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Oil company expands its West Sak project on North Slope

Posted: February 21, 2014 - 12:04am

ConocoPhillips has submitted applications to regulatory agencies to expand the company’s West Sak viscous oil production in the Kuparuk River field, the company announced Tuesday. The project is the third in series of new North Slope developments the company has announced in the last year.

The “1H NEWS” (North East West Sak) project would involve a nine-acre extension to the existing Drill Site 1H to support new wells and associated facilities, and would result in additional production of approximately 9,000 barrels of oil per day at peak, according to the company press release.

West Sak is a deposit of viscous oil within the Kuparuk River field that ConocoPhillips has been developing in increments. The oil is thicker and more difficult to develop than conventional oil.

Project approval for 1H NEWS is anticipated in late 2014, according to ConocoPhillips, with construction beginning in 2015. Construction would continue through 2016, with first oil in early 2017. Cost for the project is estimated at $450 million. The project will provide about 150 jobs during construction.

The 1H NEWS development is the third new project initiated by ConocoPhillips since the state Legislature passed an oil tax reform bill, the More Alaska Production Act, in April 2013.

The company also announced plans to pursue development of a project in the National Petroleum Reserve-Alaska, the Greater Moose’s Tooth 1 development, and Drill Site 2S in the Kuparuk River Unit.

“Combined with 1H NEWS, these three new projects would represent an investment of about $2 billion, significant new production, and jobs for hundreds of workers during construction,” said Trond-Erik Johansen, president of ConocoPhillips Alaska.

“In addition to our plans for these new projects, we have also added two rigs to the Kuparuk (drilling) fleet. These rigs are already adding production and providing several hundred new jobs for Alaskans,” Johansen said.

ConocoPhillips said it believes the improved business climate created by tax reform will add new revenue for the state and tens of thousands of barrels of new production from the North Slope. The company expects to have more North Slope production-adding investments to announce in the near future, the press release said.

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Earl Richards
Earl Richards 02/22/14 - 01:26 am
ConocoPhillips Spin

These production plans were decided well before the passing of BS 21 into law. Most of the jobs will go to workers and supervisors from Oklahoma and Texas. The small Alaskan oil companies can very easily create jobs, if they are not being squeezed by the Koch brothers, ExxonMobil, BP and ConocoPhillips. The "improved" business climate will not increase Alaska revenues, because with the elimination of the $2 billion per year progressive surcharge, with BS 21, Alaska will lose $2 billion per year in revenues. To improve the business climate, the Big Three and the Koch brothers have to stop squeezing-out the independents and the small Alaskan, oil companies.

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