Energy

Oil flows from Greater Mooses Tooth-2, ConocoPhillips’ latest North Slope project

conoco

ConocoPhillips continued its march west on the North Slope this week with the startup of oil production from its second development in the National Petroleum Reserve-Alaska.

The Houston-based producer announced Tuesday that oil started flowing from its $1.4 billion Greater Mooses Tooth-2 field Sunday — on time and under budget, according to the statement.

The westernmost oil project on the Slope, GMT-2 is expected to reach peak oil production of about 30,000 barrels per day from 36 wells that are in the process of being drilled. The company currently has a handful of wells completed.

It is a satellite drill site to ConocoPhillips’ large Alpine field, which is where the new oil will be processed. GMT-2 extends road access about eight miles south and west into the federal area from the $700 million Greater Mooses Tooth-1 drill pad that started producing oil in late 2018.

ConocoPhillips Alaska President Erec Isaacson thanked North Slope stakeholders for working with the company to allow GMT-2 to go forward.

“The GMT-2 team safely executed this project in an environmentally responsible manner, marking another successful milestone for development in the NPR-A. Projects like these create hundreds of jobs in Alaska and contribute to a stable Alaska economy,” Isaacson said. “We appreciate the collaboration with stakeholders from Kuukpik Corp., the community of Nuiqsut, the North Slope Borough and (Arctic Slope Regional Corp.) that made it possible.”

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ASRC holds a portion of the mineral rights to the area.

ConocoPhillips first submitted permit applications to the Bureau of Land Management for GMT-2 in 2015. Construction of the project spanned three winter seasons and provided about 700 construction jobs, according to the company.

The State of Alaska’s oil production tax applies to the oil produced from the federal area, and while half of the 16.67% federal oil royalty revenue is sent to the state, the state does not receive direct royalty payments from the production. Written into federal statute, the money sent to the state funds a grant program aimed at offsetting the impacts of oil development on nearby North Slope communities.

ConocoPhillips also expects to develop its $8 billion Willow project farther west in the the NPR-A in the coming years; however, construction of that very large oil field is on hold due to legal challenges of its federal environmental permits.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Elwood Brehmer, Alaska Journal of Commerce

Elwood Brehmer is a reporter for the Alaska Journal of Commerce. Email him: elwood.brehmer@alaskajournal.com

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