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GETTING THE GOODS TO Alaska's Oil and Gas Industry.

Oil-field support providers help oil producers and make a dynamic impact on Alaska's economy.

A study on Alaska's oil and gas industry released this year revealed the industry spends $2.1 billion annually in the state-about equal to the State of Alaska's general fund spending ($2 billion). The Economic Impact of the Oil and Gas Industry on Alaska-the first statewide study that captured oil and gas employment and spending impacts-was commissioned by the Alaska Oil and Gas Association and the Alaska Support Industry Alliance. Research was conducted by Information Insights, based in Fairbanks, and The McDowell Group, based in Juneau.

Key findings showed the oil and gas industry spends $1.7 billion on goods and services in the state. Payroll expenditures pump another $4 million annually into the economy. Industry standards demand top quality performance products for that money, and Alaska's oil-field service providers are measuring up. Consider the Alpine oil field located on Alaska's North Slope, which started up in November 2000.

"Alpine was one of those projects that support contractors in Alaska had to step up to the plate," said Dawn Patience, spokesperson, Phillips Alaska Inc. "There were lot of firsts involved."

Some of those firsts included horizontal drilling; road-less development (creating ice roads for winter use); and enhanced oil recovery, a process that creates a solvent that sweeps oil out of rock better than water, explained Mark Ireland, Phillips' subsurface manager.

"The Alpine field continues to be a real bright spot across the industry, especially for Phillips," Patience continued. "Doyon Drilling, for example, has hit 98 percent of its target in the Alpine reservoir."

Doyon Drilling, along with a few other oil-field service providers, show how they get the goods to Alaska's oil and gas industry, as well as meet the demand for quality performance.


The largest distributor of gases and welding supplies in North America, Airgas is relatively new to the Alaska marketplace. The company opened its doors in the state in 1996. Its main warehouse and distribution center is situated in Anchorage; branches are established in Kenai and Fairbanks.

Airgas is also the third largest distributor of safety equipment in the nation, and that's a big part of what the company is about in Alaska. Aggressively moving forward as one of the premier suppliers for safety equipment, Airgas has established strong alliances with Nabors Alaska Drilling, Doyon Drilling and others who support BP Exploration (Alaska) Inc. and Phillips in the state.

Airgas represents a full line of respiratory protection, gas detection and other personal protection equipment, such as hardhats, chemical suits, gloves and more. "Some of this equipment is very technical and the end users need to know when and how to operate (the items)," said Mike Stoddard, safety sales leader. "So we train them."

With the assistance and guidance of toolpushers and supervisors, Airgas helps others in the petroleum industry design safer apparatus, such as retractables (lifelines) for use when someone is climbing up and down on an oil rig or platform or around cellars or derricks. They also provide egress (exit) signs, logos for hard hats, flame-retardant coveralls and more. The company will also do walk-throughs on drill rigs with the drilling companies who work for BP or Phillips. Airgas is there to help identify lack of signs; eye wash stations; fall protection; respiratory, hearing, eye protection and so on, as well as supplying sound-level monitoring equipment. The main purpose is to assist and to recommend the appropriate safety protection in all categories with the client safety team.

For example, VECO recently completed BP modules for Northstar, and Airgas helped from ground to finish with welding training-how to handle compressed gases, handle torches safely, respiratory protection, fall protection and more. "It was an ongoing request from the Port of Anchorage to assist in their new hire and awareness training class," Stoddard said.

Training levels are designed to customers' needs, and for the most part, training is free. Airgas also utilizes its manufacturers regularly for competent or certified training requirements.

"We're definitely a customer-focused company," said Mark Bradley, general manager. "We're strive to meet the needs of our customers."

Airgas tries to work as an unpaid employee for its customers, helping with the planning and development of their safety programs. "It's all a significant part of what we do," Bradley said.

The company's growth curve has been rapid since its arrival in Alaska. Beginning as a startup operation in 1996, Air-gas has increased annual sales to $10 million in 2000. "Our sales have grown steadily each year," Bradley said, "And we're still on a development track."


A worldwide industrial supply firm specializing in hose, fittings, accessories and rubber products, Alaska Rubber Supply was incorporated in the state in 1981. The company provides product to the oil; mining; fishing; timber; construction; federal, state and municipal agencies; and wholesale trade industries throughout the state of Alaska. "Anybody who has a piece of equipment-we're there," said Janeece Higgins, general manager since 1995.

A small amount of product, primarily Arctic hose, is shipped to the Lower 48, as well.

The company's 16,000-square-foot physical plant is situated on the Old Seward Highway in Anchorage. Capabilities include hydrostatic testing and certification of hose assemblies; belt slitting-up to 72 inches wide; metal hose fabrication; pressure testing; engineering, design and consultation; repair for fuel and lubrication equipment; and 24-hour emergency service, among other skills.

