THE LINK WINTER 2025 The official magazine of the Alaska Support Industry Alliance www.AlaskaAlliance.com New administration, new hope for Alaska Stage set for big developments in 2025 — and beyond INSIDE THIS ISSUE n Willow, Pikka Developments n Oil Forecast Remains Strong n Brisk Job Growth Expected n COMING SOON: Meet Alaska
At Santos, we are proud to develop the world-class Pikka Project on the North Slope. Phase 1 will develop about 400 million barrels from a single drill site with first oil expected in 2026. And we are even prouder that our interest in Pikka will be net-zero on Scope 1 & 2 emissions!
THE LINK: WINTER 2025 4 Happy New Year and welcome to 2025 from The Alliance! There’s a lot to be looking forward to regarding resource development and The Alliance is here to help make it happen. Between construction of ConocoPhillips’ Willow Project and Santos’ Pikka Project, 2025 is going to have the most North Slope activity in almost 30 years. Much of the work is being executed by Alliance member companies and we are thrilled to see such an uptick in activity, from engineers to camps and caterers, equipment suppliers and our construction workforce. Companies are taking advantage of the surge in demand, which also benefits downstream businesses across the state. A strong natural resource industry is the jet engine that keeps Alaska moving. The Alliance mission statement is “to lead and advocate for the responsible exploration, development, and production of Alaska’s oil, gas, energy, and mineral resources, ensuring durable benefits for all Alaskans and fostering economic growth.” We do this in several ways: n Educate Alaskans about the importance of responsible resource development in our state. n Advocate for a stable business climate to maintain and attract new investment. n Present opportunities for our members to interact with the exploration and producer companies and promote our member companies’ services. The Alliance board of directors conducts business through four committees that meet monthly: Government Affairs; Industry Relations; Public Relations; and Member Services. These committees are open to any member who would like to get involved with supporting The Alliance mission. You do not need to be a board member to participate. If interested, please reach out to me or our CEO, Rebecca Logan. The 2025 legislative session is getting set to kick off as I write this. The Alliance is looking at pre-filed bills and will be on top of issues that matter to our member companies and industries. Two of our 2025 priorities are critical with the uptick in North Slope exploration and construction: workforce development and improvements to the Dalton Highway. We will have a contingent of board members in Juneau the latter part of February to meet with legislators and discuss our legislative priorities. Representing 550 member companies and approximately 35,000 Alaskans, The Alliance is a respected voice in Juneau. The change in the federal administration presents optimism and opportunity for Alaska. The new administration is bullish on NPR-A development, the Ambler Access Project and the Alaska LNG Project, possibly bringing new life to these and other resource development projects. Recently, the Alaska Gasline Development Corporation announced an agreement with Glenfarne Energy to advance the Alaska LNG Project, bringing additional new energy to a project that will have tremendous benefit to the state and its citizens. We’re gearing up for the annual Meet Alaska conference, which will be March 21. Check our website for updates regarding this and other Alliance events. Of particular note is a celebration of the 50th anniversary for the first piece of pipe laid for the Trans Alaska Pipeline, which occurred at Tonsina in 1975. A celebration will be held at the Petroleum Club on March 27. Our board is energized with the prospects in front of us and will be working hard for the resource development industry in Alaska. Here’s to a prosperous 2025! Our future is bright for 2025 Message From Jeff Baker, Board of Directors President Connect with The Alliance We are working proactively to keep our members informed and connected via online platforms and events. Watch for our updates through email and social media. LinkedIn: www.linkedin.com/in/the-alliance-4939251b Facebook: www.facebook.com/alaskaalliance X (formerly Twitter): x.com/AKAlliance And if you’re not receiving our updates, email info@alaskaalliance.org. Stay up to date on our website at AlaskaAlliance.com.
3601 C Street, Suite 1424 Anchorage, Alaska 99503 www.petroak.com info@petroak.com Alaska’s Oil and Gas Consultants Geoscience Engineering Operations Project Management 907.272.1232
Page 12 Willow, Pikka moving full steam ahead A busy North Slope construction season is underway as companies and contractors are building ConocoPhillips’ Willow project and Santos’ Pikka field with an expectation of 4,000 workers in the future. Pages 16, 38 ANWR lease sale brings in no bids No bids were received during the federal lease sale in the Arctic National Wildlife Refuge. That’s among the items incoming President Donald Trump hopes to change in his Alaska plans. Page 27 ConocoPhillips starts production at Nuna ConocoPhillips has started production at its Nuna project on the North Slope, with the project completed ahead of schedule and under budget. Page 30 AGDC has framework for Alaska LNG Project The state-owned corporation in charge of developing a transAlaska natural gas pipeline said it is in negotiations with an energy company to lead and fund the Alaska LNG Project. FEATURES The Link is published in partnership with the Alaska Support Industry Alliance by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. We actively seek contributions from Alliance members and the oil and gas and mining industry. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. Our magazine is mailed at no charge throughout Alaska to those interested in resource development and a healthy Alaska economy. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper Contributing Photographer: Judy Patrick THE LINK: WINTER 2025 6 ON THE COVER The second presidential term of Donald Trump and his prodevelopment polices for Alaska’s oil and gas industry has brought optimism. Trump has laid out polices he hopes to enact that will reverse those of the previous administration that severely impacted the lifeblood of the state’s industries. ON THIS PAGE The Trans Alaska Pipeline System this winter. Current and future development of Alaska’s North Slope fields continues, with the Willow and Pikka projects currently underway while a host of smaller projects and new developments mark a bright future for the state’s oil and gas industries.
