Frontiers 89: Inside the Oil Patch — BlueCrest’s Breakthrough
Normally when we talk about the oil industry in Alaska, we usually focus on the major producers – BP, ConocoPhillips and ExxonMobil. But in this week’s Frontiers we look at one of the “little guys” — BlueCrest Energy and its drill site near Anchor Point.
BlueCrest is an independent oil company based in Fort Worth, Texas. It was formed by Benjamin Johnson, a 1975 graduate of Kenai Central High School who went on to become a petroleum engineer. Johnson, who is president of BlueCrest, partnered with a group of longtime oil industry and finance experts. Together they attracted a large oil industry firm in New York to bankroll the project.
BlueCrest is one of the beneficiaries of Cook Inlet drilling incentives created by the Legislature to increase dwindling supplies of Cook gas. BlueCrest said those incentives have led to almost a half billion dollar investment in the Cook Inlet Cosmopolitian unit.
It’s the fifth company to explore the prospect, named for a group of Atlantic Richfield Company (ARCO) geologists who fought a transfer to company headquarters in Texas. Their bosses joked they weren’t “cosmopolitan” enough to work anywhere else but Alaska.
The name stuck and last year the geologists, who believed there was a significant amount of oil to be found at Cosmopolitan, were validated.
With help from a jack-up rig, which included a $23 million investment from the Alaska Industrial Export Development Authority, BlueCrest began producing its first barrels of oil last year.
Although BlueCrest draws only a few hundred barrels a day from Cosmopolitan right now, someday it hopes to tap as many as 17,000 barrels a day.
Currently, about 200 jobs are connected to the project, but tax credits are now being phased out and the project must survive on its own merits.
Some of the highlights of this week’s show:
- Inside BlueCrest: A look at the state of the art technology being used to drill in Cook Inlet.
- Risks and Rewards: A look at how oil tax credits played a role in developing BlueCrest’s Cosmopolitan project.
- Oil Tax Credit Debate: With another multi-billion dollar budget shortfall ahead, lawmakers gear up for another contentious session.
- BP Teachers of Excellence: KTVA’s Emily Carlson and photojournalist Carolyn Hall follow a group of school teachers to the North Slope, where they hope to bring what they learn back into the classroom.
There are many issues involving the BlueCrest project that we did not have sufficient time in this show to discuss – including the company’s plans to frack for oil this April. BlueCrest said it will use new technology to control the fracking to a limited area, well below the sea floor. Some environmental groups still worry about the risk of water pollution.
Alaskans, unless directly involved in the oil and gas industry, often don’t understand what it takes to get a project like BlueCrest off the ground — that it may be seven years before the Cosmopolitan unit has paid off its debts, begun to earn a profit and contribute to the state’s coffers. I hope this show gave you some insights into the role smaller, independent producers play, but it’s by no means the last word on the subject.
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