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This month in history: NPR-A planning moves ahead
20 years ago this month: Conoco signs MOU with BLM for environmental impact statement for Alpine satellite pads, including NPR-A
Kristen Nelson Petroleum News
Editor’s note: This story ran in the Feb. 2, 2003, issue of Petroleum News Alaska.
Development plans are underway for two discoveries in the National Petroleum Reserve-Alaska. ConocoPhillips Alaska Inc. President Kevin Meyers reviewed the company's 2003 plans at the Anchorage Chamber of Commerce Jan. 27, including exploration, development and pre-development planning work.
The biggest development project Meyers announced has been eagerly awaited since Phillips Alaska Inc. and partner Anadarko Petroleum Corp. announced discoveries in NPR-A in May of 2001: Meyers said ConocoPhillips has signed a memorandum of understanding with the Bureau of Land Management for an environmental impact statement for western satellite development.
Two of those satellite drilling pads, Fiord and Nanuq, are at discoveries north and south of Alpine where the company has already done planning work for satellite drilling pads. But two of the satellite drilling pads, Spark and Lookout, were among the NPR-A discoveries (five wells and a sidetrack) announced in 2001: Spark 1 and Spark 1A, Moose's Tooth C, Lookout 1, Rendezvous A and Rendezvous 2.
MOU for western satellites Meyers said the memorandum of understanding - not yet available as Petroleum News Alaska went to press with this issue - was signed the week of Jan. 20 and covers five satellites: Fiord, Nanuq, West Alpine, Spark and Lookout (see map). The MOU, he said, is “for an environmental impact statement to evaluate … the regulatory terms and conditions under which we may permit these satellites and bring them forward to development.”
The company hopes to see a decision on the EIS in 2004, Meyers said, and “then we can make a decision whether or not the economics and the permit stipulations are such that we can actually go forward and sanction development there.”
Alpine expansion The satellites would be developed through the Alpine facilities, Meyers said.
“And the reason we’re looking at them as satellites to the Alpine field is fundamentally that the Alpine facilities are within about 20 miles, the logical thing is to go to those facilities and debottleneck them and use those facilities as opposed to putting in a standalone development.”
The company has looked at Alpine expansion before, Meyers said. In fact, “at one time we thought we'd go mega expansion at Alpine that would get us up toward 140,000-150,000 barrels a day.” But when the cost of that expansion was evaluated, it wasn't economic, “could not be justified on a standalone basis, just on Alpine alone.”
With some of the new satellites the company might be able to reach those production levels, “but right now it just didn't make sense,” Meyers said.
Instead the company is using a phased approach to Alpine expansion and the first phase, about $60 million gross, “will expand both our water and gas handling capacity” and “increase our oil production by about 5,000 barrels a day.” That expansion, ACX-1, should start up in the 2004 timeframe, “so we'll be doing a lot of work on that this coming year and maybe the following year.”
Further expansions are possible, he said. “Our plan is to expand the facilities as it makes good economic sense as we bring on these other western North Slope satellites.”
$640 million new capital ConocoPhillips will be putting $640 million of new capital into Alaska projects this year, and that includes - in addition to the EIS for western satellite development - development drilling, planning for a West Sak-dedicated drilling pad at Kuparuk and exploration drilling.
Planned 2003 development drilling includes: 60-70 penetrations at Prudhoe Bay (five rigs); 15-20 wells at Alpine (one rig); 10-15 wells at Kuparuk (two rigs) and four wells at West Sak (two rigs).
In addition, Meyers said, the company will recomplete three Tyonek Deep wells as gas producers from the Tyonek platform in Cook Inlet, bringing in Kuukpik Rig No. 6 for that work.
At West Sak, which lies beneath existing Kuparuk facilities, ConocoPhillips has been developing the viscous oil from two Kuparuk drill sties, 1C and 1D. With new technology, multilateral horizontal producers and horizontal undulating injectors, the company has started to approach economic returns, Meyers said, with one of the new wells producing at 1,500 barrels a day - compared to original vertical wells producing a couple of hundred barrels a day, and 50 wells producing 8,000 barrels a day total.
“Half of that production comes from six multilateral producers,” Meyers said.
And with those kinds of results the company hopes this year to sanction its “first standalone West Sak drill site, the 1J drill site, in the sweet spot of the field” and “in the interim we'll be drilling several additional horizontal wells, both injectors and producers, to keep proving up the technology.”
Exploration plans ConocoPhillips is planning four to six Alaska exploration wells this winter, Meyers said. That includes McCovey in the Beaufort Sea just north of Prudhoe Bay with partners EnCana and ChevronTexaco. The company will also sidetrack the Hansen well it drilled last year at the Cosmopolitan prospect on the Kenai Peninsula north of Anchor Point. Meyers said that drilling will be done in the first or second quarter of the year. ConocoPhillips spokeswoman Dawn Patience told PNA that there was no spud date yet, but that the well would be drilled with Nabors Alaska Drilling rig 273.
Onshore on the North Slope, Meyers said the company would drill the Oberon prospect between Kuparuk and Alpine and the Puviaq prospect in western NPR-A.
The company has averaged nine to 10 exploration wells a year in recent years, Meyers said, but this year's work involves some remote locations.
“And as you get into remote locations, that tends to translate into more cost. So when you look at what we're doing in terms of the dollar basis, this is a pretty average program for us in the last few years.”
These are “moderately expensive wells,” he said.
“And of course I think I'm not giving away the farm when I say the more expensive the well, the bigger potential must be out there in order to justify drilling it.”
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