.

She couldn’t even excuse the oops asa senior moment — because — she istoo young.

NOT ON THE MENU….Fortunately for the oil industry JaneThomas was not part of the grizzly bearfeast at the McNeil River State GameSanctuary near Katmai.

Jane, an ENSR senior complianceprogram manager, and her husband Timwon a chance to view the bears througha lottery held by the Alaska Departmentof Fish and Game. Not everyone wouldbe thrilled to have the chance to sleep ina tent two miles from the highest con-centration of brown bears in Alaska.

The philosophy behind the trip was toview and study bears — and to see howbears can become acclimated to people

in close proximity. To get water it was necessary to walk

a half-mile from camp (they clappedtheir hands a lot along the way). Allfood was stored and cooked in a foodcabin.

The 34 bears concentrated at the fallswere mostly male and sub-adult malebears. There was muchstanding up, growlingand positioning but theywere just flaunting theirmuscles for a specialspot.

There are two view-ing areas: one on a 20-foot by five-foot gravelpad at river level andthe other a viewing plat-form seven feet higher.In case you were won-dering one guide didcarry a rifle for protec-tion.

The closest Janecame to a bear was fourfeet when a sow and hercubs brought a fish toeat next to the viewing platform. Shesaid the bears paid no attention to themand seemed comfortable with people.

Full stomachs have a way of doing

that to animals. Wonder how they wouldhave acted on empty stomachs.

DENTURES FOR ELEPHANTS?…. Whoever named Unique Machinerysure knew what they were doing becausethis little company tucked away in the5800 block of Old Seward Highway is

one of the most unique in Alaska. The staff not only makes dentures for

an elephant, hip prosthesis for people,bike racks and some fish wheels but alsodoes some of the most sophisticatedmachinery work in the country and haspurchased top-of-the-line lathes.

Some people consult with aerospaceexperts but not Unique. This Alaska-grown company hired the experts andbrought them to Alaska to help with itsgrowth plans.

Unique is really four companiesunder one roof. It is a real education justto walk through the shops let aloneunderstand all they do.

First, it is a machine shop that will dowalk-in projects like welding lawnmow-ers.

Second, it threads 9 5/8 inch andsmaller casing and tubing.

Third, it makes original equipmentmanufacturing parts for the oil industry.

And, fourth, it manufactures andthreads down-hole completion productscalled “jewelry” which can be gas liftmandrels, landing nipples, etc.

Ken Bystedt has owned the companyfor 26 years. He is a third-generationAlaskan with an eye to the future.

The company is applying for dualcertification through ISO 9000(International Organization for

OIL PATCH INSIDER2 Petroleum News • Alaska Week of September 22, 2002

Insider this week: Andex out of Slugger, ENSR’sJane Thomas visits McNeil, Jack Griffin moves toConocoPhillips, ‘Cel’ stops train for directions

see INSIDER page 19

A few of the 34 grizzly bears near the waterfall at the McNeil River State Game Sanctuary. ENSRsenior compliance program manager Jane Thomas and her husband Tim won a chance to view thebears through a lottery held by the Alaska Department of Fish and Game.

Pictured here is an overshot tubing guide, a cost-effective aide indefective-component replacement. There is no need to pull full pro-duction strings when installed in a “stacker packet” configuration.Typical cost savings: $50,000 to $100,000.

A sow grizzly eating a salmon about four feetfrom the viewing platform.

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ON DEADLINEPetroleum News • Alaska 3Week of September 22, 2002

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ARCTIC GAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7CLASSIFIEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14GOVERNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6OIL PATCH INSIDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2ON DEADLINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3PHOTO FEATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10PIPELINES & DOWNSTREAM . . . . . . . . . . . . . . . . . . . . . . . . . . . .13WORLD OIL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Index

Kay Cashman, PUBLISHER

Dan Wilcox CHIEF EXECUTIVE OFFICER

Kristen Nelson EDITOR-IN-CHIEF

Steve Sutherlin MANAGING EDITOR

Gary Park CANADIAN CORRESPONDENT

Wadeen Hepworth COLUMNIST

Jen Ransom CONTRIBUTING WRITER

Alan Bailey CONTRIBUTING WRITER

Allen Baker CONTRIBUTING WRITER

Rene Breitzreutz CONTRIBUTING WRITER

Mara Severin CONTRIBUTING WRITER

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LAND & LEASINGNo ANWR? Veto bill, says Norton

If the Senate-House version of the energy bill doesn’t include a clause to openthe Arctic National Wildlife Refuge to oil drilling, Interior Secretary Gale Nortonwill ask the White House to veto it, according to Cam Toohey, special assistant tothe Secretary of the Interior for Alaska.

Norton said in a press conference Sept. 17 it would be better to scrap the billaltogether than give up on drilling ANWR, Toohey told PNA.

“From the Department of Interior perspective, if ANWR is not in the legisla-tion, it does almost nothing to enhance production,” Norton said.

Norton said even if the bill includes tax incentives for drilling and calls for useof ethanol to stretch gasoline supplies, it will not do enough to promote domesticproduction of energy, which the administration sees as a key ingredient to a solu-tion for the country’s energy needs.

“At this point, we really don’t see a lot that is going to significantly enhance theenergy picture unless we take some steps like ANWR,” Norton said.She said increasing energy efficiency standards will help the nation’s energy situ-ation, but the reality is new oil and gas supplies are needed to fuel the nation’sgrowth.

Norton said that if Congress came up with a specific proposal to reduce thefootprint of energy activities within the refuge, she would not rule out reducing thearea in ANWR that could be opened to exploration, but not if it blocked access topromising prospects.

“It’s got to be something that maintains the ability to access the reserves inANWR,” she said.

Currently a Senate-House conference committee is crafting a joint energy billfrom separate House and Senate versions. The House bill contains a provision toopen ANWR for drilling, but the Senate bill does not. The committee is trying tofinish the bill in time for Congress to act on it before taking a recess in October.

—Steve Sutherlin, PNA managing editor

ON DEADLINE4 Petroleum News • Alaska Week of September 22, 2002

■ T E C H N O L O G Y

Shell, Enventure complete wellwith new casing technologyCompanies say MonoDiameter well bore eliminates telescopingeffect of decreasing tubing diameters, allows smaller surfacebore, deeper drilling, more production; will also reduce cost

By Petroleum News • Alaska

Shell said Sept. 17 that it has com-pleted the world’s first applicationof a new technology eliminating thetelescoping effect in current well

design at a well in south Texas. The trademarked MonoDiameter was

used in a well spudded May 18 in StarrCounty, Texas. The well has been com-pleted and is flowing gas, Shell said. Theproject was a collaborative effort betweenShell Exploration & Production Co.,Shell International Exploration &Production Inc. and Enventure GlobalTechnology.

Shell said this new technology elimi-nates the telescoping effect in currentwell design, allowing operators to slimdown the top of the well while increasingthe well diameter at total depth, creatingthe “big straw” system through which toflow hydrocarbons from subsurface reser-voirs.

Deepwater Gulf of Mexico next year

Shell Exploration & ProductionPresident and CEO Raoul Restucci saidShell plans to apply this well design in thedeepwater Gulf of Mexico next year.

“We expect this revolutionary processto do for well design what 3-D seismicdid for geologic exploration and hydro-carbon development,” Restucci said in astatement.

John Darley, director of ShellTechnology Exploration and Production,said implementation was originallyplanned for 2007, but was shortened byfive years.

“This technology allows the industry

to drill deeper than ever before and reachpreviously unattainable geological objec-tives, while decreasing waste productsand reducing the surface footprint.Additionally, we expect to cut costs andincrease production rates,” Darley said.

“We fully expect the technology to beready to take offshore by the 4th Quarterof 2003,” said Lance Cook, president andCEO of Enventure Global Technology.Enventure is a joint venture of ShellTechnology Ventures Inc. HalliburtonEnergy Services.

“Backed by two parents likeHalliburton and Shell, the success ofEnventure and MonoDiameter technolo-gy is virtually guaranteed for the industryas a whole,” he said.

Shell said the MonoDiameter welldesign uses expandable tubular technolo-gy to create one continuous internaldiameter from surface to total depth. Theexpandable tubular is made of standardtubular steel that is subjected to a specialprocess to increase the ductility, reducedefect sensitivity and increase fracturetoughness, the company said. A propri-etary process allows the steel pipe to bepermanently deformed in the well bore,analogous to performing the final manu-facturing process of the tubular downhole. ◆

“We expect this revolutionaryprocess to do for well design what

3-D seismic did for geologicexploration and hydrocarbon

development.” —Shell Exploration &Production President and CEO Raoul

Restucci

EXPLORATION & PRODUCTIONConocoPhillips (Alaska) files for twoPuviaq wells in NPR-A

ConocoPhillips (Alaska) Inc. is moving ahead with plans to drill exploration wellsthis winter in the National Petroleum Reserve-Alaska south of Smith Bay near thePuviaq site where the company stored a drilling rig over the summer on an insulatedice pad.

The company has filed to drill two exploration wells, the Puviaq No. 1 and No. 2,in the northwestern area of the northeast planning area of the NPR-A: Puviaq 1 at 1,147feet from the north line and 805 feet from the west line of section 35, township 16north, range 10 west, Umiat Meridian; and the Puviaq 2 at 247 feet FNL and 1,645 feetFWL of section 16 T15N-R10W, UM. ConocoPhillips said up to four reservoir pene-trations (two wells and two sidetracks) may be drilled at each Puviaq location duringthe winter drilling seasons between December 2002 and June 2004.

Wells will be accessible by aircraft, rolligon trails and/or ice roads across the frozentundra. The company said rolligons or other all terrain vehicles may be used to mobi-lize a small camp, equipment and personnel needed to construct the initial ice pad, por-tions if the ice road (if constructed), airstrip and potential storage area.

Rig stored near site

The drilling rig slated for use at the Puviaq sites was stored over the summer on aninsulated ice pad near the Puviaq No. 1 exploration drilling site; the Puviaq No. 2 loca-tion is several miles from the drill rig storage location.

Subject to regulatory approval, the company said, ice roads and pads may be con-structed in selected areas, e.g. staging pad on private lands in Barrow, as soon as midto late November to early December.

“This early access situation could yield a spud date in late December, 2002-earlyJanuary, 2003,” ConocoPhillips said. The company said well drilling would not beginuntil the well pad is accessible by ice road or rolligon trail from Barrow, Camp Lonelyor the Alpine or Kuparuk oil fields, not before an airstrip is operational in the area.

The company said that if it opts to perform additional exploration drilling operationsin the Puviaq area beyond the winter of 2002-03, the drilling rig would again be storedon an insulated ice pad.

Depending on logistical arrangements, the exploration drilling program mayinclude: an ice road/rolligon trail from Kuparuk to Puviaq connecting the Kuparukroad system; an ice road/rolligon trail from Barrow to Puviaq for drilling supplies; arolligon trail from Camp Lonely to haul a small camp and ancillary material to thePuviaq site for ice pad construction; and mobilization, drilling and demobilization ofthe drilling rig.

—Kristen Nelson, PNA editor-in-chief

EXPLORATION & PRODUCTIONConocoPhillips stakes another well inNPR-A, bringing total to 8 wells this year

ConocoPhillips Alaska Inc. recently staked another well in the NationalPetroleum Reserve-Alaska, bringing its total NPR-A stakings this year to eight,Bureau of Land Management records show.

The latest staking was for a well at the company’s Carbon prospect, leaseAA081806.

Carbon is in the SESE of section 4, township 10N range 1E, UM, in the areawhere Moose Tooth and Spark wells have been drilled.

Week of September 22, 2002

WORLD OIL

Petroleum News • Alaska 5

CANADAJoint government effort neededto develop B.C. offshore

As British Columbia engages in debate over whether or not toopen its offshore to oil and gas exploration, there is a need to resolveownership and management of the resource region, said PatrickO’Rourke, assistant deputy minister for Energy and Mines with theBritish Columbia government.

Speaking to the Gowlings’ Energy and Natural Resources con-ference in Calgary Sept. 11, he said that requires the BritishColumbia and Canadian governments to make a “joint effort” toachieve a “cooperative agreement.”

Federal Natural Resources Minister Herb Dhaliwal has alreadyset a deadline of 12 to 18 months to sort out the outstanding offshoreissues.

A scientific panel appointed by the British Columbia governmenthas also urged that ownership of the Hecate Strait, covering about38,000 square miles, be clarified.

Shell, Petro-Canada, Chevron hold leases

The strait is seen as the pivotal oil and gas resource of an offshoreestimated to hold 9.8 billion barrels of oil and 25.9 trillion cubic feetof gas. It is where Shell Canada Ltd., Petro-Canada and ChevronCanada Resources hold the primary exploration leases.

For O’Rourke, the priority is “cooperative development or it sim-ply won’t work.”

