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ConocoPhillips said it has approved $900 million in funding for its Greater Mooses Tooth #1 (GMT1) development on Alaska's North Slope, a drilling project that is expected to come online in late 2018 and have peak production of 30,000 b/d.
GMT1 lies entirely within the boundaries of the National Petroleum Reserve in Alaska (NPR-A). According to ConocoPhillips, the largest independent in the world, the development will include a new gravel pad, a 7.7-mile road, facilities and pipelines. The company will start GMT1 by drilling nine wells, but the development will have the capacity for up to 33 wells. Oil recovered from GMT1 will be processed at ConocoPhillips' existing Alpine Central facility.
Construction is scheduled to begin in early 2017 and be completed in 2018, with oil production expected to begin by the end of the year. ConocoPhillips said the GMT1 project will create up to 700 construction jobs during the two winter season, and will support hundreds of support jobs. The company added that the passage of tax reforms in Alaska in 2013 was "a significant factor" in the decision to move forward with the drilling.
ConocoPhillips received permits to drill in the NPRA from the U.S. Army Corps of Engineers (USACE) on Jan. 16, and from the Bureau of Land Management (BLM) on Oct. 22. The company said the project will produce oil from lands owned by Kuukpik Corp., Arctic Slope Regional Corp., and the BLM. GMT1 will be operated by a subsidiary, ConocoPhillips Alaska Inc. (COPA), which owns a 78% interest in the project. Anadarko Petroleum Corp. owns the remaining 22% stake.
In a statement, COPA President Joe Marushack said GMT1 "follows our recent successful completion of the CD5 project. We are pleased to have been able to work through key permitting issues with the USACE and BLM that now allows us to move into the development phase."
Last month, ConocoPhillips announced it would slash billions from its guidance for capital expenditures (capex) and operating costs for the remainder of 2015 (see Daily GPI, Oct. 30). That decision followed announcements in July that COPA would sell its North Cook Inlet Field and its one-third interest in the Beluga River Field, and in September that ConocoPhillips would reduce its total workforce by 10% (see Daily GPI, Sept. 2; July 29; July 17).
ConocoPhillips' capex projects for 2015 include more than $1.4 billion for a trio of projects on Alaska's North Slope (see Daily GPI, July 29):
Oil began to flow from the CD5 and Drill Site 2S projects in October. First oil is from 1H NEWS is expected in 2017. The company said the three projects combined will represent approximately $3 billion in gross development. Peak production is expected to be 16,000 b/d at CD5; 8,000 (gross) b/d at Drill Site 2S; and 8,000 (gross) b/d at 1H NEWS. ConocoPhillips said it filed for permits to drill the Greater Mooses Tooth # 2 (GMT2) project in August.