TOTE IT TO ALASKA 50 YEARS OF EXCELLENCE IN MOTION Since 1975, we’ve been TOTE-ing the supplies for life to Alaska, solving the toughest transportation challenges with innovation, speed, and safety. We’re proud to celebrate 50 years of best-in-class service to the customers and communities we serve and look forward to 50 more.
Alliance Members and Friends: By the time you read this, the first session of the 34th Alaska Legislature will have begun. Your Alliance Board of Directors has chosen the following legislative policy priorities for the session: n Cook Inlet Gas Supply: Support policies that will spur future exploration, development and security of supply in Cook Inlet Gas. n Workforce Development: Support legislation and administrative efforts focused on attracting and maintaining a quality workforce for the resource development industry in Alaska. n Dalton Highway: Support a long-term funding plan to maintain and improve the Dalton Highway n Implementation of Ballot Measure 1: Support appropriations and regulations that focus on working with Alaska businesses to help them implement new paid sick leave and employee meeting requirements. n Strengthen the Private Sector: Oppose legislation, regulations or other activities that create unreasonable strain on Alaska businesses. In addition, we will be monitoring legislation as it is introduced and plan to continually update you through our weekly Leg Link communication on any bills that we are officially supporting or opposing. Hot Topic: The Department of Labor has begun work on the regulations that will guide employers as they implement the requirements of Ballot Measure 1 — minimum wage increases, paid sick leave and employee meetings. We are monitoring that process and will be asking employers to participate in providing public comments when the draft regulations are posted. This will be the best opportunity for you to get clarification on the very broad, poorly written legislation that was Ballot Measure 1. I’m hoping that when you do read this, President Trump will have been inaugurated and we have seen multiple executive orders that reverse the previous administration actions against our oil, gas and mining industries in Alaska. Can’t think of a better way to start 2025! Hope to see you soon at one of our events. Respectfully, Rebecca Logan CEO THE LINK: WINTER 2025 8 Alaska legislative priorities we’re supporting this session Message From CEO Rebecca Logan
THE LINK: WINTER 2025 10 Join us for Meet Alask
www.AlaskaAlliance.com 11 ka 2025! The 41st annual Meet Alaska — the state’s largest one-day energy event — is March 21 and we hope to see you in Anchorage! For more than 40 years, we have gathered each spring to learn, share, network and celebrate Alaska’s resource development industries. Please make plans to join us this year to celebrate our vital industries that are the lifeblood of the Last Frontier and to look both ahead at the coming year’s opportunities and look back at the amazing history we’ve shared, advocating for our energy future, and building a stronger Alaska and America. The Alliance is composed of more than 500 members providing more than 35,000 Alaskan jobs related to the oil, gas and mining industries. Our mission is to lead and advocate for the responsible exploration, development, and production of Alaska’s oil, gas, energy, and mineral resources, ensuring durable benefits for all Alaskans and fostering economic growth. For sponsor opportunities, please contact CEO Rebecca Logan at rlogan@alaskaalliance.com.
THE LINK: WINTER 2025 12 It’s full bore at Pikka, Willow this winter
Work Smarter, Not Harder. Our Commercial Purchase Card program has an intuitive expense management tool making it easy for employees to submit expense reports, photos of receipts and notes for each transaction right from their phone. Call us today at (907) 562-0062 to speak to a member of our Treasury Management team about simplifying your credit card reconciliation. ACHIEVE MORE OUR BUSINESS IS TO HELP YOUR BUSINESS www.AlaskaAlliance.com 13 4,000 workers on job for Santos, ConocoPhillips A busy North Slope construction season is underway this winter as companies and contractors are building ConocoPhillips’ Willow project and Santos’ Pikka field. Santos is aiming to begin Pikka in production at the end of 2025, several months earlier than the original forecast of mid-2026. That will provide a nice boost for North Slope production and state oil revenues. Pikka is expected to peak at 80,000 barrels per day in its first phase. North Slope fields are now producing just under half a million barrels per day. ConocoPhillips is meanwhile in its third construction season for Willow, a $7.5 billion project which is slated to be completed in 2029 and produce 180,000 barrels per day at its peak. This winter, Santos is working with more than 40 Alliance members on Pikka, which involves a $3 billion investment for Santos and its partner Repsol. “The project is full-steam ahead with pipelaying and making great progress early in their 2024 and 2025 winter construction season,” said company spokesman Steve Wackowski. Santos is also focused on local hiring. During his speech to the Alaska Oil and Gas Association (AOGA) conference last summer, company CEO Kevin Gallagher said, “We deliberately focused on recruiting Alaskans to join our team. Over 80% of our team were already residents when they came on board and more than 95% of the company’s North America employees live in Alaska.” Santos recently commissioned its main camp on the Nanushuk Operating Pad, where the first meal was served in December. The camp is already full and Santos expects more than 2,000 contractors to rotate through it this season. ConocoPhillips is busy, too. “The third Willow construction season commenced as planned in late November with ice road construction. We anticipate more than 2,000 workers on the North Slope this season for construction activities including ice and gravel roads, bridges, pipelines and infrastructure at the Willow Operations Center,” said ConocoPhillips spokesperson Rebecca Boys. Santos, working through its Alaska operating company Oil Search, drilled and completed 10 wells during 2024 for the Pikka field phase one. That was two more than six to eight the company had committed to for the year in its annual Plan of Development Report to the state Division and Oil and Gas. The wells are now awaiting connections to the Nanushuk Processing Facility to allow a production start in early 2026. Oil Search/Santos also installed 5,000 Vertical Support Members to support in-field pipelines as well as 40 miles plus of pipelines. The company’s 2025 Plan of Development commits to another CONTINUED on PAGE 14
