A Chevron subsidiary currently owns a small share of the pipeline that connects the Kuparuk oil field, pictured here, to the trans-Alaska pipeline. Chevron is proposing to sell its stake to a new Texas oil and gas company, Pontem Alaska Midstream.
Attorneys working with the companies also asked Republican Gov. Mike Dunleavy’s administration earlier this year to transfer Chevron’s minority interests in three major North Slope oil fields to Pontem — including Chevron’s stake in the massive Prudhoe Bay deposit. “What we see here with this new company taking over this 5% interest is, it’s so new it does not even have audited financials,” Scott added. “And the problem, of course, is that there are very substantial potential liabilities that come with operating in the oil and gas business.”
“The transfer of this small ownership interest will not have any effect on the Kuparuk Pipeline’s rates, terms, or services, on day-to-day operations or to the managing partner or the personnel,” Pontem and Chevron said in their filing. In Chevron’s case, it owns the Duck Island unit in a partnership with Hilcorp, the Prudhoe Bay field in a partnership with ExxonMobil, Hilcorp and ConocoPhillips and the Kuparuk field in a partnership with ConocoPhillips and ExxonMobil.
Those firms had the balance sheets needed to pay the huge costs of finding and drilling for oil in the area, with its harsh winter climate and long distance from shipping and logistics hubs.But oil production from the North Slope peaked in the 1980s, at 2 million barrels a day, and since then, it’s been on a long decline.