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This page was last updated 09/16/04

             

                 Early Wood Derrick                                                        Unocal Monopod Platform

Over 100 Years of Oil & Gas Development

A Brief History of Cook Inlet Exploration

Oil and gas exploration has been a part of the history of the Kenai Peninsula Borough for nearly 150 years.  The first historical references can be found in early reports from Russian explorers in the 1850's, who observed oil seeps on the Iniskin Peninsula on the west side of lower Cook Inlet.  In the early 1900's, the first attempt at commercial oil exploration in Cook Inlet took place once again on the Iniskin Peninsula with the drilling of six exploration wells between 1900 and 1906, with out commercial success.  Exploration continued through out the Cook Inlet Basin for the next 50 years with out success until the late 1950's, when commercial oil was finally discovered in Alaska.

                                            

                Swanson River Discovery, 1957                                                                           Alaska Statehood, 1959

The Kenai Peninsula Borough is the birth place of the Alaska oil and gas industry with the discovery of Alaska's first commercially viable oil find in the Swanson River field in 1957.  With that discovery, the Cook Inlet Basin became a focal point for oil and gas exploration that is still ongoing today.  The Swanson River discovery is often credited as one of the key factors in Alaska becoming the 49th State by showing that Alaska could support itself through resource development revenues instead of being a drain on the Federal government.

     

                                               City of Kenai                                                                    Nikiski Oil & Gas Industrial Center

The discovery of oil in the Swanson River field is also considered to be one of the driving factors in the formation and incorporation of the City of Kenai as first class city in 1960 and the Kenai Peninsula Borough as a second class borough in 1964.  Rapid economic and population growth followed during the next four decades to present day.

The Cook Inlet Oil & Gas Industry

Cook Inlet Oil & Gas Infrastructure and Field Map

Map courtesy of the Alaska Department of Natural Resources, Division of Oil & Gas

Timeline for Oil & Gas Activity Within the Kenai Peninsula

The following chart is a timeline of significant events in the history of the Kenai Peninsula Borough's oil & gas industries.  This chart is courtesy of the Kenai Peninsula Borough's 

"2004 Situations and Prospects."
Year Event
1788 Captain Cook voyaged into Cook Inlet
1853 Russian explorers discovered oil seeps on the Iniskin Peninsula - West side of Cook Inlet.
1882 Lone Prospector, Mr. Edelman, drills two holes at Oil Bay on Iniskin Peninsula, then abandons effort.
1889 Group of drillers hits oil in Oil Bay at 700 feet, producing 50 barrels per day, then abandon the well after hitting water at 1,000 feet.
1911 Union Oil of California (later to become Unocal) begins selling petroleum products on the Kenai Peninsula
1917 World War I
1939 World War II - foundational infrastructure in support of war effort
1950-56 Havensrite Oil Co. drills wells at Oil Bay.  Richfield Oil uses horses to haul seismic equipment in Kenai National Moose Range since no motorized vehicles are allowed in the Range.
1957 Swanson River oil field discovery-Richfield Oil Company-predecessor to Atlantic Richfield Company, ARCO
1958 Kenai Peninsula's first natural gas is discovered by Unocal.
1959 Unocal and Marathon Oil Company discover the Kenai natural gas field, the largest natural gas field ever discovered in Cook Inlet
1959 Alaska becomes the 49th State
1959 Alaska holds first state oil & gas lease sale in Cook Inlet Basin, 77,000 acres, $4 million.
1960 First Alaska pipeline built - Swanson River to Nikiski Beach, joint venture Richfield Oil Corp -Standard Oil.
1961

Swanson River oil field begins production

Sterling natural gas field is discovered by Marathon Oil Company

Production from Kenai natural gas field begins.  85-mile natural gas pipeline is built to Anchorage
1962

Beluga River natural gas field discovered on west side of Cook Inlet

Natural gas from Kenai natural gas field begins heating Anchorage homes & businesses
1963 First offshore oil discovery - Pan American Petroleum - Middle Ground Shoal; 
Chevron begins operations of  first Alaskan petroleum refinery in Nikiski.

1964

First Cook Inlet offshore platform is installed by Shell to produce oil from the Middle Ground Shoal field.

North Cook Inlet offshore natural gas field blows out exploration well; escaping natural gas burns for 13 months.
1965

Unocal discovers McArthur River oil field, the largest discovery in Cook Inlet.  Accounts for  48% of Cook Inlet's 1.5 billion barrels produced.

Granite Point and Trading Bay offshore oil & natural gas fields discovered.
1966

Unocal installs world's first monopod offshore platform to produce Cook Inlet's Trading Bay field

Unocal installs Grayling offshore platform to produce the McArthur River oil field.
1967

Beaver Creek natural gas field discovered.

Production begins at Cook Inlet offshore Granite Point oil field.
1968 Construction begins on  Collier Chemical plant to produce ammonia and urea.
1969

Phillips/Marathon LNG plant begins operations and exports first shipment of LNG to Tokyo.

