|  April 21, 2014  |  
Mostly Cloudy   45.0F  |  Forecast »
Bookmark and Share Email this page Email Print this page Print Feed Feed

World Energy Looks into the Cook Inlet of Alaska and the Fate of Redoubt Shoal and West McArthur River Fields


HOUSTON--(BUSINESS WIRE)--"Alaska's OCS contains an estimated 27 billion barrels of recoverable oil and 130 trillion cubic feet of recoverable natural gas. That's more than twice the amount of oil that has been produced on Alaska's North Slope since the Trans Alaska Pipeline System went online in 1977. Counting its OCS reserves, Alaska likely has more than 30 percent of the nation's recoverable oil and gas." Governor Sean Parnell of Alaska, in the Wall Street Journal Oct. 2.

Alaska has vast resources and not all of them require congressional approval. The Cook Inlet of Alaska has been producing oil since 1957. However, operating in the Inlet is in a state of flux. Certainly, production is declining but mostly due to unreasonable application of regulations by a few state employees. The majors and some of the independents have been pulling out of Alaska and focusing their investments elsewhere. These issues were discussed with ALASKA STATE LEGISLATURE HOUSE SPECIAL COMMITTEE ON OIL AND GAS, Alaska November 21, 2005.

According to the most recent 2009 Global Petroleum Survey by the Frasier Institute pg. 29, "Alaska ranked 3rd worst overall among the US states (in barriers to oil and gas investment), largely because of investment barriers related to environmental regulations." One independent trying to buck this trend, Pacific Energy Resources (PERL), entered the inlet last year but ran afoul of shrinking oil prices, high debt, a volcano, and a collapsing equity market.

Forced into bankruptcy, the company faced serious issues and needed to sell its assets. However, the Unit Division of the DNR contracted ½ the acreage in the Redoubt field, making any asset sale even more difficult.

It now needs to sell off its remaining assets and currently has only one buyer, longtime Alaskan oil man, Dan Donkel. The real money on the table is enough to satisfy the valid cure amounts which are due; if the State of Alaska will allow the purchase to go through and work with Donkel, who has a long history with one of the fields. Good companies will get paid for the services they have rendered and two very important assets will be saved from abandonment. The Redoubt Shoal and West McArthur River oil fields are safely shut in and not producing but could hold as much as 40 million barrels of oil.

To make this possible Donkel has filed several documents with the district court in Delaware, hoping to stay the abandonment and complete a transaction with all parties. However, to accomplish the goal Pacific Energy, the State of Alaska, and the Federal Government will need to agree that the Donkel offer satisfies the valid cures, is sound business practice and in the end is in the best interest of all involved. Conversely perhaps the judge could order all parties to do everything possible to make this a reality so Donkel Oil and Gas can put everyone back to work.

Add your comment:
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement