BlueCrest sells first oil

BlueCrest sells first oil

BlueCrest Energy sold its first barrel of oil from its new Cosmopolitan development last week to the Tesoro refinery in Nikiski.

Carlile Transportation Systems, a trucking and logistics company that provides oilfield support, transported the first oil produced by the facility on Thursday to Tesoro’s refinery.

The company expects to drive two tankers a day from the Cosmopolitan site near Anchor Point to the refinery each day, according to a press release from Carlile.

Tesoro Kenai Refinery Vice President Cameron Hunt said in the press release that Tesoro was encouraged by the sale.

“The continued exploration and development of both oil and natural gas in the Cook Inlet basin is important for the long-term viability of our local refinery as well as the economic well-being of the Kenai Peninsula,” Hunt said in the press release.

The facility is only producing from one well at the moment, an exploratory well drilled by ConocoPhillips and Pioneer, said BlueCrest President and CEO J. Benjamin Johnson in an email. The company is gradually bringing all the components of the production facility online, he said.

The oil production will likely gradually increase as the new wells the company plans to drill come online, he said.

“We will have our large new onshore drilling rig in place and begin drilling new wells in July,” Johnson said. “Those new wells (each of which will take 3–5 months to drill) will likely not begin to produce until close to the end of 2016 or early 2017.

Carlile Vice President of Oil and Gas Tom Hendrix said in the press release that BlueCrest’s initial success could be jeopardized if Cook Inlet tax credits undergo changes that may limit development by smaller companies. The Legislature is debating a number of bills that would change the oil and gas tax credit structure, ranging from placing caps to minor tweaks over time to completely cutting the Cook Inlet oil and gas tax credits by 2018. No decision has been made yet.

“Alaska’s economic strength and growth is directly tied to a strong, vital natural resource industry, which provides jobs for a diverse workforce and a range of important business development opportunities throughout the state for companies such as Carlile,” Hendrix said in the press release.

Tesoro’s Nikiski refinery is in the midst of its spring turnaround, a process done about once every four years. Most of the equipment at the refinery will be inspected and replaced, fixed or updated. Between 800 and 850 people are involved with the turnaround, but many of them are refinery employees or other locals, Hunt said in an interview.

“We do use a lot of local contractors,” Hunt said.

The refinery is still able to handle the oil that BlueCrest is producing during the turnaround, Hunt said. He said he could not say how long the turnaround process will take, though the company does know a definitive length for the process.

During a joint Kenai and Soldotna chambers of commerce luncheon in Feburary, Hunt said the process could take between six and 10 weeks to complete.


Reach Elizabeth Earl at

More in News

Golden-yellow birch trees and spruce frame a view of Aurora Lagoon and Portlock Glacier from a trail in the Cottonwood-Eastland Unit of Kachemak Bay State Park off East End Road on Sunday, Oct. 3, 2021, near Homer, Alaska. (Photo by Michael Armstrong)
State parks advisory boards accepting applictions

Alaska State Park advisory boards provide state park managers with recommendations on management issues

A recently added port-a-potty is available in the parking lot of Slikok Multi-Use Trails on Thursday, Feb. 2, 2023, in Soldotna, Alaska. (Jake Dye/Peninsula Clarion)
Slikok makes sanitation upgrades

A port-a-potty was installed to due to the increased popularity of the trails

Sen. Dan Sullivan speaks at the Kenai Classic Roundtable at Kenai Peninsula College on Wednesday, Aug. 17, 2022, near Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Local students nominated to compete for appointments in military academies

Students interested in pursuing appointment to the military service academies can apply for nomination through their state’s congressional delegation

Kenai resident Barbara Kennedy testifies in support of allowing more city residents to own chickens during a city council meeting on Wednesday, Feb.1, 2023, in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Kenai council bumps back vote on chicken ordinance

The ordinance would allow Kenai residents to keep up to 12 chicken hens on certain lots

Sens. Löki Tobin, D-Anchorage, right, who chairs the Senate Education Committee, and Bert Stedman, R-Sitka, co-chair of the Senate Finance Committee, discuss a bill proposing a nearly 17% increase in per-student education funding Wednesday at the Alaska State Capitol. (Mark Sabbatini /Juneau Empire)
State Senate bill would bump per-student funding amount by $1,000

If approved, the legislation would bump state education funding by more than $257 million

Recognizable components make up this metal face seen in a sculpture by Jacob Nabholz Tuesday, Jan. 31, 2023, at the Kenai Art Center, in Kenai, Alaska, as part of Metalwork & Play. (Jake Dye/Peninsula Clarion)
Metalwork gets time to shine

Metal is on showcase this month at the Kenai Art Center

This 2019 aerial photo provided by ConocoPhillips shows an exploratory drilling camp at the proposed site of the Willow oil project on Alaska’s North Slope. The Biden administration issued a long-awaited study on Wednesday, Feb. 1, 2023, that recommends allowing three oil drilling sites in the region of far northern Alaska. The move, while not final, has angered environmentalists who see it as a betrayal of President Joe Biden’s pledges to reduce carbon emissions and promote green energy. (ConocoPhillips via AP)
Biden administration recommends major Alaska oil project

The move — while not final — drew immediate anger from environmentalists

Homer Electric Association General Manager Brad Janorschke testifies before the Senate Resources Committee on Wednesday, Feb. 1, 2023, in Juneau, Alaska. (Screenshot via Gavel Alaska)
Senate group briefed on future of Cook Inlet gas

Demand for Cook Inlet gas could outpace supply as soon as 2027

Most Read