On the matter of jurisdiction, he understood provincial ownershipended at the low-tide mark on the British Columbia coast, but it wasunknown whether the Hecate Strait would be treated in the same wayas the west coast of Vancouver Island.

O’Rourke suggested there were two options open to the govern-

■ C A N A D A

Canadian oil patch blindsidedby Kyoto ratification decisionIndustry fears loss of jobs and money if climate-change treaty is fullyimplemented, with Arctic, oil sands and East Coast at top of ‘hit list’

By Gary ParkPNA Canadian Correspondent

Western Canada’s oil patch and its provincialgovernments are angry, edgy and bewilderedby the Canadian government’s decision toroll the dice and put the Kyoto Accord to a

ratification vote in Parliament this year. There is talk that if Canada moves from ratification

to full implementation, plans to spend billions of dol-lars in the Alberta oil sands, Arctic and East Coast off-shore will dry up, triggering a flight of investmentmoney to the United States and countries such asMexico and Venezuela that are exempt from Kyoto,but are poised to challenge Canada’s role as the lead-ing exporter of oil and gas to the United States.

When Prime Minister Jean Chretien pledged at theWorld Summit of Sustainable Development in SouthAfrica on Sept. 4 that his government would adoptKyoto’s targets for greenhouse gas emissions and facea possible constitutional challenge from Alberta hecast a pall over industry head offices in Calgary.

Echo of 1989

Amid cries of “betrayal” and “breach of trust,”there was an echo of 1980 when the federal govern-ment imposed the National Energy Program, whichwas prepared in secrecy to increase Canadian owner-

ship of its energy resources by offering incentives todomestically controlled companies to explore theArctic and East Coast frontiers.

In fact, many of the Canadian companies who bor-rowed heavily to buy the assets of foreign firms endedup in bankruptcy. Capital budgets were slashed by bil-lions of dollars and thousands were laid off with dev-astating consequences in Calgary where hundreds ofhomes were sold for $1 to those willing to assumemortgages, enabling the sellers to avoid foreclosureproceedings.

An estimated C$97 billion was drained out ofWestern Canada’s economy in the early 1980s until achange of government saw the National EnergyProgram disbanded in the mid-1980s.

Green Twin

Kyoto has been described as NEP2 or the GreenTwin of the NEP, although Natural ResourcesMinister Herb Dhaliwal told industry leaders inCalgary Sept. 4 there is “absolutely no comparison”between the two.

Chretien, in taking to the podium in South Africa,brushed off the resource sector warnings and insistedthat Canadians shared an even greater “imperative” totackle the challenge of climate change.

“You cannot wait until it’s too late,” he said. “We

see DECISION page 6see OFFSHORE page 6

GOVERNMENT/WORLD OIL6 Petroleum News • Alaska Week of September 22, 2002

■ A N C H O R A G E

Knowles will not challenge Murkowski’s right to name replacementIn his farewell speech to Anchorage Chambergovernor says budget cuts and opening resources not enough; change is needed

By Jen RansomStaff Writer

Gov. Tony Knowles will not challenge Sen. FrankMurkowski’s right to name a replacement to the U.S.Senate if Murkowski is elected governor, Knowlessaid in his farewell speech to the Anchorage Chamber

of Commerce Sept 16. Two years ago the Alaska Legislature passed legislation

enabling a sitting senator to name his own replacement, andthe out-going governor said he would respect that policy.

While presenting his speech at the chamber’s Make itMonday Forum, Knowles did his best to stay away from thepolitical race between Murkowski and Lt. Gov. Fran Ulmer.When asked about his own plans for the future, he repliedonly that he and his wife, Susan Knowles, were looking for-

ward to moving back into their ownhome in Anchorage, and that he wasplanning to change his voter registra-tion back to his own district.

Knowles did, however, go intosome detail on his ideas for Alaska’sfuture.

“Cutting the budget and openingresources will not fix everything,”said Knowles. “We need a change.”

Knowles said he believes thatchange includes making the Alaska Highway Gas PipelineProject a reality. Happy that the gasline now has bipartisansupport in the U.S. Congress, Knowles said the project was“clearly moving forward to getting the gas to market.”

He said that in order to do that, there are three majorthings that have to be done.

First, the Alaska government must continue to work withthe North Slope gas owners – BP, ExxonMobil andConocoPhillips.

Second, the government has to continue to look at theproject components, streamlining plans in order to make theproject viable.

Third, Congress must pass legislation that allows theAlaska Highway Gas Pipeline Project to go forward.

Knowles said that he will continue to press for the gasproject to be approved by Congress this year. He said thatincentives for energy companies to invest in the project mustbe addressed by Congress, and are important in the gaspipeline project’s success. ◆

Gov. Tony Knowles

have an international obligation.” With Canada and Russia announcing

their intention to ratify, they have tipped thebalance in favor of the 1997 Kyoto pact,which requires support from at least 55countries accounting for 55 percent of glob-al greenhouse gas emissions, the bulk ofwhich come from burning fossil fuels.

Chretien dismissed the Alberta govern-ment’s “disaster scenarios,” including esti-mates that Kyoto could drain C$23 billion toC$40 billion a year from Canada’s GrossDomestic Product, add C$3 a barrel to oilsands production costs and set off a flight ofcapital from Canada to the United States andelsewhere.

Alberta Premier Ralph Klein saidChretien told him in a phone conversationthat Kyoto could have a “15 percent nega-tive impact” on the industry. “But is it 15percent?” Klein asked. “We don’t know.Neither does the prime minister.”

Petro-Canada warns of scale downs

Petro-Canada, which gained a 25 percentinterest in all federal lands under theNational Energy Program, is no longer astate-owned enterprise and was the firstCanadian company to warn of Kyoto’s con-sequences. A spokesman said Sept. 4 it wasa “very real possibility” that close to C$5.8billion in two new oil sands projects couldbe scaled down or scrapped if Kyoto wasfully implemented, requiring Canada toreduce its greenhouse gas emissions to 6percent below 1990 levels by 2012.

Currently, those emissions are estimatedat 14 percent above 1990 output.

“This is not an idle threat,” thespokesman said. “This is business reality.”

By later in the week, other Petro-Canadaspokesmen were attempting to soften theimpact of those remarks, saying the compa-ny would still proceed with the oil sandsprojects, while weighing the costs of Kyoto.

Petro-Canada’s initial spokesman saidthe Chretien government has yet to answerquestions on how much Kyoto will cost andwho will bear those costs.

“The way things stand now, each of thegovernment’s four Kyoto options would

require us to scale back our oil sands invest-ments,” he said, although Petro-Canada ishopeful it will know more about the govern-ment’s intentions before it makes businessdecisions on the two projects in late 2003.

Meadow Creek at risk

At risk are Petro-Canada’s plans for aC$750 million, 80,000-barrel-per-day pro-ject at Meadow Creek in northeasternAlberta, with Nexen Inc. as a 25 percentpartner, and a C$5 billion proposal toexpand its Edmonton-area refineries toprocess up to 175,000 barrels per day ofbitumen within 10 years.

While acknowledging that the oil sandssector is an “energy intensive” method ofextracting oil, the Petro-Canada spokesmansaid his company has given a high priority toprotecting the environment.

Citing the company’s MacKay Riverproject due to come on stream this year at30,000 barrels per day and the MeadowCreek scheme, he said co-generation powersources for those plants will reduce green-house gas emissions by 50 percent com-pared with conventional extraction methods,while raising recovery rates to between 60and 80 percent from the traditional 50 per-cent.

Petro-Canada is also a 12 percent partnerin Syncrude Canada, the giant oil sandsoperation that generates about 250,000 bar-rels per day and expects to add 100,000 bar-rels per day in 2004. That consortium ischasing a target of lowering its carbon diox-ide emissions by 45 percent per barrel from1998 to 2008.

Uncertainties for others

Two other oil sands players added to themood of anxiety.

ConocoPhillips Canada Ltd. said it needsmore information on the specifics of Kyotobefore it makes a commercial decision thisyear on proceeding with a C$1 billion,100,000 barrel-per-day project.

TrueNorth Energy L.P., owned 78 per-cent of Kansas-based Koch Industries Inc.,said Kyoto is “just one more uncertainty”facing its planned C$3.5 billion Fort Hills oilsands project targeting 190,000 barrels perday by 2008.

The oil sands represent both the biggesthope for Canada’s future oil production and

the biggest fear, if Kyoto becomes the law. Output from the oil sands is targeted to

pass conventional crude in early 2005 andtriple to 3.4 million barrels per day within adecade if projects costing another C$25 bil-lion proceed on schedule after 2005.

But pressures have been building on thesector to get serious about cleaning up itsenvironmental performance.

The National Energy Board estimatesthan producing 50 barrels of conventionalcrude emits 1 tonne of carbon dioxide; withthe oil sands, just over eight barrels of oilproduce the same quantity of greenhousegases.

The companies in the field insist they aremaking great strides in developing newtechnologies to combat greenhouse gases.Shell Canada Ltd. and its partners have set agoal of cutting emissions in half by 2010 attheir massive Athabasca project, due onstream in early 2003 at 155,000 barrels perday and eventually reduce emissions belowthose of conventional crude.

Information vacuum

However, the industry is operating in aninformation vacuum, because it doesn’t yetknow precisely what the governmentintends to do. The Canadian Association ofPetroleum Producers is “resoundingly dis-appointed” that Chretien bypassed attemptsto find a made-in-Canada solution to cham-pion the accord, said association presidentPierre Alvarez.

“It’s impossible to know what all thismeans until we’ve heard more from the fed-eral government,” he said. “We’re not hope-ful for anything at this point.”

Almost without exception, the othermajor players in Canada have expressedtheir concerns about Kyoto. Chief executiveofficers of EnCana Corp., Imperial Oil Ltd.,Nexen Inc., Husky Energy Inc. andCanadian Oil Sands Trust are among thosejoining the chorus.

EnCana CEO Gwyn Morgan took theunusual step of writing directly to Chretiensaying that Kyoto would be the equivalentof “economic self-mutilation” for Canadaand be “one of the most damaging interna-tional agreements ever signed by a Canadianprime minister.”

He said the terms of Kyoto would placeCanada at a competitive disadvantageagainst the United States, and would dis-courage investment in Canada.

Morgan and Nexen CEO Charlie Fischersaid their companies would consider shiftingtheir investment programs elsewhere if thebusiness climate in Canada suffered underKyoto.

Imperial CEO Tim Hearn said Canadacould develop its own greenhouse gas emis-sions strategy through “strong consultation”among the public, business community andinterest groups that would achieve “goodenvironmental management and economicgrowth.”

Chretien promises consultation

In Calgary Sept. 18 for meetings with oil

patch leaders and a speech to 900 supportersof his Liberal Party, Chretien pledged thatthe progress achieved in the oil sands over30 years will not be put at risk, nor wouldthe oil and gas sector carry more than its fairshare of Kyoto obligations.

He said the implementation of Kyoto“must take into account our place in theNorth American economy,” but beyondpromising extensive consultation he offeredno specific details.

“If there was ever a file where the devil isin the details, it is in climate change,” saidAlvarez after the speech.

Eric Newell, chairman of SyncrudeCanada Ltd., the world’s largest producer ofsynthetic crude, said he took some comfortfrom Chretien’s assurance that he does notintend to hurt the petroleum industry. ButNewell said he won’t be satisfied until hesees the terms of the contract.

Brian Prokop, an analyst with Peters &Co., said companies now immersed indeveloping 2003 capital budgets are likelyto take a cautious line and could divertmoney they were planning to spend inAlberta to other places.

Alberta opposed

Alberta Premier Ralph Klein sent asharply worded letter Sept. 4 to Chretiendemanding a “clear, thorough, honest andpublic understanding of the costs of Kyoto,”a detailed plan on how Kyoto will be imple-mented without unduly penalizing anyregion or sector of the country and an evalu-ation of other options to address climatechange.

At the same time, Klein has directed gov-ernment officials to start preparing a courtchallenge to any federal interference in theconstitutional ownership by provinces oftheir natural resources.

Alberta government sources also say theprovince is drafting legislation to pre-emptany federal law. The bill could include atimetable for specific emissions targets andincentives for companies to develop tech-nology to reduce emissions.

Klein also announced the province’s topadviser in the struggle will be former pre-mier Peter Lougheed, who led Alberta’sfight against the National Energy Programin the 1980s.

From Canada’s other oil and gas produc-ing provinces, British Columbia PremierGordon Campbell said it would be “irre-sponsible” to proceed with Kyoto withoutknowing the cost and SaskatchewanPremier Lorne Calvert said he wanted toknow how much implementing Kyotowould cost and how the federal governmentwould compensate the provinces mostaffected.

Newfoundland Premier Roger Grimessaid he has seen preliminary federal figuresthat show his province, which is expected toproduce one-third of Canada’s total lightcrude output in 2003, would see half of itsprojected growth wiped out if Kyoto wasfully implemented. ◆

continued from page 5

DECISION

ments — obtaining court rulings, or forboth sides to set aside those argumentsand agree that each had “some degree ofauthority.”

