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Production up
FY2021 North Slope volumes up some 10,000 bpd; Feige addresses access
Kristen Nelson Petroleum News
Alaska North Slope production was up by 2% from fiscal year 2020 to FY2021, a 5% increase over the forecast for FY21, Maduabuchi Pascal Umekwe, Ph.D., reservoir engineer with the Alaska Division of Oil and Gas, told the Senate Finance Committee Jan. 19, as the Department of Natural Resources presented its latest production forecast numbers to legislative committees.
Actual FY21 ANS production averaged 493,820 barrels per day, Umekwe said, up some 10,000 bpd compared to the forecast.
He said the increase represented progress in how companies manage fields - growing production, stemming decline and adding volumes. Umekwe said it was a significant accomplishment, as production decline is the natural behavior of the state’s mature fields.
Actual FY21 production was above that projected in the fall Revenue Sources Book for FY22, 486,730 bpd from the North Slope, followed by a 3% increase to 500,189 bpd in FY23.
Fields with increases, decreases Discussing FY21 results by unit, Umekwe said production was up 5% at Greater Prudhoe Bay, growth attributable to well and facility optimization efforts. He said one of the ways Hilcorp, which took over as Prudhoe operator midyear 2020, has improved production is to ensure facilities are working at capacity. This affects processes such as water and gas handling, and he said “one of the miracles” of what Hilcorp has achieved is that by ensuring facilities work at capacity, the company has been able bring on some wells that couldn’t be produced in the past because of the amount of water and gas those wells produced.
Milne Point production was up 20% over the period, Umekwe said, due to consistent drilling efforts by operator Hilcorp.
And at Point Thomson, operator ExxonMobil (handing over to Hilcorp beginning this January) has walked through a lot of fascinating challenges over the past six years, he said, including creating first-in-class equipment, such as compressors, and working through the issues with that equipment, with a result that wells at the field are now consistently online.
Fields seeing decreases include Kuparuk River, where operator ConocoPhillips Alaska essentially held production flat at FY20 levels, a small decrease given the size of the asset, Umekwe said.
At Greater Mooses Tooth 1 in the National Petroleum Reserve-Alaska, also a ConocoPhillips field, production has dropped by 50%, and reservoir challenges persist.
Decline at Eni’s Oooguruk is due to the absence of drilling since 2016.
Update on key future projects Umekwe provided an update on key future projects, three at ConocoPhillips Alaska’s Colville River unit:
*Six wells are planned at Fiord West Kuparuk, with Doyon 26, a new rig constructed to do the extended reach drilling needed for this project, currently drilling and production estimated to reach some 20,000 bpd.
*CD5 is in its second expansion, which is ongoing, with three injectors drilled so far, and additional production estimated to reach more than 10,000 bpd.
*First oil was produced at Narwhal in December, with more drilling expected from CD4 and a new pad, CD8, projected to have from 20 to 40 wells and production estimates peaking at 32,000 bpd.
*GMT2 in NPR-A, another ConocoPhillips project, had first oil in November, with four wells drilled and production estimated to peak at some 30,000 bpd.
*Pikka, an Oil Search project, is planned for two-stage development, with phase 1 projected to start in 2025 with a peak rate of 80,000 bpd.
*Willow, a ConocoPhillips project in NPR-A, is on hold pending litigation requiring a new Bureau of Land Management record of decision, with construction expected to start in the first quarter of 2023, first oil in 2025-26, and a peak rate of 130,000 bpd.
Access questions The committee had questions about access issues on the Slope.
DNR Commissioner Corri Feige said Oil Search has opted to construct its own seawater treatment plant, and cited issues with the chemistry of water from the existing seawater treatment plant. The new and existing treatment plants will be side by side, she said, adding that for Willow ConocoPhillips will have to expand the Oliktok Point seawater treatment plant.
Feige said Oil Search always intended to construct its own processing facilities, with capacity beginning at 80,000 bpd and stepping up to 160,000 bpd.
Where there is “overlapping need and use” is with access roads, she said.
The companies are negotiating a commercial agreement for long-term access, Feige said, adding that these are state resources being developed on state land. The state is prepared to step in, she said, as the issue is important to the state, which is monitoring very closely and engaging with both parties. Feige said the state would engage if the parties are not successful in reaching agreement.
This is the first time a party developing a new field is not a working interest owner in the unit or leases they need to cross, she said. In the past, with both parties having a working interest they’ve been able to arrive at a commercial arrangement.
Here, she said, the state is going back and taking a very close look at lease language because there is no exclusivity in access across state leases. It is clearly spelled out that other parties will be able to cross, and Feige said the state is looking at both lease language and unit agreement language.
Through statutes and regulations, she said, there is a path for the state to engage.
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