ConocoPhillips plans new well in Alaska national reserve

ANCHORAGE, Alaska Sat Aug 10, 2013 1:38am EDT

ANCHORAGE, Alaska (Reuters) - ConocoPhillips (COP.N) has applied for permits to develop a new field in the National Petroleum Reserve in Alaska, a vast unit of federal land that has yet to yield commercially produced oil, according to the federal agency managing the reserve.

ConocoPhillips applied to drill a production well at a site it calls GMT1, part of the Greater Mooses Tooth unit established in an area where its exploration wells struck oil, Bureau of Land Management (BLM) spokeswoman Erin Curtis said on Friday.

The company has also applied for a permit to build roads and other infrastructure needed to access the site, Curtis said.

A decision by senior corporate leaders on whether to sanction the project is expected in the second half of 2014, said Amy Burnett, a spokeswoman for ConocoPhillips in Alaska.

The Indiana-sized reserve, on the western side of the North Slope, was established in 1923 by President Warren Harding to provide fuel to the military.

However, the big North Slope oil discoveries and all production to date have been east of the reserve on state land in and around the Prudhoe Bay and Kuparuk fields.

Conoco, with minority partner Anadarko Petroleum (APC.N), aims to change that pattern and produce oil from federal land on the North Slope. They have been the most active explorers in the reserve since the BLM launched a series of lease sales in 1999.

The companies are developing another field, called CD-5, on the far eastern edge of the reserve that is expected to come on line in 2015. CD-5 would be linked by pipeline and a road to the Conoco-operated Alpine field under the company's plan. CD-5 construction is expected in the winter of 2014, Burnett said.

That development was delayed by a dispute over a wetlands-fill permit needed to build the road, pipeline and an aircraft landing strip. The Army Corps of Engineers then issued it a permit in late 2011 after Conoco, the Fish and Wildlife Service and other organizations negotiated a compromise plan.

Expansion at GMT1 was eased by the planned CD-5 development, Burnett said in an email, adding that a recent controversial cut in state oil taxes also helped.

The plans to expand in the reserve come after Conoco put ambitious offshore Arctic plans on the back burner. It said in April it would not seek to drill in 2014 in the remote Chukchi Sea off northwestern Alaska, where it spent more than $500 million in 2008 to acquire leases.

Other companies also have plans to drill in the reserve. Three permits are held by Australia-based Linc Energy and two by Houston-based Hilcorp, both relatively new operators in Alaska.

The U.S. Geological Survey estimates the sprawling reserve contains 896 million barrels of technically recoverable oil. It is also home to wildlife and considered by the region's native Inupiat people to be an important area for fishing and hunting.

The BLM plans another lease sale in November, the ninth in the series that started in 1999. Curtis said the level of industry interest is as yet unclear.

(Writing by Braden Reddall)