May 13, 1966 Fairbanks

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May 13, 1966 Fairbanks - Biggest Drttttng Year Yet for Cook Inlet...
Biggest Drttttng Year Yet for Cook Inlet (EDITOR'S NOTE--The following article is reprinted from the current issue of "The Oil and Gas Journal."} The ice is out of the Cook Inlet, and Alaska's explorers are back in greater numbers than ever before. They're starting what will prove to be the busiest and costiliest year yet in one of the world's most hazardous drilling areas. Last week there were five overwater rigs at work. Two land rigs were busy at shoreline locations on holes whipstock- ed out under the inlet floor. Before the summer is out there will- be 10 offshore rigs wildcatting in the inlet. If the problems are few and the drilling targets not too deep and elusive, more than 20 holes will be punched before ice again halts operations. This figure does not include the 10 or more wells which will be drilled from the two permanent platform s already at work in Middle Ground Shoal field. Exploratory drilling won't be the whole story this year by far. Six new permanent platforms will be towed into the inlet and rigged up, hopefully in time for winter drilling from all of them to develop last summer's discoveries. This would mean offshore rigs after freeze-up this manent platforms to develop at .least four fields' and possibly six. Pipeliners will be busy, too, as Cook Inlet Pipeline Co. late this year starts construction of its 42-mile, big-inch line to handle production developing on the west side of the inlet. It's possible, too, that Pan American and its partners will decide to lay a 19-mile crossing of the inlet to deliver crude from the Tyonek area to the Kenai Peninsula (OGJ, Apr. 11, p. 47). THE OUTLOOK Activity will keep picking up as the months , pass. Some of the equipment that will be working later this year is now en Common Market Ministers Moving Ahead of Schedule BRUSSELS, Belgium (AP) -Ministers of the European Common Market cleared a major hurdle Wednesday by agreeing on financing of agricultural subsidies and reforms. They also agreed to do away with the internal trade barriers on agricultural and industrial goods by July 1, 1968 -- 18 months ahead of schedule. The farm financing issue has been one of the most controversial in the Common Market's eight-year history and was a major factor in the long crisis which threatened to disrupt the West European trade bloc last summer. The ministers agreed on the joint community financing of the cost of farm supports by July 1. 1967. This will apply to" all major farm products for which common rules and prices have been set. It is expected to cover all Common Market farm produce by July 1, 1968. To raise the level of farm efficiency throughout the community, particularly in the most backward areas like southern Italy, the cost of farm improvement will be borne partly from community funds. The means by which the six countries individually use to protect their farmers will then be replaced by a joint system and they will jointly finance subsidies. The Common Market's members are France. West Germany, Italy, Belgium, the Netherlands and Luxembourg. Europe Remains Possible Battleground, Admiral Says route, and some is still being built. All six permanent platforms are now in various stages of construction, with the first due to arrive in the inlet May 15, The last drilling rig to spud this summer will be a new jack- up being built for Placid Oil Co. and due to be delivered at the mouth of the Mississippi River next month. The rig is expected to complete its long voyage to Alaska in time to go to work about Aug. 1. The new season is bringing new operators to the inlet Atlantic Refining Co., for example, is putting two rigs to work to test for the first time its large holdings in the Trading Bay area. This is acreage held by Atlantic before the merger with Richfield, which has been a partner with Shell Oil Co. and Standard Oil Co. of California in earlier exploration. And Hunt Oil Co. and Placid are bringing rigs into the area for their first wildcats. The Hunt test, to be drilled from a bottom-supported submersible, will be the southernmost yet drilled in the inlet--a shallow- water location off the west coast of Kalgin island to test a 50,000-acre block held by Hunt. THE LINEUP Pan American--operator for itself, Skelly Oil Co., Sinclair Oil and Gas Co., and Phillips Petroleum Co--will be the busiest. The company expects to complete 11 wells in the inlet, using four offshore rigs and one land rig, not counting the drilling from its Middle Ground Shoal platform. Pan Am also will be towing three permanent platforms into the inlet, setting two on the Tyonek structure and the third between the forelands on the South Middle Ground Shoal. Each will have the capacity to drill 32 wells