On management, he said the roles ofthe two governments were open to nego-tiation, along with the division of royal-ties and revenues that would be generatedby offshore development.

He said it was not necessary to resolve

ownership to settle the managementissue, “just the willingness to reach anagreement.”

O’Rourke said he did not believe aHaida First Nation writ filed in the BritishColumbia Supreme Court in March lay-ing claim to Hecate Strait was “necessar-ily fatal.”

He said the First Nation might just bestarting the action to preserve its positionand take no further steps until “they seehow things go.”

—Gary Park, PNA Canadian correspondent


OFFSHORE


ARCTIC GAS


CANADADhaliwal agrees withImperial that Arctic gascould flow by 2007

Canada’s Natural Resources Minister Herb Dhaliwal hasendorsed Imperial Oil Ltd.’s new 2007 start-up target for shippingnatural gas out of the Mackenzie Delta.

“I think it’s a realistic date,” he said Sept. 12, a day after Imperialsaid it was now aiming to fast-track both regulatory approvals andthe construction phase for the C$4 billion pipeline and field devel-opment. Dhaliwal said he believed the regulatory requirements couldbe met within 24 to 30 months, while the pipeline “technical require-ments” could be achieved in 24 months.

Earlier timelines had estimated that both the regulatory processand construction would each take three to four years.

Northwest Territories Resources Minister Jim Antoine, inWashington, D.C., to meet with U.S. legislators on pipeline issues,said Imperial’s fast-track timetable could be accomplished with thecooperation of the various interested parties in the territories.

He welcomed Imperial’s new aggressive schedule as proof thatthe company is “more firmly committed now than ever to building aMackenzie Valley stand-alone natural gas pipeline.”

But one indication that Imperial could encounter some obstaclescame from the Yellowknife-based Canadian Arctic ResourcesCommittee, whose research director Kevin O’Reilly said startingdeliveries within five years is an enormously optimistic goal.

He noted that there is a “plethora” of boards and agenciesinvolved in reviewing the pipeline proposal, under “constitutionallyentrenched” federal legislation or aboriginal land claims agreements.

O’Reilly said clearing those hurdles would take three to four yearsbefore construction could begin.

—Gary Park, PNA Canadian correspondent

■ C A N A D A

Canadians run shuttle campaign in bidto sway U.S. legislators on energy billDhaliwal makes case for ‘market-driven’ rather than subsidized pipeline solutions,but Bingaman spokeswoman says Alaska gas needs help to reach market

By Gary Park PNA Canadian Correspondent

Competing for attention amid the Iraq debateand approaching U.S. congressional mid-term elections, Canadian politicians haveopted to defy the odds and present their

opposition in Washington, D.C., to governmentfinancial backing of an Alaska Highway gaspipeline.

Canadian Natural Resources Minister HerbDhaliwal spearheaded the lobbying on Sept. 10with meetings that included Sen. Jeff Bingaman,chairman of the Senate Energy Committee, andRep. Bill Tauzin, chairman of the House ofRepresentatives Energy and CommerceCommittee.

Despite his renewed appeals, there was noimmediate sign that the Senate will retreat from aproposal to offer subsidies and loan guarantees tothe pipeline.

Dhaliwal told reporters that he tried to persuadethe U.S. legislators to drop a section from theEnergy Policy Act that would offer the U.S. indus-try as much as $20 billion in subsidies through afloor price for North Slope gas and $11 billion inloan guarantees to build the delivery system.

He again stressed “there should be a market-dri-ven solution,” warning that if the Senate plan is

approved lawmakers from gas-producing states inthe Lower 48 will ask for matching subsidies.

“The real concern is distortion of the market,”he said.

Dhaliwal appeals for route neutrality

Appealing for a “route-neutral” stance onCapitol Hill, Dhaliwal argued that both theCanadian government and the Bush administrationare agreed that governments should stay out of theprocess of selecting a pipeline route and offeringfinancial back-up for the construction.

Dhaliwal said Bingaman shared his concernsabout market distortion, but a spokeswoman forBingaman later told reporters that the senator wasnot swayed by Dhaliwal’s request for an elimina-tion of subsidies.

“We believe in order to get Alaska gas to theU.S. market there is need to have some assis-tance,” the spokeswoman said. “This is somethingthe senator feels very strongly about.”

With two-thirds of the highway pipeline routescheduled to cross Canadian territory, Dhaliwalsaid he was uncertain whether Canada would with-hold approvals should the subsidies be retained.

He said Canada “should have something to say”about when and where a gas pipeline should be

see ENERGY page 8

tional $2 billion-$3 billion. The gas project, Reynolds said, “can-

not withstand that kind of risk.”

Fiscal certainty just one leg

But state fiscal certainty is only oneleg of a “four-legged stool,” said DaveMacDowell, director of external affairs-gas for BP Exploration (Alaska).

Four things are needed to progress theproject, he told PNA, and state fiscal pre-dictability is only one. The others are fed-eral enabling legislation, an efficient reg-ulatory process in Canada and a reductionin cost for the project, now pegged atsome $20 billion.

Since BP’s July 24 presentation to thestate, the company has “been having con-versations with people who have an inter-

est in this topic”, MacDowell said, toinform people about BP’s view of fiscalpredictability prior to the next session ofthe Legislature and the new administra-tion.

BP asking for simplification

In evaluating fiscal predictability,Reynolds said, BP looked at all of thecomponents of the state’s take — royalty,production tax, property tax, net profit

share and state income tax — and askedhow those elements of take could bechanged to make them “more fair andsimple and predictable” for gas.

The discussion BP had with the statewas based on suggested ways to simplifythe state’s “take regimes” for gas by usingcommon terms between the differentregimes and by calculating the value ofgas just once for all of the regimes. In thepresent tax regime, different values arecalculated for royalty and for productiontax.

“In the new world we propose calcu-lating one value to be used for bothregimes, both the production tax regimeand the royalty regime,” he said.

A lot of the conversation is about sim-plicity, Reynolds said, and “about takingareas that have historically been con-tentious either because they’re not welldefined or not well understood” andagreeing in advance on “what we thinkare viable terms and then determiningways that we can test those terms overtime.”

This was not a conversation aboutincentives or tax holidays or changes inroyalty rate, he said: “This is just abouttrying to nail down what the existing takewould be.”

Common terms

Simplicity is the primary thing BP islooking for in common terms, Reynoldssaid. With five different regimes in thestate for taxes and royalty, “we have alarge body of statutes or law and regula-tions that control each one.” In addition tothat complexity, he said, there are alsosome omissions.

Reynolds said BP talked to the stateabout establishing an algorithm or formu-la to establish the value for gas based onavailable price markers.

And BP is also suggesting a differenttype of audit. Instead of auditing for com-pliance, Reynolds said, BP wants auditsto validate the agreement between theproducers and the state. “And if it doesn’twork, then we go out and we change thebasic agreement.”

The test for clarity “will probably bewhether we’ve minimized the areas ofdispute,” he said. “If we can come awaywith an agreement that has some durabil-ity in terms of parties not wanting tobreak it, then we’ve succeeded.”

As for certainty, Reynolds said BPneeds to run the economics on a 20-30year project, and has to ask: “Whatdegree of comfort do you have that thoseassumptions that you’re using are actual-ly going to last that long?”

Determining a value

Common terms for taxes and royaltymeans one formula to value the product— for both tax and royalty, Reynoldssaid. What BP wants, he said, is “a valuethat reflects what we actually get for sell-ing the gas.”

And that amount, MacDowell said,would be arrived at through an algorithmor formula, not by counting up each andevery transaction. “And you could testthat to make sure the formula was behav-ing as you expected it would.”

“We’d like to have our tax and royaltypaid at what we get for our product,”Reynolds said. An algorithm or formulawould be used to determine those net pro-ceeds, he said: “Or at least approximatethat.”

The algorithm would approximatereality, MacDowell said, without “thetime, energy, effort and potential dis-putes” of measuring multiple transac-tions.

A “worst-case formula could be com-prised of a hundred different markers,”Reynolds said. “What we’re saying is,let’s pick the most viable, most liquid, themost … transparent liquid markers andlet’s use those.

“As long as they’re representative ofwhat we think the real value of the Alaskagas is.”

“And choosing those, the most appro-priate marker or markers, is the subject ofthe conversation that needs to occur withthe state. That’s a critical part,” saidMacDowell.

Deductions

Also BP’s list are allowable deduc-tions.

The gas treatment plant will be an“enormous multi-billion dollar facility”that is “essential to getting the gas to mar-ket” and BP wants the cost of operatingthat facility to be a deduction, Reynoldssaid. The gas treatment plant will be aregulated facility, he said, and will have atariff, “and we would like to just makesure that that tariff is deductible.”

Another deduction, he said, would befor moving the gas from the North Slopeto market. There will be a tariff for thepipeline, he said, and BP wants to use theregulated tariff as the basis for the deduc-tion.

There have been many years of litiga-tion over the tariff on the trans-Alaska oilpipeline, Reynolds said, and there areongoing challenges even today to thosetariffs.

“And what we want to do is make surethat we do not repeat that in the gas envi-ronment because the tariffs for gas areeven more important to gas than the tar-iffs are to oil,” he said. The tariff on thetrans-Alaska oil pipeline is about $4 abarrel and the value of oil is between $20and $25 a barrel, so the tariff is 20 percentor less of the value of oil.

But, Reynolds said, a tariff on the gaspipeline could be $2 and the value of thegas $3 to $3.50 — a tariff of 50 percent ormore of the value of gas.

BP wants to makes sure that the stateand industry don’t end up at odds overthis, he said.

ARCTIC GAS8 Petroleum News • Alaska Week of September 22, 2002

built and might be ready to draw the lineif President George W. Bush signs a billthat includes subsidies.

Canadian opportunities could dry up

Dhaliwal said he was also trying tomake the case that Canada is a secure,reliable source of oil, natural gas andelectricity for the United States and isalready the largest foreign provider of gasand currently second to Mexico as anexporter of oil.

But Bingaman’s spokeswoman saidthe senator endorses the legislative objec-

tive of reducing U.S. reliance on all for-eign supplies of energy.

Dhaliwal’s visit was followed one daylater by Northwest Territories ResourceMinister Jim Antoine, who discussedpipeline issues with legislators.

Meanwhile, Robert Marshall, seniorpipeline adviser to the NorthwestTerritories government, warned Sept. 11that plans for a Mackenzie Valleypipeline could be rolled back 15 years ifthe United States introduces a floor pricefor North Slope gas.

Under a worst-case scenario, he saidopportunities for development of bothNorthwest Territories and Alberta gaswould dry up by as investment moneymoved to Alaska. ◆


ENERGY


DEAL

see DEAL page 9

“The history of our relationship withthe state on oil was that we spent

well over a decade in veryacrimonious litigation over

essentially the tax and royaltyterms.” … The gas project “cannot

withstand that kind of risk.” —Bob Reynolds, BP Exploration

(Alaska) Inc.

“We spent 10 years arguing about acost that was less than 20 percent of thevalue of a product, oil. Without a change,what would that mean if you’re talkingabout a cost that was over 50 percent ofthe value of a product?” MacDowellasked.

To make sure that the state and indus-try don’t end up at odds over costs, “anagreement with the state will be requiredup front,” Reynolds said.

Fuel gas also an issue

Tax and royalty treatment of fuel gas— the gas used to run the treatment plantand the pipeline — is another issue thatReynolds said needs to be resolved. Thenormal practice in the gas industry is thatthe shipper donates a portion of his gas tothe carrier for treatment and transporta-tion.

“And we’re basically saying let’s dothe same thing for Alaska. And that thatgas that’s consumed doesn’t have anykind of tax or royalty associated with it.”Reynolds said that would be consistentwith Lower 48 practice and also simpli-fies the process: the quantity of gas thatis sold is the quantity of gas that is taxed.

BP also wants confirmation from thestate that the carbon dioxide removed atthe gas treatment plant and reinjectedwould be tax and royalty free.

Binding arbitration: winner takeall

Resolution of future disputes is animportant issue for the producers,Reynolds said, and the solution they pro-pose is baseball-style (winner-take-all)

binding arbitration. “If we have a dispute, we call in some

neutral third parties, present our cases andlet them decide.”

The arbitration panel doesn’t get to splitthe difference in this kind of arbitration, hesaid: “It’s one side is right and one side iswrong.”

Oil royalty for the major producers issubject to baseball arbitration now,Reynolds said: “So we’ve been down thisroad and as far as we’re concerned itworks.”

BP wants to see both tax and royalty forgas subject to baseball arbitration.

Only one check?

There is something else BP would likethe state to consider, Reynolds said, some-thing that is already done in Alberta.