THE LINK: WINTER 2025 14 CONTINUED from PAGE 13 Santos is aiming to begin Pikka in production at the end of 2025. six to eight wells. The 2025 plan also includes installation of remaining field pipelines and pipelines for crude oil shipments, seawater transport for reservoir pressure maintenance and fuel gas brought in from other fields. Oil Search also will continue work on Pikka’s Grind and Inject facility, Seawater Treatment Plant and completion of the Nanushuk Operations Pad, it told the state Division of Oil and Gas. The Grind and Inject facility grinds the rock cuttings from drilling along with the used drilling fluids, or “mud,” for injection underground in a dedicated disposal well. The material is stored in an underground reservoir sealed by impervious rock in a process approved by the Alaska Oil and Gas Conservation Commission, the state’s quasi-judiciary body that regulates “downhole” oil and gas production including safe disposal of materials such as drill fluids. There are several Grind and Inject facilities serving other oil fields on the North Slope including the large Prudhoe Bay field. The Seawater Treatment Plant built for Pikka treats saltwater from the Beaufort Sea for transport to the Pikka field and injection for reservoir pressure maintenance. ConocoPhillips operates a similar Seawater Treatment Plant nearby. Oil Search/Santos are already preparing for a phase two at Pikka, which involves two additional pads. The company said previously that phase two work will begin as soon as phase one production is underway. Further exploration is also being done this winter on discoveries made south of Pikka. — Tim Bradner
www.AlaskaAlliance.com 15 The state’s Dalton Highway from Interior Alaska to the North Slope is a critical transportation link and is being heavily used with recent project activity. Transportation companies are concerned about its maintenance. We asked the Department of Transportation and Public Facilities about the condition of the Dalton this winter, and about staffing at maintenance camps. Compiled by Danielle Tessen Department of Transportation and Public Facilities, Northern Region Q: What’s condition of highway this winter? What challenges are there? As one of Alaska’s most remote and challenging routes, the Dalton Highway faces its share of extreme winter conditions. This winter season has brought the expected mix of cold, snowfall, icy roads, and isolated avalanches, all of which heavily influence the highway’s condition and travel reliability. The Elliott Highway also saw early-season issues with rain and slush in the Interior, adding to the seasonal challenges. Fortunately, no large-scale disasters or extreme weather events have impacted this corridor this winter. We experience most challenges in spring and the summer for grading. In the winter, the freeze helps the road and focus is on snow removal. Challenges are with heavy snowfall to come during spring breakup grading operations. Snowfall Comparison n 2024-2025 Winter: Snowfall levels are average. 2020-2021 had higher-than-average snow. 2022-2023 saw slightly milder conditions with less overall accumulation. Q: Can you tell us what’s in Governor’s FY 26 budget for Dalton operations and capital projects? Dalton Highway requests included in the FY2026 Governor’s Budget on the operating side: n Northern Region Highways and Aviation Component n Dalton Maintenance Contracting including one-time item $692,500 n Seeking funding request for contracting maintenance support on the Dalton n Statewide Safety and Emergency Management Component n Dalton Highway Safety Training, one time item $250,000 Total n With the increased hauling activities on the Dalton Highway, particularly the transport of liquefied natural gas (LNG), Dalton Highway employees need specialized training to respond effectively to highway accidents. This training is essential to ensure the safety of both the public and DOTPF staff. In the proposed Fiscal Year 2026 capital budget, there are specific allocations for the Dalton Highway: n Dalton Highway Heavy Maintenance (Milepost 76 to 89): $2.5 million designated for heavy maintenance between mileposts 76 and 89, focusing on aggregate application, drainage improvements, and roadside hardware repairs to address the poor condition of this highway segment. n Dalton Highway Aggregate Stockpiles: $4.5 million allocated for maintaining aggregate stockpiles, essential for ongoing maintenance and repair activities due to the highway’s poor surface condition. In addition, here are the 2025 planned on-going and new projects for the Dalton/Elliot corridor. n Dalton Hwy MP 289-305 n Elliott Hwy MP 51-63 Rehabilitation n Dalton Hwy MP 245-274 Resurfacing n Dalton Hwy MP 247-289 and 305362 Delineator Replacements Q: Last summer there were several vacancies in maintenance stations on the Dalton. Has this changed? Workforce on the Dalton continues to remain a top priority where we are seeking solutions, including working with other districts for two-on, two-off shift support. In addition, in the summer months, we have allocated eight temporary positions to work on the capital program. We continue to get creative on how to best serve the Dalton. Below are details for each of the camps, including staffing levels and vacancy rates: Dalton Highway Stations Livengood Maintenance Station n Area Covered: Elliott Hwy MP 28110; Dalton Hwy MP 0-28, Livengood Rd, Minto Road, Minto Airport n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 4 filled, 3 vacant Manley Maintenance Station n Area Covered: Elliott Hwy MP 110-156 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 3 filled, 2 vacant Seven Mile Maintenance Station n Area Covered: Dalton Hwy MP 28-100 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: full staff at 4 Jim River Maintenance Station n Area Covered: Dalton Hwy MP 100-156.2 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: full staff at 4 Coldfoot Maintenance Station n Area Covered: Dalton Hwy MP 156.2-209.2 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 4 filled, 1 vacant Chandalar Maintenance Station n Area Covered: Dalton Hwy MP 209.2-284.5 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 6 filled, 2 vacant Sag River Maintenance Station n Area Covered: Dalton Hwy MP 284.5-356 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 6 filled, 1 vacant Deadhorse Maintenance Station, North Slope n Area Covered: Dalton Hwy MP 356-416 n Hours of Operation: 6 AM - 6:30 PM n Days of Operation: 7 days/week n Operators: 10 filled, 1 vacant n Days of Operation: 7 days/week n Operators: 5 filled, 0 vacant Dalton Highway remains critical to state