through its four legs, and each will mount two rigs, a heavy drilling rig and a workover unit, which can be used also for spudding and completion. Atlantic Refining Co. trill drill at least two wells, and probably more. It will spud the first about June 1 from the John C. Marthens, a jackup now en route to Alaska. For its second wildcat it will use the Wodeco IV, now nearing completion on the West Coast. The vessel is being built by Western Offshore Drilling and Exploration Co. to operate under a time-sharing agreement between Atlantic and Mobil Oil Co. Mobil presumably will take over the vessel for a cook inlet wildcat after Atlantic completes the first hole from it at Trading Bay. Texaco Inc. last week had run casing preparatory to testing its Nicolai Creek wildcat, a shore- based operation being whipstock- ed out under the inlet floor. This hole, west of the Moquawkie Indian Reservation at the north end of Trading Bay, has been active since before freeze-up last fall. Texaco also is reported considering taking over one of the offsmore rigs after freeze-up this autumn and using it in an ice- free location off the southern coast of Alaska. HOT RACE ON Union Oil Co. -- operator for itself and Marathon Oil Co last week was involved in an important race with Shell Oil Co. and its partners to complete the first hole on a structure off the West Foreland. If the structure proves productive, the winner of the race will gain as a prize a highly sought discovery allowable, an Alaskan exploration incentive which cuts the royalty from 12.5 to five per cent or 22.5 cents/ bbl for $3.00 oil, for 10 years. For a 500-b/d well this could mean more than $400,000 over the 10-year period. But since the royalty cut applies to the entire lease on which a discovery is drilled, the prize could run into the millions of dollars. Both companies had difficulty in spudding, principally because of the presence of huge glacial boulders, some of them 50 feet in diameter, which dot the inlet floor. Union, which spudded four times before starting a success- Peking Stepping Up Campaign Against 'Anti Party' Elements TOKYO (AP) -- Peking is stepping up a campaign against "antiparty" elements which the Red regime admits are threatening its existence. In an extraordinary move, the Chinese government has disclosed that rebellious groups which seek its overthrow now exist, not only among intellectuals, but in youth groups, the army and even in the Communist party itself. The existence of these wayward elements was made clear this week in a series of officially approved articles, editorials and ·lirectives. The Red Chinese leaders admit that the enemies of the 17- year-old regime "are generally 'authorities' and enjoy a certain ·reputation' " -- a sign that they* may include high-ranking Communists. The disclosures of these oppo- nents came after the publication of an abject confession by Kuo Mo-jo, winner of a Lenin prize and the acknowledged leader of the country's culture. The unusual admissions could be the prelude to a purge of "rightists" far deeper than that of 1957. The Liberation Army Daily, Red China's Army paper, said on Wednesday: "The current great struggle is being carried to greater depths." ful hole, got an early jump and had set surface pipe by the time Shell's hole was started. WHAT'S BEEN FOUND Cook Inlet discoverief *o ffcr all have been good ones. Norn has tested leas than 1,000 b/d. All oil found is of 30 degree gravity or higher. Too, some of the field* wUl turn out larger than they appear on the map. Operators generally expectthe Tyonek wells of Pan Am and the Granite Point well of Mobil to be linked up and prove a huge field underlying a structure extending southward from the shore of the Moquawkie reservation. The Mobil well, in which Union holds an interest, is believed to be on the southern nose of the structure. Operators also expect to see a linkup between present production of the Pan Am and Shell groups on Middle Ground Shoal with the Pan Am discovery at South Middle Ground Shoal. INVESTMENT GROWING With the expansion in announced activity since the first of the year, it is now expected that the industry will spend more than 3150 million in Alaska this year. And operators are expected to spend the greatest share of this sum in the Cook Inlet. If it does, this will bring the industry's investment in the state to the $600-mUliGn level, or more than four times the total gross return since the first oil discovery was put on the books at Swanson River nine years ago. And if 1966 produces a long summer and a late freeze, early estimates of 30 wells and a $150- million expenditure could prove to be modest. AUTHORIZED DEALERS CHRYSLER MOTORS CORPORATION

Clipped from
  1. Fairbanks Daily News-Miner,
  2. 13 May 1966, Fri,
  3. Page 8

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