If the terms for tax and royalty are com-mon — same value, same deductions —“do we need to write two different checks?Why don’t we just write one check thatcovers both?”

That would be a big change, he said, butone the producers hope the state will con-sider.

Looking at an Alaska royalty of 12.5percent and a production tax of around 10percent for gas, an average would be 22-24percent, factoring in some leases with ahigher royalty.

In Alberta producers already write justone check: for 25 percent.

This would further simplify the state’sfiscal regime, and wouldn’t even be break-ing new ground, Reynolds said.

Average weighted royalty?

BP is also proposing a single royaltyrate for every molecule of gas.

Instead of saying so much gas comesfrom leases with 12.5 percent royalty, somuch from leases with 16 2/3 percent andso much from leases with a 20 percent roy-alty, Reynolds said the idea would be to doa weighted average and charge all gas atone royalty rate.

BP is also proposing a uniform fieldcost allowance. Some lease forms allow theproducers to charge field costs against thestate’s royalty gas, he said, and some don’t.As with the royalty, BP is proposing aweighted average field cost applied to allgas.

Binding arbitration for property tax

On property tax, Reynolds said, BP is“not looking for a change in the municipal-ity’s take” but wants to see if it can reachagreement with the state on some of thecomponents going in. It would make it asimpler task, he said.

BP also wants to replace the StateAssessment Review Board with bindingarbitration.

Reynolds said he doesn’t think eitherthe producers or the state are in a positionto deal with the income tax issue yet, but “itneeds to be part of the final agreement”once more work is done.

The producers also want a moratoriumon municipal taxes for the life of the pro-ject.

“We need to make sure on a project ofthis size that we don’t have municipalitiesapplying things like sales taxes or transfertaxes or etc.,” Reynolds said.

Vehicles for delivery of terms

There are different “vehicles” to deliverthese terms, Reynolds said.

One would be a contract negotiated withthe administration and enacted by theLegislature. The constitutionality of such acontract would have to be tested in theAlaska Supreme Court, he said, becausethe contract would have to bind subsequentLegislatures.

Another possibility is something usedelsewhere in the world: a compensatoryroyalty contract. Such a compensatory con-tract would say “if taxes go up by a dollar,royalty goes down by a dollar.” ◆

ARCTIC GASPetroleum News • Alaska 9Week of September 22, 2002

to do with the gas molecule that comesout of the ground… absent a tax consid-eration, that molecule goes to the placewhere it gets the highest and best use.”Production tax is not an issue in decidingwhat to do with a gas molecule atPrudhoe: those molecules of gas can besent tax-free to be used for enhanced oilrecovery at Kuparuk, for example, or toproduce viscous oil at Milne Point.

But on the royalty side, when a gasmolecule leaves a unit like Prudhoe Bay,the royalty comes due. “And what thatdoes is it interjects an artificial consider-ation into where that molecule will go,”Reynolds said. “Because you’re saying,well, do I really want to take a moleculeout of Prudhoe if I’m going to have to

pay 12.5 percent on it?” And there’s another complication. Once you pay the royalty and that gas

molecule leaves Prudhoe, and then youproduce product out of Kuparuk,“Which molecule is getting produced? Isit the molecule that you paid the royaltyon?”

Reynolds said the producers and thestate “spend a tremendous amount oftime trying to negotiate an agreementthat says, when the molecules come outof Kuparuk, how many of them alreadyhave royalty paid and how many of themdon’t? Are the ones that had royalty paidthe first ones out? Or the last ones out?What percentage of the molecules?”

What BP wants for gas, Reynoldssaid, is that the royalty and tax regimesare the same: the owners pay royalty ortax on gas only when it leaves the NorthSlope.


DEAL continued from page 1

TAXED

“In the new world we proposecalculating one value to be used forboth regimes, both the production

tax regime and the royalty regime.”—Bob Reynolds, BP Exploration

(Alaska) Inc.

PHOTO FEATURE10 Petroleum News • Alaska Week of September 22, 2002

BP opens $7.1 millionenergy center

BP Exploration (Alaska) Inc. held an open house Sept. 10 to heraldthe opening of the BP Energy Center, a new $7.1 million facilityAlaska’s nonprofits and education groups can use free of charge.

BP is funding construction and operation of the center as a part of the“Charter Commitment to Alaska,” an agreement forged with the Knowlesadministration during BP’s acquisition of ARCO.

The 13,500 square foot building has six conference rooms to accom-modate groups from six to 125, and interactive displays about the energyindustry in public spaces.

“The BP Energy Center is a distinctive facility that will allow BP andits employees to connect with Alaskans in new and different ways,” saidSteve Marshall, president of BP Alaska. “We hope communities will beenriched through the programs and meetings held at the center.”

In 2002 the center will host a certificate program in nonprofit man-agement, back-to-school teacher training for an elementary school serv-ing lower-income families, PTA meetings, a BP Teachers of Excellenceworkshop and meetings of the Nature Conservancy.

—Steve Sutherlin, PNA managing editor

PNA photos bySteve Sutherlin

The BP Energy Center was designed to reflect colors of its forest surroundings.

Building elevations of the BP Energy Center were designed to frame and show-case the wooded setting.

In the photo above, CathyFoerster, BP project manag-

er for the Energy Center(left) demonstrates the cen-

ter’s classroom curriculumkits. Hands-on activities for

students teach about oiland gas exploration and pro-

duction, arctic plants andanimals, and other topics.

At right, glass walls in com-mon areas of the BP Energy

Center allow visitors toexperience the forest whilerelaxing between meetings.

PHOTO FEATUREPetroleum News • Alaska 11Week of September 22, 2002

In the photo above, Windows in meeting rooms allow a view of the treeswhile also allowing the room to be darkened for audio visual presentationsAt right, a multimedia display with Alaska storytellers speaking against abackdrop of Alaska scenes. As the storyteller speaks, the words appear on a“story pipeline” which snakes out of the building into the forest.

An interactive kiosk sponsoredby Williams displays video andanimation about the refiningprocess and drilling technology,while a BP display features a vir-tual tour of North Slope opera-tions, from exploration and pro-duction to transportation via thetrans-Alaska pipeline and marinetankers.

intention to pursue fast-track approval forthe Delta, the bigger question becomes:Where does the North Slope now fit in thescheme of things?

One theory that is popular amongobservers and analysts has ExxonMobilusing the Mackenzie Delta project asleverage for the North Slope, giving freshlife to the much-disparaged over-the-top,or northern route.

It unfolds like this: Once the approvalsare in place for a Mackenzie Valleypipeline, ExxonMobil will revive the casefor a connection from the North Slope tothe Delta, including an estimated 180miles of pipeline under the shallowwaters of the Beaufort.

On the plus side, the argument runs,such a route could be completed for muchless than the combined estimated cost ofUS$22 billion to build separate systemsalong the Alaska Highway andMackenzie Valley; it would take advan-tage of existing infrastructure and permitsin Canada; and it could be accomplishedwithout massive infusions of governmentloan guarantees or tax credits.

The negatives remain the same:Inflexible opposition from the Alaska andYukon governments and environmental-ists, although the concept does have somesupport from aboriginal groups in theNorman Wells area of the centralNorthwest Territories, enticed by theoffer of 100 percent aboriginal ownershipof the pipeline.

The thought of new hope for the north-ern route proposal generates undisguiseddelight from Harvie Andre, chairman ofArctiGas Resources Corp. (the Canadiansubsidiary of Houston-based ArcticResources Corp.), which earlier this yearfiled preliminary information withCanadian regulators as a first steptowards obtaining permits for construc-tion of a US$7.8 billion, 1,600-milepipeline.

“The evidence keeps piling up thatthat’s (ExxonMobil’s) plan,” he toldCanada’s National Post newspaper.

Imperial pulling out stops

Neither ExxonMobil nor Imperial presi-dent and chief executive officer Tim Hearnis getting drawn into that speculation.

The nearest hint offered by Hearn onSept. 10 was contained in his comment: “Ibelieve ultimately market forces will pre-vail in this whole process.

“There is no reason why Alaska gasshouldn’t come to market, but I think if youlook at the proposal for our project, whichbuilds on a lot of the existing infrastructureand is of the size and nature that would beamenable to the marketplace, it just seemsthat the project should go ahead now.

“That is why we are trying to pushahead and we think the window is appro-priate,” he said.

But there is no doubt that Imperial ispulling out all the stops to get theMackenzie Delta project before regulators.In Hearn’s words: “I’d like you to knowthat every effort is being made to advancethis project as quickly as possible,” he tolda Peters & Co. energy investment confer-ence in Toronto Sept. 10.

Setting 2007 as a start-up date allows noroom for delays in the daunting task ofdealing with 13 regulatory agencies inCanada and obtaining about 300 permits.

Imperial, with Hearn noting that the

government has been “stellar” in workingwith the Delta producers’ consortium,hopes it can work through that maze in 24to 30 months and Natural ResourcesMinister Herb Dhaliwal has signaled hisbelief that such a target is “realistic.”

2007 too aggressive?

Others think Imperial is reaching high. Roland George, a principal with oil and

gas consultant Purvin & Gertz Inc. said2007 is “as aggressive a timeline as I’veever heard” and is contingent on no seriousroadblocks emerging.

Kevin O’Reilly, research director forthe Canadian Arctic Resources Committee,described the 2007 target as enormouslyoptimistic, given the “plethora” of boardsand agencies who will be involved inreviewing the proposal.

Aside from mandated federal legisla-tion, there are “constitutionally entrenchedprovisions of (aboriginal) land claimsagreements ... (and) there’s no way to getaround them.”

O’Reilly said it would take three to fouryears to complete the regulatory process,still leaving the construction phase, whichhas been calculated at a minimum threeyears.

Even Northwest Territories ResourcesMinister Jim Antoine was careful to notethat fast-tracking would require the full co-operation of many interested parties in theNorthwest Territories.

But Antoine welcomed the signal fromImperial, saying that Canada’s largest inte-grated oil company appeared “more firmlycommitted now than ever to build aMackenzie Valley stand-alone natural gaspipeline.”

Signals in waves

In fact, the signals have been coming inwaves this summer.

In late June, the Delta producers held anon-binding open season to assess theinterest level from all Delta E&P compa-nies in obtaining space on a MackenzieValley pipeline. Excluding the lead consor-tium’s four members, expressions of inter-est were registered by 16 companies andImperial is now engaged in a follow-upphase to get a more reliable reading on thetotal volumes nominated.

Last month, it emerged that the Deltaproducers had moved things up anothernotch, giving pipeline companies untilmid-September to submit ideas and con-cepts hat could add value to the regulatoryapplications.

Industry sources say Enbridge Inc.,TransCanada PipeLines Ltd. and DukeEnergy Corp. through its Canadian sub-sidiary found themselves at full stretch tomeet the deadline, although all three havedeclared their strong desire to take owner-ship and/or operator roles in such a project.

Given the fast pace of events, and withthe ExxonMobil-Imperial powerhouseapparently so resolutely at the controls,this is no time to doze off. ◆

THE REST OF THE STORY/ARCTIC GAS12 Petroleum News • Alaska Week of September 22, 2002


ANALYSIS “I’d like you to know that everyeffort is being made to advance this

project as quickly as possible.” —Tim Hearn, president and CEO,ExxonMobil-controlled Imperial Oil

Ltd.


PIPELINES & DOWNSTREAM


WASHINGTON, D.C.Conference committee reachesagreement on pipeline safety

House and Senate negotiators have reached agreement on a planto increase inspection requirements for the nation’s aging pipelinenetwork. The compromise clears the way for the pipeline safety pro-vision to be included in a broad energy bill, although major dis-agreements remain over other parts of the energy package. Its finalapproval by Congress remains in doubt as Congress races towardadjournment this fall. Pipeline safety advocates have pushed for abill regulating the nation’s 2.2 million miles of pipeline since a 1999explosion killed three people in Bellingham, Wash. An August 2000explosion killed 12 people in Carlsbad, N.M., and two more peoplewere killed in pipeline accidents last year.

The agreement reached Sept. 12 would require pipeline inspec-tions at least once in the next 10 years and every seven years afterthat. Some pipelines in “high consequence” areas near large popula-tion centers would be inspected more frequently.

The House and Senate negotiators also agreed on extending a1954 law that limits the financial liability of nuclear power plantoperators in event of a major accident.

Attempts by Rep. Edward Markey, D-Mass., to include a series ofmeasures aimed at increasing nuclear power plant security weredefeated. Among the proposals was one to improved tracking andbackground checks on people who transport nuclear material andanother that would have required the Nuclear RegulatoryCommission to speed up its revamping of security requirements forreactors sites.

The House defeated the Markey proposals after Senate negotia-tors argued the security measures were best dealt with as part of aHomeland Security bill. The 1954 law limits industry liability to $9.5billion in any nuclear accident with the government picking up thetab costs above that.

