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Pool Arctic Alaska: drilling for dollars.

In the intensely competitive oilfield service industry, this Anchorage company thrives by providing equipment, ideas and technology.

As one of the most diversified and experienced drilling companies in the state, Pool Arctic Alaska can look forward to a relatively secure future in the oil patch, an unpredictable and unforgiving business arena that's produced more than its share of casualties in recent years.

With its feet and rigs firmly planted in Cook Inlet and on the North Slope, Alaska's major petroleum domains, Pool Arctic is forecasting record employment and a modest gain in operating revenues this year.

"We're seeing the best of all worlds right now," notes general manager Dale Larsen. "But you still have to find oil and gas."

Pool Arctic owns and operates three specialized drilling rigs and a well workover rig, all located on the North Slope. The company also provides crews to oil and gas operators in Cook Inlet, and has access to three offshore platform rigs and other equipment for operations in the inlet.

Along with two other contractors (Nabors and Doyon) that form BP Exploration (Alaska) Inc.'s new partnerships or "alliances" for development drilling at the Prudhoe Bay field, Pool Arctic's big mission on the North Slope is to help BP reduce well costs at Prudhoe by 30 percent over the next few years if all goes well.

"Alaskan resources of Pool Arctic Alaska and Doyon Drilling brought together a well-balanced team of experienced personnel and a variety of North Slope rigs," says Sam Lynch, manager of Shared Services Drilling for BP and Arco.

Saving Costs

It was increasing costs and declining production at Prudhoe Bay that led to major contractor and employment cutbacks at BP last year. Larsen says a 30 percent reduction in the cost of drilling a well at Prudhoe should enable BP to develop an additional 3 billion to 4 billion barrels of oil reserves.

"We're trying to figure a way to save them costs," says Larsen. "We have equipment, ideas and technology they can use for their operations. Our people can help them out and their people can help us out."

Pool Arctic also is under contract for at least three other projects this year on the North Slope, including development work at the Point McIntyre and Niakuk fields and exploratory drilling at BP's Yukon Gold prospect on the western fringe of the Arctic National Wildlife Refuge (ANWR) coastal plain.

In Cook Inlet, Pool Arctic holds labor contracts for drilling operations on 13 of the 15 offshore platforms, and is in the thick of largest-ever inlet oil discovery, the estimated 750-million-barrel Arco Alaska/Phillips Petroleum Sunfish prospect located 30 miles southwest of Anchorage. Pool Arctic was tapped to drill two of a half-dozen test wells that should tell field operator Arco the actual size of the reservoir, a necessary step before development can begin.

While Arco hopes to have a firm development plan for Sunfish by next spring, the company has said a 750-million-barrel field would require five offshore platforms and 150 wells to produce roughly 100,000 barrels of oil per day. Pool Arctic is hoping to get a piece of the drilling pie.

"The future looks very bright," says Larsen. "We haven't stubbed our toes yet, and the operation is going along very well."

Pool Arctic employment is expected to peak at about 400 this winter, some 100 more workers than in any previous year. The company's origins date back to its beginning as Arctic Alaska Drilling Co. in 1977, the same year crude oil began flowing from the supergiant Prudhoe Bay field.

Mystery Wells

Pool Arctic Alaska was formed in 1983 as a partnership between Arctic Alaska Drilling, a subsidiary of Alaska International Industries, and Pool Alaska, a subsidiary of Pool Co., one of the largest well-servicing companies in the world. Pool Arctic is 60.7 percent Alaskan owned.

Over the years, Pool Arctic has made its mark on Alaska's exploration front, drilling initial wells that led the Point McIntyre and Badami oil discoveries on the North Slope.

Pool Arctic also drilled KIC No. 1, the only exploratory well ever drilled on the 1.5-million acre ANWR coastal plain. KIC was once voted the most mysterious well in the United States, primarily because of its confidential nature and because it's located in a region believed to hold the last remaining oil bonanza in North America. ANWR is now closed to exploration and development.

In the early years, Pool Arctic was exclusively an exploration company but later diversified its operations to bring more stability to the company. In the mid-1980s, low oil prices nearly devastated exploration contractors in Alaska.

"Out of necessity we looked into the future and tried to figure out how not to be so dependent on just one marketplace," says Larry Ross, Pool Arctic's operations manager. "We were one of the first to take our equipment and try to match the market." The plan worked.

Close Eye on Competition

Pool Arctic also is keeping a close watch on oil and gas developments in the former Soviet Union, considered by many analysts to be a logical industry step-out because of similar climatic conditions and its close proximity to Alaska. "As yet, we don't have a drilling rig there...but we have done a lot of on-sight studies and assessments," says Ross.

In addition to exploratory and oil field development drilling and its labor contracts, Pool Arctic also owns and operates a ball mill at the Kuparuk River field for grinding muds and cuttings from drilling operations.

"I think one of the main advantages of Pool Arctic that's been beneficial to the company over the years is diversification," explains Larsen. "We're a major player in Cook Inlet, which is booming right now. And with Prudhoe Bay and being selected as one of the alliance partners, it seems like a windfall all around for us."
COPYRIGHT 1993 Alaska Business Publishing Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:The new 49ers
Author:Tyson, Ray
Publication:Alaska Business Monthly
Date:Oct 1, 1993
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