* At $90 a barrel 500 million barrels could be recovered
* U.S. downgrades total oil in reserve, sees more natgas
WASHINGTON May 4 Rising crude prices have
boosted the amount of oil that can be recovered economically
from Alaska's National Petroleum Reserve, even though the
military reserve site holds less oil than previously thought,
the government said on Wednesday.
Some 500 million barrels of oil is recoverable at $90 a
barrel while 273 million barrels could be produced with crude
priced at $72 a barrel, according to the U.S. Geological
Survey. Oil is now trading close to $110 a barrel.
The 23 million-acre National Petroleum Reserve - about the
size of the state of Indiana - was created in 1923 as a fuel
source for the U.S. military. It is located in the northwest
corner of Alaska near the Arctic National Wildlife Refuge,
which the Bush administration tried to open for exploration,
with environmental groups opposing the effort.
In October, the USGS revealed that the reserve only holds
about 896 million barrels of oil, or about a tenth of the 10.5
billion barrels it estimated in 2002 for the area.
It said this is due to the companies involved finding more
natural gas than oil.
About 18 trillion cubic feet of natural gas would be
profitable to recover with a market price of $8 per thousand
cubic feet, 32 trillion cubic feet could be produced if the gas
price was $10.
There is no pipeline to carry gas from the reserve so the
agency assumes there would be a 10- to 20-year delay in
producing gas from the reserve.
ConocoPhillips (COP.N) has been the most active explorer in
the reserve since the Bureau of Land Management began lease
sales in 1999.
ConocoPhillips has also explored in partnership with
Anadarko Petroleum Corp (APC.N) and Pioneer Natural Resources
(Reporting by Tom Doggett; additional reporting by Yereth
Rosen in Anchorage, Alaska; Editing by David Gregorio)