The pipeline agreement would increase fines for companies thatviolate safety laws, improve operator qualifications and providewhistleblower protections for employees who report problems.

It also would allow state oversight of pipelines and authorize $100million for research and development to improve pipe quality, mate-rials inspection and security. At least $6 million would be set asidefor local emergency responders to train and prepare for pipeline acci-dents. Sen. Pete Domenici, R-N.M., hailed the agreement and saidCongress should push to ensure that inspections are done on a time-ly basis.

“My priority is to see that the government works with industry tosee that inspections and repairs are made quickly so we might neveragain see a tragedy like we had in Eddy County a few years ago,”said Domenici. Rep. Rick Larsen, D-Wash., whose district includesBellingham, said he was pleased Congress finally appeared ready toapprove new pipeline safety requirements.

“Year after year, pipeline safety improvements have been shotdown by Congress. Finally, public interest is prevailing,” he said.

The House approved a pipeline safety bill in July, while theSenate approved a similar measure last year. Negotiators still mustwork out a host of other issues on the complicated energy bill beforefinal votes are taken.

—Matthew Daly Associated Press Writer

■ S T A T E W I D E

Both Norton, Pourchot opposeoil pipeline watchdog groupU.S. Department of Interior, Alaska Department of Natural Resources headsexpected to sign off on rights of way renewal for trans-Alaska pipeline this year

By The Associated Press

Both Pat Pourchot, commissioner of the AlaskaDepartment of Natural Resources, and GaleNorton, secretary of the U.S. Department of theInterior, have come out in

opposition to creation of a citi-zens watchdog group to over-see operations of the trans-Alaska oil pipeline.

Pourchot and Norton are thetop state and federal officialswho later this year are expectedto sign off on a 30-year renew-al of the pipeline right of wayover state and federal landsbetween Prudhoe Bay andValdez.

Pourchot said Sept. 16 that he opposes the ideabecause it would not appreciably improve existingregulatory oversight of the pipeline.

Secretary of the Interior Gale Norton said Sept. 10that a citizens’ panel to oversee the trans-Alaska oilpipeline is not needed.

“What I’ve heard from the Interior (Department)people in Alaska is that the new proposal duplicatessome of things we’re already doing with publicinput,” Norton told reporters Sept. 10. “They feel thatworking through the existing processes would be bet-ter than creating a new process.”

Some environmental and oil watchdog groups saythey want a citizens group, similar to the regional cit-izens advisory councils created by Congress after the1989 Exxon Valdez oil spill. The proposal was madeas state and federal regulators held hearings on therenewal of the pipeline rights of way across federaland state lands. The oil companies that own the linehave applied to extend their use for another 30 yearsbeyond the January 2004 expiration.

Alyeska Pipeline Service Co., which operates thepipeline for oil company owners, contributes about$2.5 million of the Prince William Sound CitizensAdvisory Council’s $3.2 million budget.

Advocates say oversight a mustfor 25 year old line

A draft environmental impact statement on the fed-eral right-of-way renewal, issued in early July, saidthe government recommends extending the pipelineright of way for another 30 years. None of the alter-

natives in the draft document proposed a new citizens’council for the pipeline, though.

Joint Pipeline Office spokesmen said earlier thissummer that the government already keeps a close eyeon the line. The joint federal-state JPO includes sevenstate and six federal regulatory that monitor all aspects

of pipeline operation, fromengineering to impact onwildlife.

Supporters of a citizensreview panel say it would pro-vide oversight akin to that pro-vided by the nonprofit PrinceWilliam Sound RegionalCitizens’ Advisory Council,which watches over the Valdeztanker port. The supporters sayadditional oversight is needed

more than ever now that the 25-year-old pipeline isshowing significant age.

JPO “not a shoestring deal”

Pourchot said he has faith that the line is closelywatched by the JPO.

“It’s not a shoestring deal,” Pourchot said. “It’s nota superficial effort. It’s a comprehensive, ongoingmonitoring, inspection and enforcement program.They employ engineers and people who look at com-plex systems.”

Pourchot said a new citizen review panel likelywould cost $2 million in $3 million in oil companymoney for little benefit over what the JPO provides.The JPO has the power to issue work orders to thepipeline’s six oil company owners and routinely does,he said.

If citizens want more input in JPO activities, oneway to do it might be to better publicize the agency’sexecutive committee meetings and possibly hold themat different locations around the state, Pourchot said.Meetings of the executive committee, made up of topofficials from member JPO agencies, make timeavailable for public comment, he said.

Steve Jones, director of right-of-way renewal forthe pipeline owners in Anchorage, also said this sum-mer that existing government oversight is thorough.

“The JPO has day-to-day access to all of our peo-ple and facilities and records, and their records in turnare public,” Jones said. A proposed citizens oversightpanel he said, “doesn’t really add anything to usexcept cost.” ◆

Pat Pourchot, stateDNR commissioner

Gale Norton, secre-tary of the Interior

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Finance Manager needed forgrowing service company. Jobduties include daily activities ofdata input, maintaining account-ing systems for project delivery,communicating financial infor-mation to senior management,and supervising accountingstaff. Great Plains Software andoil industry experience desired.Degree in accounting and 10years experience preferred.Please submit resume andsalary history to: Kakivik AssetManagement, Suite #3Anchorage AK 99518 [email protected]. EOE

Confined Space $15.00Anchorage-based remediationcompany seeks candidates withcerts in Hazmat / Hazwop /Confined Space. Temporary toPerm positions avail. CallJennifer Paul @ Personnel Plus:563-7587 No fees

Class 'A' CDL Driver Oilremediation Company seeksapplicant. Hazmat cert; vactruck experience would be pre-ferred. $17.00 + DOE call forinterview. 563-7587

Alaska Steel is seeking anOutside Salesman to cover theAnchorage area. Outside salesexperience and metals knowl-edge a plus. We offer a compet-itive salary and excellent bene-fits. Please send your resume to1200 West Dowling, Anchorage,AK 99518

AccountManager/Industrial Sales -Leading full-line distributor ofprocess control equip in Alaska& NW is looking for add'l techni-cal sales person for Alaskaregion. Exp. in process controlsindustry & Engineering Degree aplus. Position will introduce &sell new products, as well assupport installed base of equip.Office based in Anchorage.Base salary DOE, add’l perfor-mance bonus, medical/dentalbenefits, 401k with match, carallowance available. Sendresume to PCE Pacific, 1916 -220th St. SE, Bothell, WA98021, fax (425) 487-1114, [email protected]

Well Testing OperatorResponsibilities include to accu-rately control, monitor andrecord produced volumes (oil,gas & water) through surfaceand down hole equipment.

Operator will continuously moni-tor & record Wellhead andDownhole Pressures andTemperatures and analyze theproduced fluids as and whenrequired. Skills Needed: TheTest Operator works in ademanding environment and willoperate equipment and acquiretest data. Well Testing equip-ment can vary between perforat-ing guns, downhole tools, down-hole electronic gauges or asmall production facility. This jobrequires excellent team spirit,the ability to work independentlyas required, a capacity to workunder pressure and a willing-ness to work outdoors in allweathers. Education: Diploma inMechanics or BS in Engineering,Physics or Earth Sciences.Experience: Minimum of 2 years

experience Location: WyomingSalary: Competitive anddepends on experience For con-sideration, email resume andsalary history to GEOTEMPS [email protected]. Wire LineOperator Wire Line personnelperforms well completion, main-tenance and servicing. Operatoris responsible for putting inplace or removing down holetools (gauges, safety valves,BCS, etc.). They must have abroad working experience ondifferent down hole tools andvalves. Experience: Minimum oftwo years Location: WyomingSalary: Market rates For consid-eration, please email resumeand salary history to [email protected]. Sr. Accountant Position:Industry: exploration and pro-

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Consultants

Employment

Doyon Drilling, Inc. is currently accepting resumes for Electricians, Pitwatcher(Solids Operator), and Mechanics. Doyon Drilling, Inc. accepts resumes fromindividuals with direct on or off shore drill rig experience at the floorhand leveland above. You may fax, mail or e-mail your complete resume to our Human

Resources Department. Our mailing address is: Doyon Drilling, Inc., 101 W. Benson Blvd., Suite 503,Anchorage, AK 99503 Phone: 907-563-5530, Fax: 907-561-8986, Email: [email protected] should be in one of the following standard formats: Microsoft Word (Windows) or RTF.Resumes should contain a listing of employment experience on oil and gas drilling rigs and shouldhave a minimum of three verified references. Other application paperwork will be provided at the timeof hire.Electricians: Summary: Installs, maintains and repairs drill rig electrical systems, apparatus and elec-trical and electronic components of drill rig machinery and equipment. Essential Duties: Maintains andrepairs the electrical and electronic equipment associated with drill rig top drives, draw works, ironroughnecks, SCR's AC motor controllers, DC motors, AC generators, air conditioners PLC's and oil-field mud and gas monitoring systems. Installs power supply wiring and conduit for newly installedmachines and equipment such as mud pumps, motors and conveyors.Pitwatcher (Solids Operator): Summary: Performs drilling fluid mixing operations, drilling fluidproperty sampling, monitoring of well bore returns, maintenance of mud pumps and drilling fluid cir-culation system. Essential Duties: Maintain drilling fluid solids control and circulation equipment, Carryout routine drilling fluid property sampling, Mixing of drilling fluid chemicals and maintenance of drillingfluid properties, Cleaning and maintenance of rig drilling fluid pits, Follow DDI and customer operat-ing and reporting procedures, Maintain clear communications with relief, mud engineer, Derrickmanand Driller.Mechanics: Summary: Responsible for the operability, maintenance and repair of all drill-rig relatedmachinery and support equipment such as engines, motors, pumps, winches, pneumatic tools andconveyor systems as directed by the rig toolpusher. Essential Duties: Works on the following: Drill rigtop drive systems, Drill rig draw work systems, Drill rig mud pumps, SCR systems, Caterpillar andDetroit Diesel engines, Allison transmissions, air conditioners, glycol, hydraulic and pneumatic sys-tems, Drill rig heating and heat distribution systems including boilers and fans.

ACCT/INDUSTRY SPECIALIST Job Overview: Position is responsible forexpanding & accelerating the penetration of the 3M Oil & Gas product linecalling on all segments of the industry (exploration, production, transporta-tion, refining & retail) i.e. providing solutions for the Oil & Gas markets.Primary focus: call on end users to promote the use of 3M products. Provideend user seminars & product presentations to promote awareness of 3M

solutions at key accounts & generate 3M product specifications into projects. Manage existing enduser accounts by offering solutions to solidify existing business. Identify new opportunities, quantify,prioritize & close the sale. Work closely with 3M domestic & international colleagues to increase enduser penetration. Act as a liaison between customers & divisions. Support 3M sales reps & distribu-tor sales reps through training on products, markets & applications; joint sales calls at key end useraccounts; & participation at seminars/trade shows. Provide strategic information to management.Position will be based in Anchorage, Alaska. Position is full time, salary + commission. Compensationis competitive and based on experience. Skills & Qualifications: Position requires a minimum of 5 yearsindustry experience & a BS degree in an engineering or related discipline. Oil & Gas industry knowl-edge & experience is very desirable. Applicant should be familiar with the product commercializationprocess, have a successful history of new product launches, be results-oriented, & have excellent writ-ten & oral communication skills. The position requires a highly creative hands-on person who can workwith customers & 3M personnel to transfer customer needs into product solutions with minimal super-vision. The person should be a strong team player who has the ability to energize creativity in others& can interface with a diverse global team. Strong computer skills a must. Mail resume to: Oil/GasManager, 3M Alaska, 11151 Calaska Circle, Anchorage, AK 99515. 3M is an equal opportunityemployer M/F/D/V .

CLASSIFIEDSPetroleum News • Alaska 14Week of September 22, 2002

time. Location: NevadaInterested candidates, pleasesend resume to [email protected].

Petroleum News Alaska is seek-ing an experienced circulationsales representative.Position is FT, based inAnchorage. Personality is a plus!Submit your resume by email toDan Wilcox at [email protected].