THE LINK: WINTER 2025 16 January’s federal federal lease sale draws no bidding No bids were received for a planned federal lease sale in the Arctic National Wildlife Refuge held by the U.S. Department of the Interior on Jan. 10. “This concludes the second congressionally-mandated sale required by the 2017 Tax Act, which directed the BLM to hold two lease sales in the Coastal Plain,” of the refuge, the Interior Department said in a news release. U.S. Sen. Lisa Murkowski, R-Alaska, blamed former Interior Secretary Deb Haaland for sabotaging the sale with restrictions, however, which she said discouraged bidding. The failure of the sale sets the stage for a new effort to lease tracts in the refuge under incoming Republican President Donald Trump. The lack of bids was expected in Alaska because of terms and stipulations for the leases laid out by Haaland. Congress mandated that two sales be held in the 2017 Tax Act, which passed in 2019 under Trump’s first term as president. The terms for the sale were set by the Trump Administration. The second sale was held under the Joe Biden Administration. Trump is now back in office and is expected to push Congress, where both the Senate and U.S. House are Republican-controlled, to extend the 2017 Tax Act. That will create an opportunity for the new president and Alaska’s congressional delegation to insert a new requirement for leasing in the new legislation. Under new management, ANWR leasing efforts to rise under Trump Photo Courtesy Department of Interior
www.AlaskaAlliance.com 17 the Interior Department will likely set terms that are more industry-friendly for Alaska’s oil and gas industries. However, there could be questions on how much can be done in the four years Trump will have in office. A new Supplemental Environmental Impact Statement will be required and there will surely be lawsuits filed by conservation groups. The 400,000 acres offered in January was the minimum acreage required to be offered under the Tax Act. In the previous 2021 lease sale, much of the 1.5 million acres in the Coastal Plain, the part of ANWR considered most prospective, were offered for bidding. The lease stipulations in the recent offering would have restricted seismic work and surface disturbance in ways that would make drilling and development problematic. An additional twist is that there is pending litigation by the Alaska Industrial Development and Export Authority (AIDEA), the state of Alaska’s development finance agency. AIDEA had bid and won leases in the first lease sale in 2021. However, the Interior Department, under Haaland’s watch, canceled those leases. AIDEA’s lawsuit claims Haaland acted illegally in cancelling the leases, which are in the same area that would have been offered for lease Jan. 10. A litigation cloud complicating new leasing would further discourage bidding. Although ANWR is being touted by Trump and others as having huge oil potential, industry has actually shown little interest in recent years. There were just a handful of bids in the 2021 lease, most of them from AIDEA, the state agency. Most geologists believe the Coastal Plain does have potential for new oil and gas discoveries because finds have been made on state-owned lands to the west including the large Prudhoe Bay field. A large gas and condensate discovery was also found at Point Thomson, also on state lands, but a short distance west of the border of the federally-owned ANWR. However, the toxic politics over ANWR leasing and exploration over several decades — conservation groups at the state and federal level have fiercely opposed drilling — discouraged major companies in exploring the refuge. BP and Chevron showed interest in the 1980s and drilled an exploration well on lands adjacent to the refuge owned by Alaska Native corporations but the results of that well remain confidential to this day. — Tim Bradner U.S. Senators Lisa Murkowski and Dan Sullivan, and Congressman Nick Begich III (all R-Alaska), slammed the Department of the Interior (DOI) for holding a lease sale in the non-wilderness Coastal Plain of the Arctic National Wildlife Refuge (ANWR) in a manner that predictably resulted in no bids. The lease sale, announced in December after DOI arbitrarily rewrote the Coastal Plain oil and gas program to make development impossible, was clearly designed to fail. Interior dramatically restricted the lands available for leasing and imposed sweeping restrictions on the minimal lands left available, despite the clear and unambiguous language the Alaska delegation included in the Tax Cuts and Jobs Act of 2017. Comments from Alaska Legislators on ANWR: “I derive no satisfaction in saying I told you so, but the ‘lack of interest’ in this lease sale was an intended consequence of this administration’s efforts to make any development in the Coastal Plain economically unfeasible. This mess is the culmination of a failed energy policy that prioritizes resources from countries like Iran, Venezuela, and Mozambique over states like Alaska. Over the past four years, the Biden administration has ignored the Alaska Native people who live on the Coastal Plain and systematically dismantled the reasonable program established by the Trump administration under the law we wrote in 2017,” said U.S. Senator Lisa Murkowski, R-Alaska. “It’s also quite rich for Biden administration officials to suggest that companies should develop elsewhere. Where, exactly, in Alaska, or in any federal area, is that even possible under the policies they have imposed? Thankfully, moving forward, we have plenty of options to ensure that our state can produce more of its resources, including from the Coastal Plain, rather than being punished and sanctioned for having them. Better days are ahead.” “This is no surprise. From Day 1, Joe Biden and Deb Haaland have sought to illegally shut down any chance of