Tesoro-Alaska Refinery begins operations producing diesel, gasoline and jet fuel.

A total of 14 offshore platforms are producing Cook Inlet oil and natural gas

Total Cook Inlet Basin production since 1958 reaches 234 million barrels of oil and 182 billion cubic feet of natural gas.
1970 Oil production peaks at a daily rate of 225,000 barrels.
1975 Tesoro begins production of several grades of gasoline.
1976 Tesoro builds Kenai-Anchorage pipeline for unleaded gasoline, jet fuel and diesel products.
1977

First federal lease sale in Lower Cook Inlet.

Prudhoe Bay's daily output of 1.5 million barrels takes over from Cook Inlet region as Alaska's top producer of oil and natural gas.
1978 Unocal doubles size of its Nikiski ammonia & urea plant, which becomes the largest west coast producer of and supplier of fertilizer.
1979

Unocal and Marathon Oil discovers the Cannery Loop natural gas field.

Pretty Creek natural gas field discovered on west side of Cook Inlet

Total oil production from Cook Inlet Basin since 1958 reaches 897 million barrels of oil and 1,746 billion cubic feet of natural gas.
1981 Second federal Lease sale in Lower Cook Inlet Outer Continental Shelf region.
1982 Third federal lease sale in Lower Cook Inlet Outer Continental Shelf region.  Three Federal sales to date account for 570,000 leased acres and $553 million in bid  revenues.
1985 Marathon Oil installs Steelhead offshore platform, Cook Inlet's 15th offshore platform, to produce McArthur River oil & natural gas
1987 Tanker spills 159,000 gallons of crude in T/V Glacier Bay incident in Nikiski; 
Steelhead Platform explosion causes several million dollars in damage, but no lives lost..
1989

March 24 - Exxon Valdez tanker runs aground in Prince William Sound spilling 232,000 barrels of crude.

Total oil production from Cook Inlet Basin since 1958 reaches 1,123 million barrels; Total natural gas production tops 3,728 billion cubic feet.
1991

Sunfish discovery by ARCO

Chevron Refinery in Nikiski is closed due to marginal profitability and potential liability with state's oil spill laws.
1992 Proposed federal lease sale of 3.7 million acres in Lower Cook Inlet. Blocked by community pressures.
1993

Largest state lease sale - $65 million.

Marathon and Phillips retire the two original LNG tankers in use since 1969 and replace them with two new, larger LNG tankers.
1995 Tesoro began producing more value-added products.
1996

State Lease 85A, 10 bidders, 44 tracts sold of 234, over $3.5 million; 
Lease sale by University of Alaska, property south of Soldotna, bids on 4 of 5 tracts, total $152,198; 
Stewart Petroleum filed for Chapter 11 Bankruptcy.

Total oil production from Cook Inlet Basin since 1958 reaches 1,225 million barrels; Total natural gas production tops 5,160 billion cubic feet.
1997

ForceEnergy buys Marathon Oil Company's offshore oil properties in Cook Inlet offshore.

Fourth federal lease sale in Lower Cook Inlet; 
Through 1997, 39 Cook Inlet lease sales to date; 
Reduced federal lease sale, from 1992 blocked sale, 1 bidder, ForceEnergy, 7,766 acres, $350,000.
1998 February - state lease sale 85A-W, 8 bidders, 24 tracts sold of 157.
1999 ForceEnergy filed for Chapter 11 Bankruptcy; 
Natchiq Inc. ships first truckable modules from its site in Nikiski; 
Marathon begins production from new gas well in Sterling gas field.
2000 Phillips Petroleum purchases Arco Alaska;
British Petroleum prepares for construction of experimental gas-to-liquids plant in Nikiski;
Agrium purchases Unocal fertilizer plant
2001 British Petroleum's gas-to-liquids plant nears completion, prepares to begin operations.
2002 Preliminary work begins on Kenai-Kachemak Pipeline;
ConocoPhillips completes 1st well at Cosmopolitan prospect.
2003
2004

 

All reports and documents presented in this website are available via U.S. Mail upon written request to:

Bill Popp, Oil, Gas & Mining Liaison

Kenai Peninsula Borough, 144 N. Binkley Street, Soldotna, AK 99669

907-714-2157 ~ fax 907-262-8616 ~ brichards@borough.kenai.ak.us 

The preceding  materials are assembled from numerous sources and are provided here in an effort to improve the availability of public information. The Kenai Peninsula Borough has made a significant effort to eliminate problems and errors from these data, but shall make no expressed or implied warranties (including warranties of merchantability and fitness) with respect to the character, function, or capabilities of this data or its appropriateness for any user's purposes. In no event shall the Kenai Peninsula Borough be liable for any incidental, indirect, special, consequential or other damages suffered by the user or any other person or entity whether from use of this data, any failure thereof or otherwise, and in no event will the Kenai Peninsula Borough's liability to the person using this data or anyone else exceed the fee paid for this data.

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