Alaska Oil and Gas PartnersIndependent Oil Company look-ing for professional & experi-enced personnel in all aspects ofOil & Gas industry in Alaska.Including: Landmen,Geologists, Geophysicist,Drillers, and other related posi-tions. Please forward yourresume to 1420 N. Atlantic Ave.,#302, Daytona Beach, FL32118, Attn: Human ResourcesDept. Ph: 386-257-9415 [email protected]

CIVIL ENGINEER Seeking self-motivated civil engineers with 5 – 10 years of utility, airfield,and/or road design experienceto work on unique projectsthroughout AK. Successfulapplicants will be responsible fordesigning urban and remote pro-jects. Rural experience a plus.Applicants must be registeredcivil engineers (P.E.) in at leastone state, and capable of regis-tration in Alaska. Salary range:$50- $85 K DOE per year.CIVIL ENGINEERINGDESIGNER/ DRAFTINGTECHNICIAN Seeking self-motivated civil engineeringdesign/drafting technician withat least 2 years AutoCAD expe-rience in a civil engineering envi-ronment. $12-$22 per hour tostart DOE. The benefits pack-age for the above jobs includes:3 weeks paid vacation per year,12 paid holidays per year, excel-lent medical/dental/vision/dis-ability, and 401 (k) with matchingcontributions. Our corporate cul-ture reflects a casual workingenvironment amongst a team ofworking professionals. Pleasesend your resume or directinquiries to: LCMFIncorporated; 139 East 51stAvenue; Anchorage, AK; [email protected] (907) 273-1848; Toll Free: (800) 955-1830; Fax: (907) 273-1831

Avalon Development is seek-ing personnel interested in antic-ipated 2002 field positions.These are no-nonsense geologyoriented field positions in remotecamps. Positions are as follows:Senior Geologists: +5 yearsexperience, Alaska experience

preferable, expertise in PGE,Rare Metal or gold explorationrequired. Salary DOE. JuniorGeologists: Bachelors degreein Geology required, Alaskaexperience preferable, experi-ence in PGE, Rare metal or goldexploration helpful. Salary DOE.Geotechnicians: Experiencein gridding, sampling, powerauger drilling drill sampling andGPS navigation preferable.Salary DOE If you are interestedin learning more aboutEmployment opportunities inAlaska with AvalonDevelopment, submit a resumealong with references. Resumesmay be emailed to:[email protected], Faxed to907-455-8069 or mailed toAvalon Development, attn: AV-Jobs2002, PO Box 80268,Fairbanks, Alaska 99708

All oil jobs Canada-wide.Over 1,000 job possibilities.Many types of positions avail-able. http://www.jobs-canada.ca403-394-1706

Udelhoven Current ImmediateOpenings: 4 NICET level 2 and3 Certified Technicians. WorkSite: North Slope send resumesto [email protected] we are alwaysaccepting applications forinclude: Administrative, cleri-cal, As built, Material Handler,Carpenter, Electrician, ElectricalInspector, Engineer, EquipmentOperator, FCO Technician,HVAC, Instrument Technician,Laborer, Millwright, NICET,Operator, Pipe fitter, Plumber,Project Control, ProjectManager, Quality Assurance,Safety, Surveyor, Welder.Please e-mail your resume to:[email protected] orfax to: (907) 522-2541 Attention:Lisa

WASTE OIL INTO FREE HEATWaste oil furnaces, heaters, &boilers. NuERA Corp. Servingyou since 1984. 1-800-347-9575.

Car, Van, & Truck RentalsV.I.P. rates. Located atAnchorage International AirportCall 907-279-2000, 1-800-421-7456. We will treat you like fam-ily!

North Slope gas production skidfor sale. Formerly used for earlyEndicott fuel gas supply.Truckable module, located inDeadhorse. E-mail:[email protected].

HEAVY CONSTRUCTIONEQUIPMENT FOR LEASECAT 245 Excavator, CAT D5BDozer, GROVE 25 ton HydraulicRT Crane, CASE 621B Loader,KELLY EQUIPMENT CO.907-566-2290

Alaska Independent needsoperator to explore and devel-op prime North Slope/Cook Inletprospects. Call Rick 907-456-2300 or email [email protected].

STATE OF ALASKAAnnounces Two Oil and GasLease SalesThe Alaska Division of Oil andGas (DO&G), will conductNORTH SLOPE AREAWIDEand BEAUFORT SEA AREAW-IDE competitive lease sales onOCTOBER 23, 2002 inAnchorage, Alaska.North Slope Areawide 2002Bidding Method: C a s hbonus – $10/acre minimum bidon all tracts. Fixed Royalty Rate:12.5% on tracts below T7N, 16-2/3% on most tracts aboveT6N, Sliding scale royalty on 5tracts along the Colville R. Termof lease: 7 years on all leases.Beaufort Sea Areawide 2002Bidding Method: Cash bonus –$100/acre minimum bid on tract79; $10/acre on all other tracts.Fixed Royalty Rate: Set at12.5% and 16-2/3%, depend-ing on location. Term of lease:10 yrs. and 7 yrs., depending onlocation. Visit www.dog.dnr.state.ak.us/oil/ forsale announcements, instruc-tions to bidders, bid forms, andregional tract maps. If unable toaccess this information, contactSuzanne Gaguzis, (907) 269-8803, email at [email protected] PUB. DATE: 7/30/2002

Looking for partners for fiveprospects in Cook Inlet -Astosch-Tutna, Corsair, OlsonCreek, Valkyrie, Viggen. Seewww.forestoil.com for someprospect information. Click onthe Banc of America SecuritiesPresentation, June 18 PDF file,and then go to page 16. Contact:Jim Arlington, Land Manager, at jdar l ington@forestoi l .com.Serious inquiries only.

CAREERS AT VECO Principal Design Specialist- Anchorage, Alaska RecruitingAuthorization No. 825 One opening for an individual with fifteen (15) years related experi-ence as a Mechanical/Piping or I&E designer to lead well tie-in design projects. Must beproficient in AutoCADD. Working knowledge of Rebis a plus. Oversees the implementa-tion and completion of all phases of assigned projects. Works with Project Engineer,

clients, and discipline leads to develop scope, schedule and budget. Acts as the focal point for multi-dis-cipline technical issues. Provides conceptual input to projects during the planning stages, including P&IDdevelopment, unit locations, equipment layout, and conceptual piping studies. Provides technical guid-ance and reviews completed assignments for compliance with engineering principles, company stan-dards, and client specifications. Supports field assignments and leads field walk-downs as required.Requires strong organizational, interpersonal and communication skills. Familiarity with well tie-in con-struction and maintenance techniques required. Working knowledge of BP standards, drawings, spec-ifications, and MOC process a plus. Cold regions experience a plus. North Slope travel required.Position reports to the VECO BP Project Manager. Anchorage Based. Regular Full Time ExemptPosition. Position open until filled. HRIS/Benefits Coordinator - Anchorage, Alaska RecruitingAuthorization No. 821 Reviews data entry into the company's HRIS system and regularly audits data foraccuracy and completeness. Generates and validates data used for various company reporting require-ments such as EEO-1, VETS-100, Service Award programs, benefits eligibility, open enrollment, etc.Evaluates additional or new system requirements, makes recommendations to management for enhance-ments and coordinates changes across multiple companies and locations. Creates reports withMicrosoft Access or Crystal Reports. Understanding of OLAP cubes a plus Provides user support onHRIS system and produces documentation for HRIS processes. Must posses excellent analytical and-communication skills and be able to take a leadership role with respect to the HRIS system.Requires theability to prioritize multiple tasks and successfully execute projects. Bachelor's degree, preferably in arelated field and 3-5 years of progressively responsible experience in HR, Benefits, Accounting or IT. Thisis a full-time, regular position located in Anchorage. Fire & Gas Technician - Prudhoe Bay, AlaskaRecruiting Authorization No. 1335 Summary: Installs, maintains, calibrates and adjusts fire and gasdetection systems, instrumentation and instrument lops. Essential Functions: Calibrates and adjusts,repairs and installs fire alarms and gas detection systems. Interprets test data. Performs functional test-ing including the interface to process control and shutdown systems. Uses and maintains tools andequipment employed to perform calibration testing (precision regulators and test gauges, volt-ohm meter,potentiometers, thermocouple calibrator, signal generator, leak detection unit oscilloscope and manu-facturers specialized test equipment; i.e. Pyrotronics SU-9 calibrators. Routinely performs safety and pro-ductivity observations; shop, field, and vehicle inspections and is required to attend various componentsof technical, developmental and safety training. Must demonstrate support for the company’s environ-mental management system objectives. Qualifications: Five (5) years experience as a process instrumenttechnician or electrician in the oil or chemical industry and two (2) years of related technical/vocationaltraining preferred. Must be able to work as part of a team; communicate effectively with fellow workersand alternate; and demonstrate adherence to established safety policies and procedures. Must haveknowledge of ISA Standards as well as the functional operations and adjustments of the various com-ponents of instruments and instrument loops such as controllers, transmitters, and level indicators; cali-bration; and trouble shooting instrument loops and loop tuning. Must have experience reading and inter-preting drawings, specifications, vendor data, and technical data sheets. Must demonstrate knowledgeof OSHA safe work practices associated with instrument power voltages; programmable controllers anddistributed control systems; and fire and gas alarm and shutdown systems as related to explosion proofatmospheres. Electronics skills a plus. Driver’s license required (note that this requirement may bewaived at the company’s discretion for employees hired on a temporary basis). Must possess AlaskaState licenses 1B in Fire Alarms and IIIA in Special Hazards (and corresponding NICET certifications).Note: Skills tests may be required of new hires to demonstrate core proficiencies, or of existing employ-ees to advance to a new job level. Physical Requirements: The physical demands described here arerepresentative of those that must be met by an employee to successfully perform the essential functionsof this job. Reasonable accommodations may be made to enable individuals with disabilities to performthe essential functions. MOBILITY: Employee frequently required to stand; walk;reach with hands andarms; climb or balance; and stoop, kneel, crouch or crawl. The employee is occasionally required to sit.Must be able to work from ladders and scaffolds to access instrumentation. FINE MOTOR SKILLS:Frequently required to use hands and fingers with sufficient dexterity to perform close, exacting andrepetitive tasks. HEARING: Must be able to hear audible safety alarms and warnings. VISUAL ACUITY:Specific vision abilities required by this job include close vision. Vision must be adequate to performabove listed tasks in a safe manner. LIFTING: The employee must regularly lift, pull and /or move up to40 pounds, and occasionally lift and /or move up to 70 pounds. COMMUNICATION SKILLS: Must dis-play ability to read and understand job descriptions, safety/technical manuals and safety/warning signs.Must display sufficient oral communication skills to be able to give and receive oral safety warnings,instructions, and task assignments. ENVIRONMENT: While performing the duties of this job, the employ-ee is frequently exposed to severe arctic weather conditions. The employee is frequently exposed to high,precarious places, confined spaces, and the risk of electrical shock. May be required to work with toxicor caustic chemicals. DISCLAIMER: The above description covers the principal duties and responsibil-ities of the job, specific to, and intended for, VECO Greater Prudhoe Bay projects only and may or maynot reflect general duties and responsibilities on other VECO projects. This description should not beconstrued as a complete listing of all duties that may be required. This is a Regular Full time positionlocated in Prudhoe Bay,Alaska, with a rotation of 2 weeks on 2 weeks off. Please submit your resumeto: VECO Corporation Alaska Region Attn: Ken Sigurdson 6411 A Street, Anchorage, Alaska 99518USA Phone: (907) 277-5309 Fax: (907) 550-8890 Email Resume to: [email protected] or fax (907)762-1040 VECO Corporation Job Website: www.veco.com. Please quote the Job Title and RecruitingAuthorization No. (if applicable) in all correspondence. VECO Corporation is an Equal OpportunityEmployer that Supports a Diverse Workforce. Positions Require U.S. Work Authorization.

PNA CLASSIFIEDSPetroleum News • Alaska 15Week of September 22, 2002

InvestmentOpportunities

Leases/ProspectsAvailable

Equipment

Legal Notice

STATE OF ALASKA Announces TwoOil and Gas Lease Sales The Alaska Division of Oil and Gas (DO&G),will conduct NORTH SLOPE AREAWIDEand BEAUFORT SEA AREAWIDE competi-tive lease sales on OCTOBER 23, 2002 inAnchorage, Alaska.North Slope Areawide 2002 BiddingMethod: Cash bonus – $10/acre minimumbid on all tracts. Fixed Royalty Rate: 12.5%on tracts below T7N, 16-2/3% on mosttracts above T6N, Sliding scale royalty on 5tracts along the Colville R. Term of lease: 7years on all leases.Beaufort Sea Areawide 2002 BiddingMethod: Cash bonus – $100/acre mini-mum bid on tract 79; $10/acre on all othertracts. Fixed Royalty Rate: Set at 12.5% and16-2/3%, depending on location. Term oflease: 10 yrs. and 7 yrs., depending on loca-tion. Visit www.dog.dnr.state.ak.us/oil/ forsale announcements, instructions to bid-ders, bid forms, and regional tract maps. Ifunable to access this information, contactSuzanne Gaguzis, (907) 269-8803, email [email protected]. Published: 7/30/02.

