Tuesday, September 28, 2010

Oil Spew Commission Focused on Alaska

President Obama's Oil Spew Commission pondered the impact of an oil spill in sensitive Arctic regions, specifically Alaska.  They discussed Alaska's National Petroleum Reserve and the Chuckchi Sea.  Co-Chair William Reilly asked about the impact of drilling delays, which impacts ConocoPhillips.

ConocoPhillips is Alaska’s largest oil and gas producer and the largest owner of state and federal exploration leases, with approximately 1.8 million net undeveloped acres at year-end  2009. Approximately 0.8 million of those acres are in the National Petroleum Reserve-Alaska (NPR-A). 

Chukchi Sea--Conoco Phillips was one of the major participants in the Chukchi Sea federal Outer Continental Shelf (OCS) lease sale held in February 2008. The company was a successful high bidder on 98 OCS tracts, or 0.56 million acres, with total lease costs of $506 million. Plans continue to progress for drilling an exploration well on the Chukchi Sea leases in 2012 or later. In January 2010, Conoco Phillips exchanged a 25 percent working interest in 50 of these leases for cash consideration and additional working interests in the Lower Tertiary Play of the deepwater Gulf of Mexico.

While Reilly took a leave from ConocoPhillip's Board of Directors, his stock holdings remain.  Reilly's ConocoPhillips stock is impacted by drilling decisions on Alaska and the Gulf of Mexico.  That puts Reilly in a sweet crude spot.

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