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July 2009

Vol. 14, No. 28 Week of July 12, 2009

BP in Alaska: North to Alaska

BP’s trail to Prudhoe Bay: Opened office in 1959, geologists arrived in 1960

Frank Baker

For Petroleum News

Alaska was first mentioned within BP in a 1952 world survey of oil prospects compiled by the company’s exploration department in London. The north of Alaska was included because of oil and gas discoveries made there by the U.S. Geological Survey, which drilled exploratory wells there in the 1920s, during World War II, and in post war years. The primary mission of that drilling was to find strategic fuel reserves for the U.S. Navy. The finds were small, but the 100,000-square-mile plain of frozen tundra sloping down from the Brooks Range to the Arctic Ocean clearly contained several big geological structures of the kind BP was familiar with in the Middle East.

But the North Slope was only one of many prospects around the world. The harsh conditions there, as well as a shortage of dollars, pushed Alaska exploration to the bottom of the 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. Sinclair promised to serve as a major outlet in the United States for BP’s great quantities of Middle East crude oil. Sinclair also had 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.

While BP’s main focus was the North Slope, primarily the foothills north of the Brooks mountain range, southern Alaska was also an area of interest. For several years BP conducted exploration near Yakutat, the Alaska Peninsula, Cook Inlet, and even a well on the lower Yukon River near Nulato —with less than promising results.

At a fairly early stage, BP’s Cox recommended that the company should step up its efforts in northern Alaska. The first part of the operation involved geological surveys.

Roger Herrera, now retired from BP and living in Anchorage, 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. They lived in tents, moving by float plane from site to site and landing in the numerous small lakes that dot the Slope. Sometimes they would travel by helicopter.

“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.”

Seismic surveys

When BP began seismic work on the North Slope in 1963, geophysicists had little or no experience in seismic reflection surveys in permafrost. With Slope 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 BP’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 there 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.

Six wells were drilled reasonably quickly by the Canadian crews 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 in the foothills of the Brooks Range and the Colville River delta would prove to be unproductive — to the tune of $30 million and nine dry holes. Dreams of an Eldorado in this 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.”

How Prudhoe Bay was named

The first mention of the name “Prudhoe Bay” was a brief entry in the journal of British explorer Sir John Franklin, dated August 16, 1826. Franklin saw the bay during an expedition by boat down the Mackenzie River in Canada (the river flows from south to north) and then west along the Arctic coast. The name honors a fellow naval officer and explorer-scientist, Captain Algernon Percy, Baron of Prudhoe.

The word “prudhoe” itself is a Saxon term meaning “proud height,” and a Prudhoe castle was built in the 12th century on a hill overlooking the river Tyne in Northumberland, England.






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