PNA CLASSIFIEDS16 Petroleum News • Alaska Week of September 22, 2002

Legal Notice

Notice of Public Hearing STATE OFALASKA Alaska Oil and Gas ConservationCommission Re: Pioneer Unit, Matanuska –Susitna Borough Sections 1 and 2, T17N,R3W, Seward Meridian Affected Leases: Feeacreage, State of Alaska ADL 374121Evergreen Resources (Alaska) Corporation bye-mail application dated and receivedSeptember 7, 2002 has applied for an orderallowing spacing exceptions in accordancewith 20 AAC 25.055 (a) (2) and (a) (4) for thecompletion and production of four vertical gaswells within 3,000 feet of each other, within1,500 feet of a property boundary and withinthe same governmental section. D.L. Smith No.1 Surface Location: 3293 feet FNL and 293feet FWL, Section 1, T17N, R3W, SM BottomHole Location: Same Gary & Jo AnnStromberg No. 2 Surface Location: 1386 feetFNL and 933 feet FWL, Section 1, T17N,R3W, SM Bottom Hole Location: Same RobertL. Smith No. 3 Surface Location: 3272 feetFSL and 606 feet FEL, Section 2, T17N, R3W,SM Bottom Hole Location: Same CornhuskerNo. 4 Surface Location: 2426 feet FNL and141 feet FEL, Section 2, T17N, R3W, SMBottom Hole Location: Same The Commissionhas tentatively set a public hearing on this appli-cation for October 15, 2002 at 9:00 am at theAlaska Oil and Gas Conservation Commissionat 333 West 7th Avenue, Suite 100,Anchorage, Alaska 99501. A person mayrequest that the tentatively scheduled hearingbe held by filing a written request with theCommission no later than 4:30 pm onSeptember 27, 2002. If a request for a hearingis not timely filed, the Commission will considerthe issuance of an order without a hearing. Tolearn if the Commission will hold the publichearing, please call 793-1221. In addition, aperson may submit written comments regard-ing this application to the Alaska Oil and GasConservation Commission at 333 West 7thAvenue, Suite 100, Anchorage, Alaska 99501.Written comments must be received no laterthan 4:30 pm on October 11, 2002 except thatif the Commission decides to hold a publichearing, written comments must be receivedno later than 9:00 am on October 15, 2002. Ifyou are a person with a disability who may needa special modification in order to comment or toattend the public hearing, please contact JodyColombie at 793-1221 before October 1,2002. Cammy Oechsli Taylor Chair, Alaska Oil& Gas Conservation Commission PublishedDate: September 15, 2002

Legal Notice

Notice of Public Hearing STATE OFALASKA Alaska Oil and Gas ConservationCommission Re: Pioneer Unit, Matanuska –Susitna Borough Section 30, T18N, R1W,Seward Meridian State of Alaska AffectedLease: ADL 384685 Evergreen Resources(Alaska) Corporation by e-mail applicationdated and received September 7, 2002 hasapplied for an order allowing spacing excep-tions in accordance with 20 AAC 25.055 (a)(2) and (a) (4) for the completion and produc-tion of four vertical gas wells within 3,000 feetof each other, within 1,500 feet of a propertyboundary and within the same governmentalsection. Cook No. 1 Surface Location: 991 feetFSL and 888 feet FEL, Section 30, T18N,R1W, SM Bottom Hole Location: Same LowellNo. 2 Surface Location: 967 feet FSL and1329 feet FEL, Section 30, T18N, R1W, SMBottom Hole Location: Same Bering No. 3Surface Location: 1523 feet FSL and 471 feetFEL, Section 30, T18N, R1W, SM BottomHole Location: Same Baranoff No. 4 SurfaceLocation: 504 feet FSL and 423 feet FEL,Section 30, T18N, R1W, SM Bottom HoleLocation: Same The Commission has tentative-ly set a public hearing on this application forOctober 15, 2002 at 9:00 am at the Alaska Oiland Gas Conservation Commission at 333West 7th Avenue, Suite 100, Anchorage,Alaska 99501. A person may request that thetentatively scheduled hearing be held by filing awritten request with the Commission no laterthan 4:30 pm on September 27, 2002. If arequest for a hearing is not timely filed, theCommission will consider the issuance of anorder without a hearing. To learn if theCommission will hold the public hearing, pleasecall 793-1221. In addition, a person may submitwritten comments regarding this application tothe Alaska Oil and Gas ConservationCommission at 333 West 7th Avenue, Suite100, Anchorage, Alaska 99501. Written com-ments must be received no later than 4:30 pmon October 11, 2002 except that if theCommission decides to hold a public hearing,written comments must be received no laterthan 9:00 am on October 15, 2002. If you area person with a disability who may need a spe-cial modification in order to comment or toattend the public hearing, please contact JodyColombie at 793-1221 before October 1,2002. Cammy Oechsli Taylor Chair, Alaska Oil& Gas Conservation Commission PublishedDate: September 16, 2002 ADN AO#02314011

North Slope Oil OpportunityProspect just north of theKuparuk River Unit. Analysis of3-D seismic indicates Kuparuk Aand C sand potential of 20 mil-lion or more barrels. Can bedrilled as tract operation fromexisting KRU Drillsite with yearround permanent gravel roadaccess. Facility and infrastruc-ture access negotiations wellunderway. Contact Jim Weeksat: [email protected]

AVCG looking for qualifiedpartners for 104,000 acres onNorth Slope. Call Bo 316-263-2243.

Alaska oil and gas leases,North Slope 17,500 acres,Cook Inlet Basin, 8,000 acres.Proven reserves, permitting inprogress. Call 907-452-5149,fax 907-452-5203.

9th Annual InformationTechnology Expo & Conferencehttp://www.sourdough.net/events/itbe/index.html Where you areon October 1-2 could determinewhere you will be for years tocome! October 1-2 o 10:00 amto 6:00 pm Egan Center o 555W. 5th Ave Anchorage, Alaska

FREE admission on www.sour-dough.net ALL the industryheavyweights - National repre-sentatives of Apple, Cisco, Dell,HP, Microsoft, Citrix , Veritas,and over one hundred other lead-ing national and Alaskan compa-nies. Show Management 907-277-7469

Alaska Miners AssociationAnnual Convention and TradeShow Sheraton Hotel,Anchorage, Alaska ,November 4- 8, 2002 Short Courses Nov 4- 5, 2002 Technical Sessionsand Trade Show, Nov 6 - 8,2002 Convention: Suppliers tothe mining industry are repre-sented at the Trade Show. TheTechnical Sessions cover aspectrum of topics, includinghighlights in 2002 explorationactivity in Alaska, issues affect-ing Alaskan miners and more.Gem & Mineral Show: Nov 8,Friday, 4:00 - 8:00 pm and Nov9, Saturday, 10:00 - 6:00 pm.FOR MORE INFORMATION :Web Site: w w w . a l a s k a m i n e r s . o r [email protected] AlaskaMiners Association 3305 ArcticBlvd., Suite 202 Anchorage, AK99503 TEL (907) 563-9229FAX (907) 563-9225

IADC annual meeting Mark

the date for the annual meetingof the International Associationof Drilling Contractors, Sept. 25-27, in the Hyatt Regency Hotel,123 Losoya St. on theRiverwalk, San Antonio. Thisevent is the premiere gatheringof drillers and drilling servicecontractors throughout theworld. Conference fee is $500.Contact Leesa Teel 281-578-7171 ext 21 ([email protected]) for moreinformation or to make anadvanced reservation.

Alaska Support IndustryAlliance events:R.S.V.P (907) 563-2226Monday, September 23:Alliance Annual MeetingSpeaker: The HonorableSpencer Abraham, Secretary ofEnergy at Sheraton AnchorageHotel 6:00-9:30p.m.Thursday, September 26:Alliance Breakfast Forum.(Speaker TBD). PetroleumClub. 7:00 a.m. Cost:$13.00/member or $15.00/non-member.Thursday, October 17:

Luncheon 12:00-1:00 p.m. AtAnchorage Hilton Hotel. Guestspeaker Kevin Meyer, ConocoPhillips: A Global Perspective Friday, January 24, 2003:Meet Alaska 2003 at SheratonAnchorage Hotel. Plan for a day-long conference! For informa-tion/registration, please call(907) 563-2226

Long Term And Transient OfficeSpace At The DeadhorseAirport. Strategically located onthe Tarmac, Conference Room,Multi-Office Suites, TrainingArea, Break Room, CopyFacilities, Limited Yard Space,Passenger Waiting Area , NewHanger Facility, Large SingleOffices With Private Bath, NewHanger Facility Completion Date9/1/02 Perfect Location ForLogistics Support, EnvironmentalAnd Permitting For Remote SiteProjects Contact Kevin Starnesat 907-659-2398 or Tom Hendrix907-276-7797. Perfect LocationFor Logistics Support,Environmental And Permitting

For Remote Site Projects

Class A offices avail. bymonth or longer. Incl. phone,recept, & much more. Fax andinternet. Single offices from$500 View suites avail. PacificOffice Center: 877.264.6600.

Join us for the fly fishing trip ofa lifetime! We specialize in guided flyfish-ing and multi-day river campingtrips with gourmet river cuisine.Float trips are in the pursuit ofrainbow trout in the upperSusitna Valley, on rivers likethe Talkeetna, Willow Creek,and more. We also enjoysalmon fishing for reds and sil-vers on the Russian River, onthe Kenai Peninsula. We offer custom-designedtrips for all of our guests.Whether it's a day trip, or a 5-day fly-in fishing trip, we canarrange the trip that's right foryou. The best time for fishing isfrom May til October, with peaktrout opportunities during eachsalmon run.

"Float trips are touted as thegreatest way to experienceAlaska's wilderness. There issomething special about float-ing a river and spending sometime getting to know it but stillnot having any idea of what thewater around the next bend willbring," according to AnthonyRoute, author of FlyfishingAlaska. It's never too early to start plan-ning that fishing trip to Alaska.Call us today! ExploringAlaska, One River at a Time(907) 333-2699 [email protected]

Chilkat Eagle Inn - HistoricInn within a National HistoricLandmark, Haines, Alaska -Gateway to World HeritageInternational Parks and theAlcan Highway. Many ameni-ties including guest kitchen,TV/Internet/email lounge, cour-tesy shuttle bus. Great for busi-ness travelers and vacationers.Check out our website athttp://www.kcd.com/eaglebb

Circle 44 PresentationsS a f e t y M o t i v a t i o n a lPresentations Behavioral SafetyTrainingwww.webspawner.com/users/juanitasstory/ [email protected]

Recreation/Lodging

Meetings/Events

Real Estate/Commercial

PNA CLASSIFIEDSPetroleum News • Alaska 17Week of September 22, 2002

Legal Notice

NOTICE OF PUBLIC MEETINGS ALAS-KA OIL & GAS CONSERVATION COM-MISSION Under the Open Meetings Act(AS 44.62.310), notice is given that theAlaska Oil and Gas ConservationCommission will meet in public meetings ondates September 4, 11, 18, 25, 2002,October 2, 9, 16, 23, 30, 2002 andNovember 6, 13, 20, 27, 2002 at 9:00 AMin the Commission’s Conference Room inAnchorage, Alaska at the address below.he Agenda may include: general commis-sion business including personnel; regula-tion matters; policy and budget matters; oiland gas conservation issues; legislativeissues; and agenda items deferred fromprior meetings. The public is invited toattend the meetings, however, commissionbusiness meetings do not provide for publictestimony. A finalized agenda will be pre-pared and posted at the Commission’soffice by noon of the workday before eachof the scheduled meetings. Circumstancesmay cause items to be either added ordeleted from an agenda. If you have anyquestions about the agenda, please contactJody Colombie at the Alaska Oil and GasConservation Commission, 333 W. 7thAvenue, Suite 100, Anchorage, Alaska99501, (907) 793-1221. If you are a personwith a disability who may need specialaccommodation in order to attend the pub-lic meeting, please contact Jody Colombieat the address or phone number indicatedabove as soon as possible but at least 72hours before the accommodation is needed,to ensure that any necessary accommoda-tions can be provided. Cammy OechsliTaylor Chair Published August 9, 2002

Legal Notice

NOTICE Alyeska Pipeline ServiceCompany, acting as Agent for and on behalfof the Owners of the Trans Alaska PipelineSystem (TAPS), intends to offer for salvageand removal four complete mainline pumpstations, which include three complete top-ping units. These pump stations are situatedin various arctic and sub-arctic locationsalong the 800 mile Trans-Alaska Pipeline andare accessible from the State of Alaska roadsystem. The scope at each facility will includethe removal of all pump station buildings, pip-ing, valves, pumps, generators, controldevices, tanks and living quarters. Interestedparties are urged to submit their companyprofile, experience, previous projects and/orother relevant company information [email protected]. For addi-tional information, contact Kevin Cassidy at907-787-8592 or Steve Schudel at 907-787-8617. Responses will be used to devel-op a bidder’s list for a competitive solicitation.

