The presidents of British Petroleum Co Plc unit BP Exploration (Alaska) Inc and Atlantic Richfield Co unit Arco Alaska Inc said their companies were optimistic about North Slope opportunities, despite recent drops in oil prices. Richard Campbell, president of BP Exploration (Alaska), said his company spent $700 million on Alaska capital projects last year and will spend more than that in 1998 and sustain such levels in the future.

Investments in new fields like Northstar, Badami and Liberty will help will boost the company's net oil production by 100,000 barrels a day and keep it at more than 500,000 barrels a day in the future, Campbell said at a forum hosted by the Anchorage Chamber of Commerce.

"That's a pretty good future, and it comes as the result of a lot of hard work," he said.BP got other good news on last Friday when the Alaska Supreme Court affirmed that governor Tony Knowles and the state legislature had acted properly when they altered the company's Northstar lease terms to encourage production at the 130 million-barrel offshore field.

The citizen lawsuit, which challenged the deal that exchanged a profit-sharing requirement for sliding scale royalties on the leases, had stalled Northstar production by about a year, Campbell said.

Now, "We're looking at start-up of production in the back end of 2000 or the beginning of 2001," he said. Kevin Meyers, president of Arco Alaska, said his company has also boosted investments, and is on its way to halting the production declines caused by the maturation of the super giant Prudhoe Bay field. "We're holding our operating costs flat, and we're quietly replacing every barrel we're losing," Meyers said at the forum.

By 2001, Arco expects to increase its net North Slope production by 30,000 barrels a day from the current levels,Meyers said. If the company's planned acquisition of Union Texas Petroleum goes through, that number will be boosted by an additional 15,000 barrels a day, he said.

The US department of Interior is considering selling oil leases in the eastern end of the National Petroleum Reserve Alaska, a 23 million acre federal preserve on the West side of the Colville River, and well West of the Prudhoe Bay complex. A decision is expected this summer.

The Clinton administration has resisted calls to allow oil drilling in the Arctic National Wildlife Refuge, east of Prudhoe Bay. However, the US Geological Survey on Sunday released a study that estimated that in-place oil in the refuge totals 20.7 billion barrels, up from a 1987 estimate of 13.8 billion barrels. Alaska state officials, who have long campaigned in favour of oil development in the refuge, said they doubt that the new estimate would change the president's position on the issue.