Daily Management Review

A little-known company discovered a major oil field in Alaska


A little-known energy company Caelus Energy announced discovery of a major offshore oil field in Alaska.

A large oil field has been discovered in the Alaska offshore in the Gulf of Smith, which is about 480 kilometers north of the Arctic Circle. According to The Wall Street Journal, the discovery belongs to a little-known American energy company Caelus Energy.

The company said the new field’s reserves range from 1.8 billion to 2.4 billion barrels. These figures have not been confirmed yet, but if true, the discovery would be "significant" and mine reserves would bypass Exxon Mobil’s field discovered in 2015 off the coast of Guyana in South America, notes the WSJ.

For transportation of crude oil, Caelus Energy plans to build a 200 km long pipeline priced at $ 800 million. According to the newspaper, this idea could be supported by the state leadership, which has recently been faced with a sharp drop in oil revenues. Gov. Bill Walker said that the state government are eagerly waiting to see a new pipeline. The Governor also expressed his belief that modern technologies and established standards will enable to produce oil without harm to the environment.

The first oil was discovered in Alaska back in the 1970s. Then, the US government welcomed the opening because of high oil prices, but the Middle Eastern countries were dissatisfied and threatened to stop selling US oil, writes the WSJ.

In 2015, Royal Dutch Shell stopped work on the shelf off the coast of Alaska. The reasons for this performance was poor reconnaissance of key wells in the Chukchi Sea and the high costs. Reuters wrote the company has spent about $ 7 billion on exploration in the region. Activities of Shell in the Arctic also were also impeded by environmentalists. In the summer of 2015, Greenpeace activists tried to stop Shell’s floating production platform, which was preparing to go from Seattle to research fields in the Arctic Ocean.

Alaska ranks second in the United States for oil extraction. The state brings 20% of total production in the US. There are vast reserves of oil and gas in the upstate. Local Prudhoe Bay is the largest field in the United States (8% in US oil production). Oil is transported to the port of Valdez on the southern coast of Alaska trough Trans-Alaska Pipeline System built in the seventies of the XX century. The pipeline length is almost 1,300 kilometers; it is constructed from pipes with a diameter of 122 cm. Its capacity is about 340 000 m3 per day. 

The northwest of the vast territory occupies the National Petroleum Reserve. This is land with explored oil reserves, but production is not underway there. According to various estimates, local oil reserves range from 800 million to one billion barrels, gas - 53 trillion cubic meters. In 2010, the USGS found that the volume of proven oil reserve in the National account for only one tenth of the possible reserves. 

source: wsj.com