developing ANWR and have said as much,” said U.S. Senator Dan Sullivan, R-Alaska. “They and their eco-colonialist allies have made every effort to delay, and ultimately kill, any chance of successful ANWR lease sales and have canceled the voices of the Iñupiat Native people of Alaska in the process. This latest lease sale was yet another attempt to circumvent the federal law Congress passed and President Trump signed mandating two lease sales in ANWR. Closing off nearly 75 percent of the 1002 Area, including lands that are projected to have substantial resources beneath them, is clearly an attempt to stymie interest from industry. Don’t forget: Companies had already witnessed the Biden-Harris administration brazenly and illegally cancel leases from the first sale. The good news is we will soon be working with the Trump administration which, unlike Biden-Harris, has a proven track record of responsible Alaska resource development, faithfully implementing the laws passed by Congress, and respecting the voices of the Iñupiat people of the North Slope who strongly support the ANWR leasing program. January 20th can’t come soon enough.” “The federal government has behaved more like an adversary than an ally when it comes to responsible development in Alaska,” said Congressman Nick Begich III, R-Alaska. “Making a lease sale so uneconomic in its construction that no party is willing to place a bid is not evidence of a lack of interest, but rather it is evidence of a keen understanding that these lands under the current regime have not been offered in good faith. Alaskan lands should be in Alaskans’ hands, and I look forward to working with the Trump Administration and my colleagues in the delegation to ensure greater self-determination of Alaska’s resources than has been available as of late.” Alaska legislators decry ANWR actions
THE LINK: WINTER 2025 18 Alaska oil forecast: Outlook sound amid new Slope work
www.AlaskaAlliance.com 19 Output increase touted in future on Slope projects The state of Alaska is projecting stable oil production during the next two years but there are increases expected in the future with new North Slope projects now under construction, according to the state Department of Revenue’s latest revenue and production forecast, issued in December. Near-term prospects for production growth are mixed until Pikka and Willow begin producing in 2026 and 2029. A lower oil price outlook is also putting the damper on state revenue expectations, state officials said following release of the state’s December forecast. The state revenue and natural resources departments work together on oil revenue and production forecasts. One challenge is production in the existing large fields on the slope is declining faster than anticipated. Production is expected to be 10,200 barrels per day lower this year, on average, compared with what was forecast last March, according to the production forecast. Similarly, the latest for 2026 average oil production is 12,600 barrels per day below the March forecast, according to the outlook. Current output, year-over-year oil production, is generally stable at 460,000 barrels per day to 480,000 barrels per day, depending on the season, but state officials had expected more incremental additions in producing fields to offset natural decline in the reservoirs, which are aging. However, one small new project now producing is Nuna, a previously undeveloped deposit in the Kuparuk River field. Nuna is expected to produce 20,000 barrels per day at its peak. In the state’s longer 10-year outlook, the startup of two larger fields now in construction — the Pikka project by Australia-based Santos Ltd. with Repsol, of Madrid, as a 49% partner, along with ConocoPhillips’ Willow project — are forecast to boost North Slope output to 657,000 barrels per day by 2034, the forecast said. That is a mid-case scenario. A high case is 900,000 barrels per day if more oil is found and developed. In a low case, if the new fields don’t perform as expected or oil prices go lower, the outook is status quo in production at just under half a million barrels per day, according to the forecast. The state’s estimates do not include any new production from the Arctic National Wildlife Refuge, which is being promoted by incoming U.S. President Donald Trump. ANWR is highly speculative. A lease sale was held in January but current U.S. Interior Secretary Deb Haaland placed so many restrictions on leasing that there was only modest bidding. Operations costs also are rising in producing fields. Costs are monitored by the state revenue department because they directly affect state income. Alaska has a net-profits type state production tax and the state requires producers to report production and capital costs, and also future cost estimates, in tax returns they file with the state. Lease expenditures, classified as field operation costs, were reported at $2.9 billion last year on the North Slope and are expected to amount to $2.9 billion this year and $3 billion next year before rising to $3.2 billion in 2027, according to the revenue forecast. Not all costs are allowed as deductions from the production tax, however, so the amounts reported do not include all expenses. Transportation costs for moving North Slope crude to west coast refineries are stable, with $10.53 per barrel paid in 2024. The forecast predicts $10.91 per barrel and $10.38 per barrel expected in 2025 and 2026, respectively. — Tim Bradner Photo by Judy Patrick
THE LINK: WINTER 2025 20 Pikka, Willow aren’t the only projects underway A lot of attention is focused on the two big North Slope development projects, Pikka and Willow. But there’s a lot of other work underway. Armstrong Oil and Gas and its partner, Apache, have resumed winter exploration east of Prudhoe Bay, where Armstrong sees good prospects for discoveries. Armstrong is an experienced explorer on the slope and Apache is a major independent with deep pockets. Exploration last winter by the two companies was partly successful but was cut short by inclement weather. Two independents, Narwhal LLC and EE Partners, plan to drill two exploration wells in Harrison Bay in 2026 to test Nanushuk and possibly Bevy of activity in play on North Slope fields Photo Courtesy Pantheon Resources The Talitha site is a North Slope project held by Great Bear Pantheon, an oil exploration subsidiary of Pantheon Resources.