For clients such as Nabors Alaska Drilling and Doyon Drilling, among others, personnel from Alaska Rubber travel to the customers' drill rigs and train their staff to make emergency repairs.

Customer service is paramount, according to Higgins. "All of our customers are important," she said. "We don't take anything for granted."


BJ Services Company, U.S.A., is a global provider of high pressure pumping systems. The company also provides coiled tubing, coiled tubing drilling, casing and tubular services, pipeline and industrial commissioning, inspection services and specialty chemicals in selected geographic markets. Specific to Alaska, BJ Services has been a major provider of services for over 25 years.

"At the present time our primary activities are focused on the Kenai Peninsula and Cook Inlet," said Jay Garner, Alaska business development manager. "This is the result of a strategic decision by Alaska and corporate management to focus our efforts on the area that can deliver the greatest return on investment to our shareholders."

The company is keen to move back into a major role at the North Slope and is taking a hard look at all available business opportunities. However, providing quality services to its current business partners in the Kenai Peninsula and Cook Inlet is priority number one.

BJ Services, which operates on a fiscal year ending Sept. 30, reported nearly $228.2 million of operating income on almost $1.06 billion of revenues for the first half of fiscal 2001-161 percent higher than the same period in 2000.

BJ Services has experienced significant growth globally through strategic acquisitions, purchasing companies that have focused on one product line-pressure pumping services. This focus is one of the strongest attributes of the corporation. "However, its expected acquisitions will start taking a back seat to internal reinvestment, building more efficient equipment for specific field applications; higher horsepower pumps with expanded automation capabilities," Garner said. "Research and development will continue to play a strong role, especially in well stimulation."

BJ maintains a region office in Anchorage and district offices in Kenai and Deadhorse. "We're keen on the future of the oil and gas industry in Alaska and are committed to operating our business as a valued neighbor in the community," Garner said. Our industry is making significant strides to get back on top; We are excited to be a part of it."


Dowland-Bach Corp. is a 100 percent Alaskan-owned company established in 1975 to meet the need for fail-safe wellhead shutdown systems at the Prudhoe Bay oil field. Since then the corporation continues to support Alaska's industries with a wide variety of manufactured products. Continually promoting the concept of "vertical integration," Dowland-Bach has been dedicated to the development of a skilled staff who can design and manufacture industrial control equipment from the ground up.

"Our vision is to build high-quality, world-class, competitive and respected systems for skids and small modules in Alaska by Alaskans," said Lynn Johnson, president and cofounder.

As technology and the business environment have evolved, so has the company's production capabilities. Today's core capabilities include the manufacture of hydraulic/pneumatic control equipment packages, custom stainless steel enclosures/structures, and UL Listed industrial control panels (electrical).

The corporation has produced a variety of hydraulic and pneumatic control equipment packages that have ranged in complexity from simple helium filling stations to hydraulic pressure maintenance/shutdown systems that control the operations of entire sections of petroleum production facilities. Hydraulic control equipment packages-with operational hydraulic fluid pressures of up to 10,000 pounds per square inch and available hydraulic fluid volumes of over 100 gallons-have been manufactured for Arco Alaska (now Phillips), BP and Alyeska Pipeline.

Over the last quarter century, Dowland-Bach's equipment package designs have been affected by the industry's attempt to reduce the size of production facilities in an effort to reduce capital costs. As a result, more functionality has to be squeezed into smaller spaces, at the same time meeting stricter design codes. At that time manufacturers of industrial enclosures did not encompass the requirements that most of Dowland-Bach's customers were requesting. This phenomena presented an opportunity to the company to build custom, stainless steel UL enclosures.

As successes with this continued, the corporation decided to take the next step in the "vertical integration" process. Dowland-Bach obtained its UL50 Electrical Enclosure Certification for type 3R (rainproof) and 4X (watertight/corrosion resistant) enclosures, which allowed for the company to manufacture customized electrical enclosures that met customers' space and mounting constraints.

Furthermore, Dowland-Bach is an Underwriter's Laboratories Listed Panel shop with the capabilities of manufacturing UL5O8 industrial control panels and UL698 industrial control panels for use in hazardous environments. The corporation has produced such panels for use in various gas, oil and pipeline facilities throughout Alaska.

In addition to designing, engineering and building highly specialized systems, Dowland-Bach also is involved in distribution of stainless steel tubing, pipe and fittings, as well as other instrumentation system components. Furthermore, the company has stretched outside of Alaska's bounds by building and shipping wellhead safety systems to South America. "We work hard at diversifying," Johnson said.


Beginning with one contract and one drill rig, Doyon Drilling Inc. has become an industry leader with a notable record in innovation, profitability, safety and shareholder hire. Now in its 19th year of operations, DDI has established a fleet of five modernistic rigs situated on Alaska's North Slope.

