Explorers 2023: Stringing the pearls.

The "string of pearls" is the "billion-dollar fairway" of the eastern North Slope

Eric Lidji

for Petroleum News

Imagine the North Slope developed the other direction.

Here's what actually happened.

The Prudhoe Bay unit came online in 1977 and was followed a few years later by the Kuparuk River unit to the west. Then came the Alpine field at the Colville River unit, and more recently the first producing fields in the National Petroleum Reserve-Alaska.

Those four developments have accommodated work at nearshore prospects to the north like Oooguruk and Nikaitchuq and exploration at emerging onshore fields in the "billion-dollar fairway." The western end of the central North Slope is a tight scrum of producing fields with exploration plays and other growth opportunities to the west, north and south.

But what if it had gone the other way? What if, in the years immediately after Prudhoe Bay came online, oil development had proceeded eastward, rather than to the west?

Say, for example, that the Badami unit came online in 1980, rather than the late 1990s. It would have brought pipeline infrastructure to the edge of the massive Point Thomson unit. And if Point Thomson would have come online in the early 2000s, it would have brought infrastructure to the edge of Area 1002 of the Arctic National Wildlife Refuge.

The new processing facilities for these eastern North Slope fields might have eased development of the Endicott field at the Duck Island unit and the Liberty field, too.

All this infrastructure might have also greatly improved the economics of a different "billion-dollar fairway," one encompassing a sequence of prospects east of Prudhoe Bay.

And who knows, perhaps slender unpaved fork roads would now lead to small fields dotting that vast undeveloped area between the Dalton Highway and the Canning River, accessing all sorts of smaller onshore prospects that no one has yet bothered to name.

Why not?

Development went west because that was the better option. The fits and starts of development on the eastern North Slope emerged from geology, geography and politics.

The Badami unit is much farther east of Prudhoe Bay than the Kuparuk River unit is to the west. It is also much smaller than Kuparuk, and its turbidite reservoir is much more persnickety than the conventional reservoirs at the Kuparuk field (even the viscous ones).

The Point Thomson unit is huge, but it also comes with geologic complications. The extremely high pressures at the field have caused delays and added expense for decades.

And while the reopening of the NPR-A in 1999 created development incentives to the west, the ongoing political refusal to allow development at ANWR over that same time has reduced activities to a single exploration well drilled more than 35 years ago, as well as a recent lease sale that was soon slowed by a change in presidential administrations.

But the thought experiment is still useful. It reveals a truth about the oil industry in general and the North Slope in particular - one that is good for explorers to remember.

While bigness has always been a crucial factor for success on the North Slope, it has never been the only factor. A large enough discovery can certainly alleviate many other complications, such as remoteness, complex geology and extreme engineering needs.

But in point of fact, one of the enduring themes of the North Slope has been the importance of location. All throughout the basin you can find prospects that could be considered perfect candidates for development in all respects except one: location.

Reality

The startup of Badami in the late 1990s followed by the startup of Point Thomson in the 2010s carried pipeline and processing infrastructure across hundreds of miles of the area.

Spare capacity on the 70,000-bpd Point Thomson Export Pipeline and the 35,000-bpd Badami Pipeline soon revived talk of a "string of pearls." That's the eastern North Slope equivalent of the "billion-dollar fairway." State officials began promoting the phrase in the 1990s to describe their hopes of infrastructure-led exploration activities in the region.

Pearls include East Mikkelsen, Greater Bullen, Kuvlum-Lonestar, Red Dog, Slugger (South Thomson), Sourdough, Stinson, Telemark, Yukon Gold, and of course ...

ANWR

Jade Energy is attempting to overcome logistical and economic obstacles to explore the Sourdough prospect, located at the far eastern edge of the Point Thomson unit, on leases known as Area F (see article). 88 Energy recently acquired the nearby Yukon Gold No. 1 well and associated exploration acreage and is searching for partners (see article).

For a while, a third opportunity joined those.

Caelus Natural Resources Alaska LLC acquired 350,000 onshore acres between Prudhoe Bay and Point Thomson in 2015. The company acquired 175 square miles of new 3D seismic and reprocessed another 275 square miles of existing 3D seismic in the area.

"Adjacent infrastructure with available capacity reduces threshold volumes required for developing discoveries in the sub-100 MMBO recoverable range," Caelus said. "Multiple play types within proven stratigraphic horizons provide significant upside potential in previously poorly-imaged structural trends and/or subtle stratigraphic traps."

Eni acquired the leases when Caelus left Alaska in 2019 and initially expressed some enthusiasm for its exploration potential. But by mid-2021, Eni had dropped the acreage, telling Petroleum News at that time, "Eni completed its exploration studies on the area the leases covered and the prospectivity of the area didn't meet Eni's economic metrics."

Although progress has been few and halting on the eastern North Slope, the string of pearls remains a major growth area for the basin, if circumstances accommodate.

Newest eastern play

The company plans to drill its first exploration wells in its new Lagniappe block either this coming winter or the following winter. "Our Lagniappe block is really exciting. The eastern play is also an extension of our Pikka play and, like moving west into the NPR-A, it is one of the most underexplored areas on the North Slope," Bill Armstrong told PN (see story).

The company holds some 340,000 acres southeast of Prudhoe Bay, but the Lagniappe play covers only about 1,750 square miles of the lease block. There has been very little previous exploration drilling on the acreage and none targeting the Nanushuk. Armstrong recently reprocessed 850 square miles of 3D seismic in the area to help identify targets.

Editor's note: this article first appeared in the 2022 edition of The Explorers.