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Oil Exploration In Two Years
Nets Alaska 11 Million Dollars
(Second in a ..series of two j
stories on Alaska oil activities'!, j
(By The Associated Press)
Alaska’s treasury has been en- !
riched by more than 11 million |
dollars in the last two years as
a direct result of oil exploration"
activities.
Until yesterday, the total was
about seven million dollars —
about equal to what it cost one
joint exploration effort to drill
a dry hole on the east side of the
Alaska Peninsula near Kanatak.
The oil boom receipts jumped
another 4V5 million dollars yes
terday as the state received the
payment on its share of the con
tinuing effort to find new petrol
eum reserves within its northern
borders.
The new payment, represent
ing largely oil and gas lease re
ceipts for the first six months of
this year, was for a sum about
double what it cost another com
pany to drill two other dry holes
— virtually within putting dis
tance of the only three producing
wells in Alaska.
The money paid to Alaska rep
resents largely the state’s 90' per
cent share of rentals from leases
on federal lands, but also in
cludes the first small fruits of
actual royalty payments on pro
duction. More than 32Vfc million
acres of Alaska land are under
oil and gas lease.
The revenue totals for the state
and the cost to oil companies for '
dry wells is a comparison that
shows the magnitude of the pet
roleum effort underway in Alas
ka.
The big boom — both in land
leasing and actual field explora
tion activities—can be dated to
mid-1957 when the Richfield Oil
Co. struck oil near the Swanson
River on the Kenai Peninsula.
T. S. Petersen, president of
Standard Oil Co. of California,
said in a speech at Fairbanks, two
i weeks ago:
>> “The risks likely to be en
countered in Alaska oil develop- j
ment are not for the faint
j hearted, or for the speculator*
with a shallow purse.”
' In the Swanson River unit op
erated by Peterson’s company,
five wells have been drilled.
Three are producing about 650
barrels of oil a day — the state’s
only pumping structures.
Two of the holes were dry—
ventures that cost the four-com
pany partnership two million dol
-lars. Two other wells now are
being drilled in the unit.
The biggest dry hole—at a re
ported cost of seven million dol
lars—was abandoned March 1 by
Humble Oil and Refining Co. and
the Shell Oil Co. on the Alaska
Peninsula.
Experts estimate, an average
10,000-foot well in an accessible
area costs lVfe million dollars. In
really remote areas, the cost
doubles.
Peterson bluntly calls Alaska
exploration a gamble of consider
able magnitude.
“It is perhaps revealing,” he
said, “that many of our country’s
biggest and wealthiest oil com
panies have no operations in Al
aska, at all, preferring to save
their hunting money for what
they consider more hospitable
climes.”
And the Standard Oil executive
adds:
“The odds in this gamble, more
over, will grow longer if the in- „
dustry moves into offshore drill
ing on Cook Inlet in the months
to come. Once over water, the
cost of putting down a well can
multiply alarmingly, as we have
already seep in the Gulf of Mex
ico, where the industry is still in
the red.”
Cameron Edmondson, oil re
porter for the Anchorage Daily
Times, says that despite the lack
of public statements it is pre
sumed that at least the 11 com
panies which took part in the
seismic studies will participate in
the Cook Inlet bidding.
TUESDAY BASE3ALL SCORES
American Leagie
Chicago 4, New York 3
Boston 1, Cleveland 0
Baltimore 1, Kansas City 0
Kansas City 6. Washington 2
National League
San Francisco 13, Cincinnati 6
Los Angeles 8, Milwaukee 7
St. Louis 6, Philadelphia 4
F’ine Job Printing At The Nugget.
'
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