Doyon Drilling is a subsidiary of Doyon Ltd. With the 1971 ANSCA (Alaska Native Claims Settlement Act) land entitlement of 12.5 million acres, Doyon Ltd. is the largest private landowner in North America today. However, by 1981 the corporation had almost depleted its $54.5 million also received under ANOSA. The start up of the drilling subsidiary helped move the Native corporation into the black. Since its inception in 1982, DDI remains Doyon's most profitable subsidiary.

"We're real proud of the company," said Ron Wilson, DDI general manager. "We've changed a lot of standards on the North Slope. We've set a lot of records."

DDI's first contract with Arco Alaska Inc. to development drill the Kuparuk oil field called for the manufacture of a state-of-the-art drilling rig. DDI designed and fabricated Rig 9, the first self-propelled, wheel-mounted rig completed for the North Slope. In 1997, Rig 9 was retrofit for development drilling of the Alpine field. Today it's known as Rig 19.

Doyon Drilling continued to advance the industry with the construction of each new rig. Designed for maximum versatility, the company's rigs, weighing more than 1,200 tons and at least 16 stories high, are some of the most technically advanced in the industry. Doyon's second drill rig, known as Rig 15, consists of two modules and features a cantilevered rig floor. Rig 14-a single-module, cantilevered rig-was DDI's next benchmark engineering exploit. Further innovation followed about two years later with Rig 16, a highly mobile completion and drilling rig also designed for workover.

In 1995, the drilling company identified an opportunity for potential work for an additional rig at the Arctic Slope oil field to drill infield development wells and winter exploration wells. However, such work is just a limited service operation; it didn't make economic sense to build a new rig. Consequently, DDI studied the design of Parker Rig 141 and distinguished the most cost efficient manner to upgrade the rig so it could also be utilized in the normal course of North Slope drilling activities. DDI then entered into a joint venture with Parker Drilling. With DDI acting as operator, Rig 141 was renovated as an exploration rig for the North Slope and helped for the development of Alpine and Tarn oil fields. In 1998 DDI bought out Parker Drilling's interest and is now the sole owner/operator of Rig 141. It consists of seven separate modules, thus spreading the overall weight and reducing ground contact pressures, making Rig 141 one of the most ice-road friendly on the North Slope in its category. Further, its lightweight configuration means less time mobilizing and more time over the hole, which makes for significant approved field expenditure savings.

"When you have a very efficient rig, then add very competent crews that know how to get the job done, along with all the other service companies and Phillips working together, you end up with excellent wells-which gives you a very high success rate," Wilson said.


Since 1963, Nabors Alaska Drilling Inc. has been a leading contractor on Alaska's North Slope. Nabors and its predecessor companies drilled the discovery well and confirmation wells on the mammoth Prudhoe Bay field. Nabors holds numerous drilling records in the state and was one of the forerunners in horizontal drilling, which was initially activated full-scale on the North Slope. Horizontal drilling permits drilling to diverge sideways through the reservoir to access greater sectors of oil-bearing rock. The technology has been successful in tapping smaller pools of oil.

At this time Nabors Alaska Drilling has contracts on 14 highly specialized arctic drilling and workover rigs on the North Slope and operates one conventional rig in the Kenai/Cook Inlet area, as well as Rig 429, which operates on the offshore Osprey platform, owned by Forest Oil Corp. Rig 273 recently joined Nabors' Alaska's operations, arriving in Anchor Point from Wyoming. Headquartered in Houston, Texas, Nabors Drilling is the largest land-based drilling contractor in the world.

On Alaska's shores, Nabors Alaska Drilling is excited about its "School for Roughnecks" established this year at the Peak Oilfield Service Co./Nahors Alaska Drilling base camp in Deadhorse. The Fundamental of Rotary Drilling, the school's official name, was a concept developed through discussions between Nabors and BP. The curriculum covers everything from site preparation to completion, including major systems and components and their terminology, according to Clyde Treybig, Nabors Alaska quality and marketings manager. Following classroom instruction, students continue schooling by cross-training on a variety of rigs to maximize drill rigs experience.

Nabors Alaska is also jazzed about its new EMS, or Environmental Management System, The EMS was developed by the company to identify and ultimately minimize the possible effect to the environment as a result of drilling activity. "We think this is a very positive step Nabors has taken to protect not only the environment, but also our workers as well." said Treybig.

The EMS protocol states, among other things, that "most improvements originate from employees directly involved with the activity that is at the root of the environmental impact-in other words from the employee doing the work. As with everything we do, employees at all levels of the organization are at the heart of our success."

Nabors Alaska has a heart for its employees and the communities they live and work in. "We contribute to worthy causes in our communities in Alaska in an effort to do our part to help our neighbors," Treybig said.