ADVERTISER INDEX18 Petroleum News • Alaska Week of September 22, 2002

AABC MotorhomesAdvancial Federal Credit UnionAir Logistics of AlaskaAlaska Airlines CargoAlaska Anvil . . . . . . . . . . . . . . . . . . . . . . . . . . .2Alaska DreamsAlaska Interstate Construction . . . . . . . . . . . . .4Alaska Marine LinesAlaska Railroad Corp.Alaska SteelAlaska Telecom . . . . . . . . . . . . . . . . . . . . . . . .9Alaska Tent & TarpAlaska Textiles . . . . . . . . . . . . . . . . . . . . . . . . .5Alaska Valve & FittingAlaska WalkFit OrthoticsAlaska West ExpressAlliance, TheAmerican MarineArctic ControlsArctic Pacific EnterprisesArctic Slope Telephone Assoc . . . . . . . . . . . . . .3Arctic Wire Rope & SupplyArmy/Navy StoreArrowHealthASCG Inspection, Inc. (AII)Avalon Development

B-FBadger ProductionsBaroid Drilling Fluids . . . . . . . . . . . . . . . . . . . . .9Brooks Range SupplyCafe AmsterdamCal Worthington Ford . . . . . . . . . . . . . . . . . . .13CameronCarlile Transportation ServicesCCICentral Trading SystemsChiulista Camp ServicesChugach Technical ServicesClarion Suites . . . . . . . . . . . . . . . . . . . . . . . . .19Cleanaire AlaskaCN Aquatrain . . . . . . . . . . . . . . . . . . . . . . . . .11ColvilleConam ConstructionContinental Auto GroupCook Inlet Tug & BargeCrowley AlaskaCruz Construction . . . . . . . . . . . . . . . . . . . . . .13Dowland - Bach Corp.Doyon DrillingDura-Wrap ContainmentsDynamic Capital ManagementEagle EnterprisesEngineered Fire SystemsENSR AlaskaEpoch Well ServicesEra AviationEvergreen Helicopters of AlaskaEvergreen Resources Alaska LLCExecutive Suite HotelF.A.T.S.FMC Energy SystemsFlight AlaskaFlowline AlaskaForest OilFrontier Flying Service

G-MGBR Equipment . . . . . . . . . . . . . . . . . . . . . . .12Golden North Van LinesGolder AssociatesGreat Northwest . . . . . . . . . . . . . . . . . . . . . . .10Hawthorne Suites . . . . . . . . . . . . . . . . . . . . . .19H.C. Price . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Industrial Project ServicesInspirationsIRF GroupJackovich Industrial & Construction SupplyJudy Patrick PhotographyKenai AviationKenworth AlaskaKPMG LLPKuukpik Arctic Catering Kuukpik - Fairweather - VeritasKuukpik - LCMFLounsbury & Associates

Lynden Air CargoLynden Air FreightLynden Inc.Lynden InternationalLynden LogisticsLynden TransportLynx EnterprisesMachinery Technical SupportManaged Integrity Services (MIS)Mapmakers of AlaskaMarathon Oil Co.McLane Consulting GroupMI SwacoMIAC MaterialsMichael Baker Jr.Midtown Auto Parts & MachineMillennium HotelMontgomery Watson Harza . . . . . . . . . . . . . . .10MT Housing

N-PNabors Alaska Drilling . . . . . . . . . . . . . . . . . . .12NANA/Colt EngineeringNatco CanadaN.C. Machinery . . . . . . . . . . . . . . . . . . . . . . . . .8Neeser ConstructionNEI Fluid TechnologyNew World TechnologyNordic/Calista ServicesNorth Coast Electric Co. . . . . . . . . . . . . . . . . . .8North Star Terminal & StevedoreNorthern Air CargoNorthern Testing LaboratoriesNorthern Transportation Co.Offshore Divers . . . . . . . . . . . . . . . . . . . . . . . . .4Oil and Gas Supply Co. . . . . . . . . . . . . . . . . . . .4PDC/Harris GroupPacific Rim Leadership DevelopmentPanalpinaPeak Oilfield Service Co.PencoPetroleum Equipment & ServicesPetrotechnical Resources of AlaskaPGS OnshorePhillips AlaskaPinkerton SecurityPSI Environmental & Instrumentation

Q-ZQUADCORolls Royce Energy SystemsR & R Scaffold ErectorsSchlumberger Oilfield ServicesSECORP IndustriesSecurity Aviation . . . . . . . . . . . . . . . . . . . . . . .4Seekins FordShred Alaska . . . . . . . . . . . . . . . . . . . . . . . . . .3SimplexGrinnellSnowbird Management Inc.SOLOCO (DURA-BASE)Sourdough ExpressSpan-Alaska ConsolidatorsSpenard Builders SupplySTEELFABTaiga AdventuresTec LabsTesting Institute of AlaskaThe Fairweather CompaniesThrifty Car RentalTOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7Totem Equipment & SupplyTravco Industrial Housing Ltd.Udelhoven Oilfield Systems ServicesUmiat CommercialUnitech of Alaska . . . . . . . . . . . . . . . . . . . . . . .3United RentalsUnited Van LinesUnivar USAURSWelding ServicesWesternGecoWood Group (Alaska)XTO EnergyZY-TECH Global Industries

Companies involved in Alaska’soil and gas industry

ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS

All of the companies listed above advertise on a regular basis with Petroleum News • Alaska.

Security AviationSecurity Aviation, a charter

flight service with the mostdiverse fleet of passenger air-craft in Alaska, was establishedin 1985. The company has devel-oped a reputation for safe operat-ing practices, superior customerservice and fair prices. The fleetranges in size from light twinsand prop jets to the Citationbusiness jet, and there havebeen no accidents or injuries in18 years. Security Aviationserves customers including theoil industry, commercial fisheriesand government clientele.

Mike O’Neill, owner andfounder, moved to Alaska fromDetroit in 1959 only two weeksafter visiting Anchorage. He wasa resident in time to witness thestatehood bonfire.

O’Neill, with 9,000 Alaskanflight hours, commutes to workfrom Big Lake in his floatplaneand naturally enjoys flying andfishing.

FMC EnergySystems

FMC has been operating inAlaska since the early 1960s,providing support to the oil indus-try through the design, manufac-ture and supply of systems andproducts. FMC has supplied andoperated wellheads andChristmas trees for industry oper-ators for three decades. Thecompany’s performance recordfor meeting drilling schedulesand transportation limitations isthe cornerstone of its success.

Alan McArthur, area manager,began his career in 1975 as amanufacturing engineer for FMCin Scotland. He moved into salesin 1983 after receiving his diplo-ma in Industrial Management. In1986 he left Scotland for Alaska.In 1989 he assumed his currentposition. Alan is a low key bikerwho rides the trails of Kincaid inAnchorage, yielding the trail toresident moose when necessary.

BusinessSpotlight

Mike O’Neill, Owner

Alan McArthur, Area Manager

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OIL PATCH INSIDER/THE REST OF THE STORYPetroleum News • Alaska 19Week of September 22, 2002

Standardization) and API Q1 (AmericanPetroleum Institute). When approvedUnique will be the only dual-certifiedcompany in Alaska, my sources theretell me.

The elephant denture, by the way,was a specially manufactured replace-

ment part that was inserted in the ele-phant’s jaw to connect with the bone andallow the doctor to reattach the elephan-t’s broken tusk.

All in a day’s work at Unique.

PARTNERING GOING ON….Global Trade and Technology Network, aprogram funded by the U.S. Agency forInternational Development, is partneringwith the Alaska Export Assistance Center.

Global Trade and Technology helpssmall and medium-sized firms to buildtrade linkages and identify investmentopportunities by providing free, pre-quali-fied trade and investment leads.

More information is available atwww.usgtn.net or by calling ChuckBecker, director of Alaska ExportAssistance Center at (907) 271-6237.

GRIFFIN ON THE MOVE.... One ofmy sources told me Jack Griffin, aDepartment of Law attorney who special-izes in oil and gas law, left state governmentlast week to take a position withConocoPhillips Alaska.

The word is Jack is replacing BobMcManus as vice president of tax andexternal affairs, but sans Bob's tax responsi-bilities. No word yet on where Bob is head-ed, but a news release containing PresidentKevin Meyer's post-merger executive staffis supposed to be released shortly.

A SURPRISE GUEST…. In 1983 theDresser Magcobar Co. was holding itsannual customer appreciation barbecue atits building in the rail yards of the AlaskaRailroad when a surprise guest appeared.Suddenly, there was increased motionthroughout the crowd and murmuring that

grew louder and louder.That’s when my Insidersource turned to see awell-known lady namedCecilia — i.e. "Cel" forshort, pronounced"Seal."

Anyone who lived inAlaska during and afterthe construction of thepipeline knew Cel, a col-orful addition to the fundays before the bottomfell out of the price of oil.Cel was owner and bar-

tender at several bars in Indian, Alaska,and was unique in that she had beenblessed with a fun personality, risquéhumor and an ample body in excess of 49inches. She emphasized this blessing bywearing the shortest of skirts and the low-est of tops — therefore the motion andmurmuring at the luncheon. (Rememberthese were the days before PamelaAnderson.)

My Insider source went over to say hiand asked Cel what she was doing at theluncheon. Cel replied, “Oh some Houstonoil men were in the bar the other night andinvited me to the luncheon. I was in townand thought what the h—- why not go.Then I got lost and couldn’t find the placeso I stopped a railroad train (a yard engine)and asked for directions.”

My source replied, “Oh come on Cel.the Alaska Railroad trains don’t stop togive people directions” — and her answerwas — “Honey, this one did!”

And you know what? He checked —they did.

DID YOU KNOW? REMEMBERTHIS FACT…. Every day in Alaska, onein five children is at risk of going hungry.

Dianne Barske, in the “It Matters” col-umn for the August issue of PulsePublications quoted Jenna Apatiki, pro-gram director for the Food Bank of Alaskaas saying, “People are so blind to hunger.

Most adults have no clue that so many kidsgo hungry right here.”

Summer is hard for hungry childrenbecause they do not have access to thebreakfast and lunch meals served at theirschools, although Kids’ Kitchens has con-tinued to serve supper to children eachday. Elgin Jones, founder and director ofKids’ Kitchens (it has served 400,000meals in six years) said, “No child shouldgo hungry. It is the responsible adults whoare letting these kids down.”

So, responsible adults, what are wegoing to do to erase this terrible statistic?We can call Elgin at (907) 274-8522 orsend a donation — now — to Kids’Kitchens at P.O. Box 102048, Anchorage,AK 99510 or donate to the Food Bank ofAlaska.

JPO ON THE MOVE…. KayKletka, who joined the Joint PipelineOffice as the program analyst has retired.Kay started with BLM in 1973 andmoved to the JPO in 1992. Kay has manyinterests and hobbies that will insure afun retirement.

Marietta Houston, one of the few

remaining original JPO people, hasaccepted the BLM program analyst posi-tion. Marietta spent 11 years with thestate before accepting the CMP databasetechnician job with BLM.

TRANSPORTATION CONSUL-TANT APPOINTED…. American FastFreight has announced the appointment ofStephen Curitore as transportation consul-tant for its Midwest region. Prior to join-ing American Fast Freight Stephen wassenior account executive for Sea-StarLines.

He has more than 20 years of experi-ence in the domestic and internationalocean freight forwarding business.

American Fast Freight is a Tacoma,Wash.-based transportation and logisticscompany with Alaska offices inAnchorage, Fairbanks and Kenai.

Oil Patch Insider is written byPetroleum News • Alaska columnistWadeen Hepworth. The Insider appearsthree times per month. If you have news ora news tip for the Insider, Wadeen can bereached at (907) 770-3506 or via email [email protected].


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No you aren’t in Arizona, this sign is along the Kuparuk Spine Road at the junction withthe Milne Point Spine Road. on the North Slope. The “Pit B” sign refers to Milne Site Bused for gravel extraction. Can you believe the site, now a water source, is also a deep-water habitat for fish? Will the sign come down and become ConocoPhillips 66?

Couplings are used to space-out wells and connect the variousconnecting parts called “jewelry.”

market in North America to support bothprojects. … Both projects are viable,” shesaid. When asked if ConocoPhillips haschanged its route preference for the Alaska

gasline, DesJarlais said no. “We believe the southern route along

the Alaska Highway has fewer unknownsand technical risks and we believe lowerultimate costs.”

Phillips Alaska Inc. (nowConocoPhillips (Alaska) Inc.), along withBP Exploration (Alaska) and ExxonMobil,

is one of the three major Alaska NorthSlope gas owners. Conoco Canada (nowConocoPhillips Canada), along with part-ners Shell Canada and sister companiesImperial Oil and ExxonMobil Canada, isone of four owners of the Mackenzie Deltagas.

—Kay Cashman, PNA publisher

The newly merged Conoco andPhillips Petroleum has decided

there is “a natural sequence” whichcalls for the Mackenzie Delta gas

pipeline to be built first, followed bythe Alaska Highway gasline.


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ADVERTISEMENT20 Petroleum News • Alaska Week of September 22, 2002

arctic gas let’s make a deal - petroleum news

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