www.AlaskaAlliance.com 21 Torok formations, the companies have told the state Division of Oil and Gas. The division recently approved a new unit for state oil and gas leases in the area, which is offshore the producing Alpine field and the National Petroleum Reserve–Alaska. The companies hold 77,848 acres of state leases that are adjacent to 88,000 acres recently relinquished by Shell in its West Harrison Bay unit. Shell held its acreage for years and felt the area has potential but was unable to secure a partner in exploring the area. Narwhal said it will be evaluating options for rigs and equipment in 2025 as well as reprocessing seismic data acquired in the area. Narwhal and EE said they have invested $6.8 million so far in the project. The Nanushuk geologic formation is known to be productive in areas to the south, where the Pikka oil project is now being developed, and Narwhal and EEL believe that it extends north into Harrison Bay, which is in state waters. Meanwhile, Pantheon Resources is drilling its Megrez 1 exploration well to further evaluate discoveries made south of Prudhoe Bay. The company has been exploring Ahpun and Kodiak, two prospects near the state’s Dalton Highway and Trans Alaska Pipeline System. Pantheon has contracted a Nabors Alaska drill rig for the work. Pantheon built a gravel pad in October near the Dalton to support the drilling. The pad can be used year-round. Pantheon has been working for several years in the area through its Alaska subsidiary, Great Bear Petroleum. Oil and gas has been discovered and the company is now working to firm up estimates of the resource before making a development decision. The project will involve horizontal production wells and multistage fracturing of reservoir rock to increase flow rates. In the established producing fields, Hilcorp Energy plans new drilling in the Milne Point field that will expand its production further. The company told the state Division of Oil and Gas it plans 19 wells, roughly half as oil producers and half to inject water to maintain reservoir pressures. Most of the drilling will be with large conventional “rotary” drill rigs but some will be with smaller “coiled-tubing” units where the drilling is done with flexible tubing mounted on trucks, which is less expensive than drilling with conventional rigs. Hilcorp has been incrementally increasing production at Milne Point though an aggressive development program. The company told state officials that Milne Point production averaged 35,757 barrels per day in 2021, 37,466 barrels per day in 2022 and 39,944 barrels per day in 2023. The company’s latest estimate 43,474 barrels per day, on average. — Tim Bradner — JUNEAU, ALASKA — AVAILABLE STATEWIDE operations@coastalhelicopters.com 907-789-5600 www.coastalhelicopters.com ✓ CONSTRUCTION ✓ EXPLORATION ✓ CONTRACT ✓ SUPPORT ✓ CHARTER Photo by Judy Patrick Hilcorp Energy remains active in the Milne Point field planning to add multiple wells.
THE LINK: WINTER 2025 22 Almost $11M goes to state, highest figure since 2018 The state’s North Slope “areawide” lease sales showed modest results this year. The annual auctions of non-leased lands are held in late fall. The Division of Oil and Gas published results Dec. 11 for the 2024 sales, which included three regional lease sale areas — the Beaufort Sea, central North Slope onshore, and the North Slope Foothills area south of the major producing fields. Bids showed continued interest by explorers in areas they were working, such as the eastern North Slope, but also new interest in state submerged lands in Harrison Bay, which is north of the producing Alpine field. The combined sale earned an estimated $10.9 million in cash bonus for the State of Alaska, the highest amount since the fall 2018 sales, the division said in an announcement. The state received bids for more than 184,000 acres from seven bidders across all lease sale areas. Alaska holds three “areawide” lease sales on the North Slope annually in the fall in which all unleased state lands in the onshore central Modest bids offered for North Slope leases Shutterstock Photo Most bids in the state’s annual lease sales come in the onshore central North Slope because of the proximity of infrastructure and oil field services.
