BlueCrest keeps pilot light on for shifting gas project

BlueCrestBlueCrest Energy plans to drill for oil in Cook Inlet’s Cosmopolitan oil fields from the shore just north of Anchor Point. But, there is also a chance the company will place a rig in the water to drill for natural gas. Market speculation and debate over the state’s tax credits is making BlueCrest hesitate.

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BlueCrest is accepting the risks of drilling for oil but they won’t move on gas until they have more information. Larry Burgess, the Health and Safety Environmental Manager for BlueCrest says the company is taking a wait and see approach.

“Some of it depends on the tax credit structure. Some of it depends on the market itself and some of it depends on the price of gas. Right now it is not something we’re working on, but it is part of this program that we want to develop,” said Burgess.

BlueCrest can’t influence the market but the company would like the state to leave its oil and gas tax incentives as they are. Burgess says the state already struck a deal with BlueCrest on tax credits for oil production but the credits for gas could still change.

“They don’t have to remain strictly as they’re written but they need to supply the same benefits to us in a tax structure. If that’s what turns out then that is good for us,” said Burgess.

BlueCrest has to decide by spring of 2016whether they will develop the gas reserves or they will lose the Spartan 151, the only drill rig in Alaska available to do the work. The Spartan 151 is owned by Spartan Offshore Drilling.

“And they are waiting on BlueCrest to make a decision. We have not yet made that decision. If we don’t use it the Spartan 151 could leave Cook Inlet and that would leave no options to drill offshore,” said Burgess.

Burgess says Spartan is spending about $20,000 per day to hold the rig in Resurrection Bay near Seward. He claims if BlueCrest leases the 151 they can eventually produce between 60 and 70 million cubic feet of gas per day for up to 30 years.