A New Era for Alaska's North Slope: The "Charter for Development"

Strategic Insights -

The BP Amoco and Alaskan government have created a groundbreaking agreement, known as the "Charter for Development of the Alaskan North Slope," aimed at transforming the oil industry and securing a brighter future for Alaska. This ambitious initiative involves increased investment, production, and state revenue, marking a significant shift from the initially proposed Arco acquisition. The charter's provisions include reduced stakes in oil fields, expanded exploration opportunities, and a new business unit to move natural gas to market. BP Amoco is committed to hiring, building, and buying in Alaska, and the charter addresses environmental concerns by prioritizing double-hull tankers.

Key Takeaways:

  • The charter reduces BP Amoco's stake in oil fields, including the Alpine and Kuparuk fields, and sells at least 175,000 barrels a day of North Slope production.
  • The second-largest field in North America, the Prudhoe Bay oil field, will be operated by one or two major oil companies.
  • BP Amoco will sell buyers sufficient capacity in the Trans-Alaska Pipeline System (TAPS) and feeder pipelines to move their oil to market.
  • The company will market TAPS capacity to finders of new fields and sell North Slope seismic and well data where possible.
  • BP Amoco will market 620,000 acres of highly prospective state and federal exploration acreage, with the state's help.
  • The charter forms a new business unit to pursue all options for moving North Slope natural gas to market.
  • BP Amoco will support exploration efforts by locating its Global Gas Technology Center in Alaska.
  • The charter makes up to 1.2 billion standard cubic feet of North Slope natural gas available to commercial projects daily.
  • BP Amoco will increase contributions to the University of Alaska and community and civic organizations, tying giving to Alaska production for the first time.
  • The charter prioritizes environmental issues, including the speedy replacement of BP Amoco's tanker fleet with double-hull tankers.

Statistics:

  • $5 billion: The initial investment offered by BP Amoco for the proposed Arco acquisition.
  • 175,000 barrels a day: The reduced North Slope production stake sold by BP Amoco.
  • 620,000 acres: The highly prospective state and federal exploration acreage marketed by BP Amoco.
  • 1.2 billion standard cubic feet: The maximum daily supply of North Slope natural gas available to commercial projects under the charter.
  • Three "Millennium" class double-hull tankers: The vessels BP Amoco has committed to bring to Alaska.

Sources:

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