Slope near existing large producing fields along with the Alaska Beaufort Sea submerged lands out to the state’s 3-mile territorial limit, as well as the “foothills” area near the Brooks Range in the southern North Slope. Most bids in the state’s annual sales come in the onshore central North Slope because there is extensive knowledge of the regional geology and because of the proximity of infrastructure and oil field services. The Trans Alaska Pipeline System’s Pump Station One is in this area as well as the Deadhorse industrial support center, which is adjacent to the producing Prudhoe Bay oil field. The Beaufort Sea areawide sale, which is in a higher-cost offshore area where there are environmental challenges, saw competitive bidding in Harrison Bay between EE Partners Corporation, which holds existing leases in the area, and Juneau Oil & Gas LLC, a new entrant into Alaska. Harrison Bay is a shallow-water area on state submerged lands just north of the producing Alpine oil field, which is onshore. Savant Alaska LLC and Lagniappe Alaska LLC, two companies that already have a significant stake on the North Slope, won additional leases, the oil and gas division said. Lagniappe Alaska is a subsidiary of Denver-based Armstrong Oil and Gas, an experienced North Slope explorer now working in the eastern North Slope onshore. Savant owns the small producing Badami oil field near the Beaufort Sea coast east of Prudhoe Bay. Another Alaska company, Captivate Energy Alaska Inc, expanded its acreage and a new entrant, Surprise Valley Resources LLC won a significant block of new leases. The North Slope Foothills sale area also saw its first bid in a decade, on state lands in the western end of the area beyond Umiat, a base camp in the far southeast boundary of the federal National Petroleum Reserve-Alaska. A small oil discovery was made at Umiat in the 1950s in exploration led by the U.S., which administered the reserve prior to the U.S. Bureau of Land Management assuming management in 1976. In a statement, Alaska’s Natural Resources Commissioner John Boyle said, “It is extremely promising to see new bidders and competition in this latest lease sale, especially as so many highly prospective areas are already under lease and being actively explored.” “We need to do everything in our power to support these newly leased areas becoming exploration prospects, future discoveries, and potential development opportunities that will support Alaskans for generations to come.” — Tim Bradner “It is extremely promising to see new bidders and competition in this latest lease sale, especially as so many highly prospective areas are already under lease and being actively explored.” — Alaska Natural Resources Commissioner John Boyle www.AlaskaAlliance.com 23
Company reports $267M income, $341M in taxes ConocoPhillips Alaska reported a net income of $267 million in the third quarter of 2024 but paid out more in taxes and royalties on its Alaska production, the company announced. During the quarter, the company paid an estimated $341 million in taxes and royalties, which includes $251 million to the State of Alaska and $90 million to the federal government. The taxes paid in Alaska include the company’s property tax payments to the North Slope Borough, the regional municipal government for the North Slope. Additionally, in the third quarter of 2024, ConocoPhillips invested $691 million in its Alaska capital projects, mainly in new development work. “Continued progress on projects like Willow and Nuna, along with our agreement to acquire certain Chevron oil and gas assets in Alaska, underscores our commitment to Alaska and demonstrates the effectiveness of the stable fiscal regime,” said Erec Isaacson, president of ConocoPhillips Alaska. The state Legislature enacted a major overhaul of its oil and gas production tax system in 2013, in Senate Bill 21. The legislation was controversial but it survived a citizen initiative to repeal it with a statewide vote. Alaska’s fiscal and tax system has been stable during the past 10 years, which encouraged new drilling and discoveries like Willow and Pikka, a find now being developed by Santos Ltd. and Repsol. Even though Willow is on federal land in the National Petroleum Reserve-Alaska the state’s production taxes are still paid, along with the state’s property tax on oil and gas facilities. In his December statement Isaacson said, “Year to date, we’ve invested more than $2 billion in Alaska projects, which surpasses our total 2023 capital expenditures. This investment creates jobs and promotes economic opportunities for Alaskans.” Since 2007, ConocoPhillips Alaska has incurred approximately $45 billion in taxes and royalties to the State of Alaska and the federal government. Of that amount, about $35 billion went directly to the state. In that same period, ConocoPhillips Alaska’s earnings were over $27 billion. ConocoPhillips is the only North Slope producer that reports its Alaska net income and expenses. — Tim Bradner THE LINK: WINTER 2025 24 ConocoPhillips cites commitment to state “Continued progress on projects like Willow and Nuna, along with our agreement to acquire certain Chevron oil and gas assets in Alaska, underscores our commitment to Alaska and demonstrates the effectiveness of the stable fiscal regime.” — Erec Isaacson, President, ConocoPhillips Alaska
43 Meet Alaska remains the best day and place all year to learn, connect and share what’s happening in Alaska’s energy and resource development industries this year — and in the future. Your support for the critical work we do is vital. Sponsorship levels are available ranging from $500-$5,000 and include company exposure to more than 500 industry professionals and media recognition. Watch for regular updates and registration information at AlaskaAlliance.com. To join us as a sponsor, email CEO Rebecca Logan at rlogan@alaskaalliance.com. MEET ALASKA 2025 Make plans now to join us March 21 at the Egan Center in Anchorage for the largest one-day energy conference in Alaska! MeetAlaska
THE LINK: WINTER 2025 26 ConocoPhillips begins production at its Nuna project
Project tapped to produce 20,000 barrels per day ConocoPhillips has started production at its small Nuna project on the North Slope, the company said in late December. The project was completed ahead of schedule and under budget, said the company’s Alaska President Erec Isaacson. Nuna is expected to produce about 20,000 barrels per day at peak production, ConocoPhillips has noted. Nuna was an undeveloped deposit in the Kuparuk River field that has been known for some time but developed only recently. The project had been expected to begin production in mid-2025 but is now producing early. Kuparuk River is a mature North Slope field that has been producing since 1981, and Nuna is the first new drillsite in more than a decade in the field. The project will add 29 development wells, on-pad infrastructure and pipelines that tie back to the existing Kuparuk River processing facilities. Drilling started in September and is expected to continue for several years at the new drillsite, which is designated as Nuna 3T in the field. It is the 49th drillsite built in the Kuparuk River field since production began. Nuna’s production module was built in Alaska and moved to the North Slope by barge from a fabrication site in Anchorage. North Slope contractors are busy with two larger new projects, ConocoPhillips’ new Willow field and Pikka, being developed by Australia-based Santos, Ltd., but smaller projects like Nuna make a contribution to the state’s economy. While smaller than Willow and Pikka, “Projects like Nuna create hundreds of jobs in Alaska, contribute to a stable local economy and demonstrate the remarkable resource development potential that Alaska’s older legacy fields still have,” Isaacson said. “The additional drilling opportunities we’ve identified at Nuna are a positive development that should increase oil production at Kuparuk. Our investment in this project was approved due to Alaska’s stable fiscal regime which is clearly working to promote new and ongoing investment.” Another small deposit, Coyote, was discovered east of Nuna in the Kuparuk field in 2021. It is now being produced. Nuna has a long history. Pioneer Natural Resources, an independent which previously operated on the slope, discovered Nuna in mid-2012. Caelus Energy, another independent, bought out Pioneer and took over as operator at Nuna in 2014. Nuna was a confirmed discovery and it was sanctioned by Caelus in 2015. About $480 million was invested in drilling and construction prior to the sanction, Caelus said at the time. A 2.5-mile road and 22-acre production pad was built, enough to qualify Nuna a for state royalty reduction. In the past year, ConocoPhillips has invested more than $2 billion in its Alaska projects, which include Willow and Nuna. Willow is planned for completion and startup in 2029. It will add an estimated 180,000 barrels per day to Alaska production in the following years. — Tim Bradner www.AlaskaAlliance.com 27 Nuna’s production module was built in Alaska and moved to the North Slope by barge from a fabrication site in Anchorage.