At this time, the drilling company contributes to local organizations such as The Anchorage Symphony, The Food Bank of Alaska, Anchorage Center for Families, Junior Achievement, Boys and Girls Club and Big Brothers and Big Sisters. Additionally, Nabors Alaska Drilling contributes to the United Way, where the company matches employees' pledges to the nonprofit organization. "This year the total is over $100,000," Treybig said.


A general contractor in Alaska, Peak Oilfield Service Co. provides a comprehensive range of oil-field services designed to provide logistical support for oil and gas field units. Services include water and general hauling; road, pad and camp maintenance; ice roads and gravel islands; civil and mechanical construction; equipment repair and rental, warehousing, snow removal; and heavy equipment and crane service.

The company holds several active contracts throughout the state from the North Slope to Valdez, including large operations in Cook Inlet and Prudhoe Bay. In Cook Inlet, for instance, Peak provides materials and construction operations for offshore and onshore gas facilities. And on the North Slope the company provides drill support, handles rig moves, maintains equipment and builds ice roads. In fact, they built 200 miles of ice roads last year alone.

Technological advancements in ice pad design help support winter exploration and minimize the impact on the environment. For example, the Alpine field features roadless development, which operates much like offshore development. In the winter, an ice road from Kuparuk to Alpine is built to move in a year's worth of supplies. Vehicles pour water on a route to build an ice road thick enough to withstand the weight of heavy-duty rigs. At some places, an ice road can be 10 feet high. Modules can weigh in at around 2 million pounds, but ice roads make it possible for the enormous equipment to be moved along the route without carving a road or damaging the tundra.

"A lot of science goes into it," said Mark Ireland, subsurface manager, Phillips Alaska Inc., "especially where you need to cross bodies of water."

In addition to creating the ice roads, Peak will move drill rigs on and off the ice and clean the ice afterward as well.

Community-minded, Peak is a large supporter of United Way and other charitable organizations. The company also holds membership in industry supported organizations geared for responsible oil and gas development.


A multi-national corporation headquartered in Anchorage, VECO provides management, engineering, procurement, construction, operations and maintenance services to the energy, resource and process industries. VECO ranked 33 in 2001 ENR's Top 500 Design Firms. ENR, or Engineering News-Record, is a technical publication that covers worldwide events in the construction industry.

VECO is also this year's recipient of the State of Alaska's Governor's Exporter of the Year Award. VECO does not export things, according to President Pete Leathard. Instead the company exports people and knowledge within the engineering and construction business.

"This knowledge is world class in nature, related to resources development and cold-weather Arctic engineering, plus performing projects in remote and logistically difficult locations," said Leathard, who credited employees for making the award possible. "VECO provides a value-added service to the export of Alaska's oil, gas and mining resources."

Since its establishment in 1968, VECO has managed a number of major projects. Probably the most recognized by the general public worldwide is the cleanup management of the largest oil spill in U.S. history that occurred in 1989 when the Exxon-Valdez tanker ran aground in Prince William Sound. Over a six-month period, VECO put 12,000 people on the payroll at one time and put $300 million worth of equipment and materials into cleaning up the 11 million gallons of crude oil that spilled and produced an oil slick covering more than 1,000 miles of Alaska's coastline.

In July of this year, VECO-built BP Northstar modules, the largest ever to be constructed in the state, set sail from the Port of Anchorage for the Beaufort Sea. The 13-ton, 60-plus-foottall modules will be an integral part of the five-acre, manmade Northstar Island located six miles off the northern coast of Alaska in 39 feet of water. In November, Northstar will become the most northerly producing oil field in the world.

Through a joint-effort with Fluor, VECO will provide engineering, conceptual design and evaluation for route possibilities from the North Slope to central Alberta, Canada. This recently awarded contract was one is a series of 10 granted by the major Alaska North Slope gas producers-BP, Phillips and ExxonMobil-to assess the feasibility of constructing a pipeline system to deliver natural gas from Alaska's North Slope to Canada and the Lower 48 states. These contract awards combine local expertise, knowledge and personnel of Alaska companies with the resources of other world-class companies. The 10 contract packages cover a broad range of project activities and will involve several hundred contract and subcontract personnel in Alaska and Canada.

"From Alaska's standpoint," Leathard said, "this is very significant."

Despite managing major international projects, VECO still considers Alaska to be the most significant. "We're really ingrained in the community," Leathard said.

Community involvement includes, among other things, providing engineering scholarships through the local university and the purchase of The Voice of the Times. "We want to try to keep the pro-development voice alive in Alaska," said Leathard.
COPYRIGHT 2001 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2001 Gale, Cengage Learning. All rights reserved.

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Publication:Alaska Business Monthly
Article Type:Statistical Data Included
Geographic Code:1USA
Date:Oct 1, 2001
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