Alaska oil patch resilient at lower oil prices

Alaska’s oil patch will likely prove more resilient in 2015 than the booming shale plays in North Dakota and Texas where some are forecasting a sharp drop in drilling activity. The near-term impacts on Alaska’s oil and gas industry from a 50 percent-plus plunge in oil prices since last summer should be less severe than in other states, according to Tim Bradner, a highly regarded Alaska business and energy reporter.

“For one thing, there are some major projects in construction, like Point Thomson and CD-5 that won’t shut down,” said Bradner. “Other projects just now launched will continue, like the new Mustang field development by Brooks Range Petroleum.”

Bradner also noted that a number of projects – inspired by oil tax reform –are moving forward. New drill rigs contracted by ConocoPhillips in 2015 and 2016 will arrive as planned, and will go to work. Repsol is planning three exploration wells with three rigs working. Great Bear Petroleum is still planning three test wells to explore shale oil resources south of Prudhoe Bay.

Falling oil prices have not deterred Hilcorp Alaska LLC from applying to drill in Arctic waters. The company recently filed a development and production plan for federal Beaufort Sea lands that it purchased from BP.

At this point, industry capital spending plans remain on track with record expenditures anticipated for FY 2015 and FY 2016. Spending on projects is estimated at $4.5 billion in the current fiscal year and $4.8 billion next year.

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