Red Dog Mine operator gets OK for infrastructure For years, one of Alaska’s largest mines has steadily depleted its ore while its operator has waited for a key federal permit to access new mineral deposits. In December, the U.S. Army Corps of Engineers approved the permit for Teck Alaska, operator of the Red Dog Mine, to build roads and other infrastructure to reach two new zinc prospects. It’s a significant step toward extending mining in the region, which will shut down in 2031 unless those new deposits prove economic. With the federal Clean Water Act permit in hand, Teck Alaska now says it will move ahead quickly with advanced exploration. The Red Dog Mine, one of the world’s largest zinc mines, is a major source of jobs in the region and accounts for more than 80% of the revenue for the Northwest Arctic Borough. It also has generated billions of dollars for Alaska Native corporations across the state since opening more than 30 years ago through the required sharing of NANA’s mineral profits required by the 1971 Alaska Native Claims Act. But the days for the Red Dog Mine itself are numbered: Running low on ore, the mine is set to close in 2031. Facing the prospect of diminished revenue for the borough — which comes through yearly, THE LINK: WINTER 2025 28 Teck Alaska pursues new mineral deposits Photos Courtesy Teck Alaska Red Dog Mine, one of the world’s largest zinc mines, has generated billions of dollars for Alaska Native corporations across the state.
www.AlaskaAlliance.com 29 OIL & GAS CONSTRUCTION SERVICES | MINING CONSTRUCTION & MAINTENANCE | POWERPLANT CONSTRUCTION | PIPELINE CONSTRUCTION | REMOTE VILLAGE INFRASTRUCTURE TELECOMMUNICATIONS | DESIGN BUILD & EPC | GENERAL CONTRACTING & MANAGEMENT | PROFESSIONAL PLACEMENT & STAFFING Commitment to Safety & Quality | Anchorage · Kenai · Deadhorse | www.conamco.com | 907-278-6600 BUILDING ALASKA ONE OUNCE AT A TIME CONAM’s track record of successful projects has proven that resource development can be done responsibly while protecting Alaska’s fragile environment. Our firm understanding of Alaska’s unique challenges and commitment to HSSE and planning have translated into satisfied mining clients across the state. We get dirty so you get the pay dirt. agreed-upon payments from Teck — regional elected officials have already been considering sharp cuts to government services. But Teck has long been examining its options to expand exploration into nearby state-owned land. The new permit allows the company to build about 10 miles of roads needed to access two zinc deposits, Aktigiruq and Anarraaq, that if developed could help sustain mining operations. Teck now has construction of the road underway. “We’re breathing a sigh of relief that the permit finally got approved,” said Dickie Moto, the borough mayor. “It means a lot for the borough and our residents.” The Army Corps permit covers the disturbance of nearly 20 acres of wetlands, and the construction of other infrastructure, like bridges and culverts, to support Teck’s exploration work. The company previously used small rigs flown in by helicopter, to drill test holes at Aktigiruq and Anarraaq. Now it plans to do more substantial exploration, including through an underground portal, which requires the road to bring ib heavy equipment. Teck anticipates that it will need at least six more years of exploratory drilling to determine if the two deposits can be mined economically. The company initially submitted a permit application in 2018 — then withdrew it a year later because it was missing necessary information related to historic preservation, according to John Budnik, an agency spokesperson. Teck resubmitted an application in 2022. — Max Graham, Northern Journal
THE LINK: WINTER 2025 30 Energy partner would lead, fund Alaska LNG effort The state’s Alaska Gasline Development Corp., (AGDC), has met a deadline set by its board of directors to begin a transition of the big project to private ownership. The company involved is New York-based Glenfarne Group, an industry infrastructure developer now engaged in bringing Gulf of Mexico liquefied natural gas, or LNG, projects into production. AGDC said the deal with Glenfarne is preliminary and details are still held private under confidentiality agreements. “Glenfarne confirms it has entered into an exclusive agreement with the Alaska Gasline Development Corporation for the development of the Alaska LNG project, including the Alaska Export Facility, Pipeline, and a Carbon Capture facility,” Glenfarne said in a statement. The company said it also will work with Alaska utilities to import AGDC: Framework in place for LNG project Some Alaska communities are facing pending shortages of natural gas used for heating and power generation.
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