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BP heads north to Alaska
London-based company intrigued by US Navy discoveries in petroleum reserve; opens office in 1959, geologists arrive in 1960 Kay Cashman Petroleum News
Alaska was first mentioned within British Petroleum, or BP, in a 1952 world survey of oil prospects compiled by the company’s exploration department in London. Northern Alaska, specifically the Naval Petroleum Reserve Number 4 , or PET-4, (today called National Petroleum Reserve-Alaska, or NPR-A) was included because of discoveries made there by the U.S. Navy, which drilled exploratory wells in 1944 to 1952, finding eight oil and gas fields (Fish Creek, Gubik, Meade, Simpson Peninsula, South Barrow, Square Lake, Umiat and Wolf Creek).
The primary mission of that drilling was to find strategic fuel reserves for the Navy. The discoveries were small, but the plain of frozen tundra sloping down from the Brooks Range to the Colville River delta and Arctic Ocean clearly contained several big geological structures of the kind BP was familiar with in the Middle East.
The North Slope, however, was only one of many prospects around the world. The harsh conditions, as well as a shortage of dollars, pushed Alaska exploration to the bottom of BP’s list.
In the middle of 1957, however, a small company named Richfield Oil struck oil at Swanson River on the Kenai Peninsula south of Anchorage, sparking an exploration boom. While most oil companies focused on this area, BP’s interest in the North Slope grew after its chief geologist, Peter Cox, reconnoitered the area and reported: “There is a similarity between the foothills of the Brooks Range and the Zagros mountains in Iran. The North Slope contains a wealth of drillable anticlines on the Iranian scale, with lengths in the order of 20 miles.”
In 1958, BP teamed up with Sinclair, an established U.S. oil marketer and refiner with some experience in Alaska.
The first step for BP and Sinclair was to conduct geological surveys on the North Slope.
In 1959 BP opened its first office in Alaska, in downtown Anchorage, and the following year the first team of geologists arrived.
The first part of BP’s North Slope operation involved geological surveys.
Roger Herrera was a member of the first team.
“There were very few maps available in 1960 for those parts of Alaska,” said Herrera. “Those that were available were of poor quality, so we relied heavily on aerial photographs.”
Herrera said that their assignment was to define the geologic structures more exactly, and to identify more promising reservoir rocks and develop a picture of the regional geologic trends.
Living in tents, the survey team moved by helicopter or float plane from site to site, often landing in the numerous small lakes that dotted the North Slope.
“We’d go out in the morning to get rock samples, and since we had many miles to go, we only carried essentials - a map, compass, rock hammer, good hiking boots, plenty of mosquito repellent and, in the event of bad weather, patience,” Herrera remembered.
“I recall many nights spent out on the tundra because the weather was too poor for pilots to fly. Sometimes when the airplanes couldn’t make it in, we ate fish that we caught in nearby streams and lakes.”
Geoff Larmanie, exploration manager then based in Anchorage, also ventured into the field with survey crews. “It could get pretty rough, especially in the mountains,” he recalled.
“There we’d sit, our heads in the sky, our backsides in the snow for days on end. Living cheek by jowl with people under these cramped conditions could result in certain psychological tribulations, when we might all run out of both work and reading matter.”
When BP began seismic work on the North Slope in 1963, geophysicists had little or no experience in seismic reflection surveys in permafrost. With permafrost thickness at some 2,000 feet, it was feared the readings would be severely distorted. New methods of interpreting seismic logs would prove beneficial in the company’s early exploration efforts.
BP management in London accepted the team’s recommendations to proceed with exploration drilling. By the end of 1963, BP and Sinclair had acquired options to lease about 150,000 acres.
Since the North Slope was isolated from the rest of the world, transporting drilling equipment was a major logistical effort. BP’s first drilling rig was brought by rail from Calgary, Alberta (Canada) to the Hay River in the Northwest Territories. It was barged down the Hay River into the Mackenzie River to the Beaufort Sea Coast, west to the Colville River, and finally upriver.
The wells were drilled under difficult and unfamiliar conditions - through about 2,000 feet of permafrost, with temperatures so low that steel equipment fractured and normal lubricants solidified.
BP’s efforts proved unproductive - to the tune of $30 million and nine dry holes, an enormous sum at that time.
Dreams of an Eldorado in the northern frontier quickly faded.
“It’s remarkable how little notice people take of you when you’re drilling dry holes,” said Mike Savage, a senior BP executive, at a 1987 ceremony in Anchorage to commemorate the 10th year of Prudhoe Bay oil production. “The odds of success in an entirely new exploration area were at least 20 to 1 against.”
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