A little-known energy exploration company has made a major oil discovery in remote Alaska.
Caelus Energy LLC, a closely held firm backed by private equity fund Apollo Global Management LLC, said it made the oil find in the shallow waters of Smith Bay, about 300 miles north of the Arctic Circle, the Wall Street Journal reports.
The company says it expects to extract between 1.8 billion and 2.4 billion barrels from the discovery, probably using barges built along the Gulf Coast, then towed to Alaska and permanently sunk in the bay to create man-made drilling islands.
If those initial estimates are correct, the discovery would be substantial — larger than Exxon Mobil Corp.’s 2015 discovery off the coast of Guyana in South America.
“It is not going to be easy but we’ve had projects like this around the world,” said Caelus Energy chief executive James Musselman.
He previously led Kosmos Energy Ltd. and the former Triton Energy, exploration firms that made giant finds off the west African coast.
Caelus plans to build an US$800 million, 125-mile pipeline that will carry the oil underneath state-owned waters to connect with existing pipelines.
That idea likely will generate strong support from a state grappling with plummeting oil revenue.
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