How Big is Alaska’s Latest Oil Discovery?

Without new discoveries, oil industries can dry up. That’s certainly been the case for Alaska, who have seen a fall in production over the years. However, the latest discovery by Caelus Energy could provide a huge boost in oil, jobs and their economy. Read on for all the important information about this new find.

Finders keepers

Caelus Energy LLC is a relatively small company. Founded in 2011, they’re privately held, and focus on exploration and production of oil in southeast Asia and Alaska. For them, this could be huge. But it could also be huge for Alaska, who are pretty reliant on this industry. According to the Alaska Oil and Gas Association, more than a third of jobs in Alaska depend on the oil and gas industry.

Huge find

Their discovery is thought to be in the Smith Bay area, north of Alaska’s mainland. As for how much – Caelus has estimated the find, when combined with other nearby findings, at around ten billion barrels of oil. They expect to recover about 30% of the oil held there, meaning they could be in for a haul of up to three billion barrels. It’s an immense rise of 80% for Alaska’s oil assets.

To put the amount into perspective, the daily oil consumption for the world is around 90 million barrels, with an estimated daily production of 80 million barrels. Caelus have suggested their Smith Bay finding alone could provide 200,000 barrels of oil per day. But how will they get to it?

Access and transport

Luckily, the waters they’ve found it in are relatively shallow. It won’t be quite as challenging as other projects, but it also won’t be wholly straightforward. Firstly, they will be building platforms in the Smith Bay area to extract the oil, but then there is the issue of transporting it. Their plan is to construct an 800-mile pipeline to connect with the main Alaskan pipeline system.

Stopping the fall

With a huge finding like this, Alaska’s oil industry will be able to thrive again. But during the recent oil slump, Alaska has been no different to other industries that are falling, and there are a number of problems facing companies in these slumps. Some companies cut staff and consequently cut the quality and rigor of testing. But this can actually result in more losses, as discussed in ‘Who is Manning the Cash Register?’.