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Role of Prudhoe as applied technology lab Innovations to develop North Slope ranged from drilling rigs, to gravel pads, to how seismic shot through permafrost is interpreted TIM BRADNER For Petroleum News
Prudhoe Bay turns 40 this year. Like any milestone birthday, it’s a time of reflection.
Something lost on the public - and not well understood even within industry - is how the giant field, still the anchor of North Slope oil production after four decades, has become a kind of applied technology laboratory.
The most dramatic examples - things done first at Prudhoe at full commercial scale and now used elsewhere, like horizontal wells - are in drilling. But there are plenty of other examples, including in enhanced oil recovery and Arctic construction technology.
Horizontal drilling was actually done first by Elf Aquitaine in Europe but was of limited success. BP developed it more fully at Prudhoe Bay and made it work, and it led to widespread use of “sidetrack” wells, or wells drilled laterally off the bores of older wells, which then led to substantial amounts of new oil produced on the North Slope.
Horizontal drilling also became a key factor in the shale oil and gas revolution in the Lower 48, which has now turned the world energy markets upside down. It was done at a commercial scale first at Prudhoe Bay. The same is true with coiled-tubing drilling, another key technology done first at Prudhoe.
Early drilling of multi-lateral wells, where several underground well-bores are drilled off a single well to surface, was done first in Texas on a limited scale, and in ideal reservoir rock, but at Prudhoe Bay the technique has been done at scale.
The same thing is true for hydraulic fracturing in highly permeable reservoir rock, like Prudhoe, another first. People said it wouldn’t work. Prudhoe drillers proved them wrong.
Arctic technology It’s a similar story with Arctic technology. When oil and gas companies first came to the North Slope in the late 1960s they didn’t know much about working in the Arctic. Prudhoe was the first North American oil field to be developed in the far north. There was a tough, step-by-step learning curve.
Out of the learning came refinement of technologies that could be exported, like horizontal drilling. The key was that Prudhoe Bay was so big that the stakes and monetary returns were high enough to support risks taken to try new ideas. Company managements were willing to take the chance that something wouldn’t work. Some decisions were strongly debated, particularly horizontal drilling.
In the beginning, however, the industry’s first priority was to learn how to operate in the Arctic to protect people and equipment working in difficult conditions.
1960s on the Slope Ted Stagg, a retired BP drilling engineer, experienced this at first hand. Stagg was on the Prudhoe Bay discovery well in 1968, then working for Schlumberger, the oil service company, and he remembers the conditions.
“We flew to the slope on old C-46s with no heat in the cabin. We sat in seats alongside the fuselage,” typical for a workhorse World War II-vintage plane that probably supported paratroop drops in its early years.
The rigs used were brought from the Lower 48 and not suited to the Arctic. “At first the rig floors were not sheltered. Drill crews were exposed There was a windscreen, probably canvas, that came up about six feet,” Stagg said. It wasn’t enough to keep the weather at bay.
Dick Maskell, another retired BP drilling engineer, said one of the most difficult jobs was being the “derrick man” who worked high up on the derrick manhandling drill pipe into place. “It was a crappy job. There was no heat,” and exposure to brutal conditions, he remembers.
Keeping the rig floor thawed required hot steam and constant attention, and rigs had to have two boilers running, with one on standby. One of the first changes, Stagg recalls, was development of a pipe shed on the rig to get people out of the wind and snow when they handled drill pipe. “That was a big innovation,” he said.
Greg Sarber, who still works with BP directing wellsite operations, remembers the days before pipe sheds. “We would be out there in blizzard conditions taking the thread protectors off drill pipe. All that is now done inside, where it’s heated and safe,” he said.
Early rigs While the early rigs, including several operated by Rowan Drilling, were not Arctic-adapted they were well suited for the companies’ immediate needs for exploration and delineation drilling.
“They were light rigs that could be broken down into truck-sized pieces or even moved with a big helicopter, but they became cumbersome once we started drilling production wells on pads,” said Harold Heinze, former ARCO Alaska president who came to Alaska as an ARCO engineer in 1970.
Following the discovery, planning for Prudhoe Bay development started and drilling needs changed. Brinkerhoff Drilling’s Rig 36 was rebuilt for Arctic conditions, Maskell recalled, but Nabors Drilling’s Rig 18-E, built in the mid-1970s, was the first rig truly designed for Arctic conditions.
It was fully enclosed, so crews were more protected from weather. Nabors 18-E was also built in large module units with big tires so it could be moved more quickly than the older rigs, so it was more suitable for working on pads with multiple wells, and for moving on Prudhoe Bay field roads.
Cold-weather, permafrost Lessons were also learned about the brittleness of steel at minus 40 and minus 50 degrees Fahrenheit. “There was a risk of it shattering,” Maskell said. Companies soon acquired special cold-weather steels.
Heinze recalls having to replace most of the insulation on wiring on older rigs. “The drilling companies had put in what they thought was cold-weather insulations but they never had to deal with minus 40 or minus 50,” he said.
Stagg said a lot of the industry’s early Arctic technology, like special cold-weather blends of cement, came from Canada where there was experience in northern latitudes. But even in Canada there was little experience with permafrost.
There were tough lessons with permafrost. Early wells were drilled right on the tundra, which turned to mud when the spring thaw came. The embarrassment of eroding tundra and permanent landscape scars created ammunition for environmental groups, who were becoming active.
On the North Slope companies began building gravel pads to protect the tundra and permafrost but it took a while to learn to do this properly. It was fortunate that the North Slope, at least in the Prudhoe area, is blessed with ample gravel resources. Without nearby gravel the oil field and pipeline would have been much more difficult to engineer and build.
Environmental standards change Environmental standards of the late 1960s would make people wince today. Stagg worked on the 1968 discovery well and recalls crude oil produced in production tests being flowed out on the tundra. It was burned off, but it still left a mess.
These practices changed as industry began feeling more environmental scrutiny.
Gravel enclosures, called reserve pits, were built to contain produced oil and used drill fluids, and rock cuttings from drilling. The reserve pits were eventually lined with impermeable membranes to prevent fluids from contaminating the gravel and seeping to the surrounding tundra.
It was a solution but not a perfect one. Under pressure from regulators the industry took out the reserve pits, and they are gone today. Drillers now truck waste fluids and drill cuttings from even remote exploration rigs to specially built disposal wells, sometimes at substantial distances, where fluids and wastes are injected underground.
Colorful stories Stories from the very early days on the Slope are often colorful. Stagg, in 1968, remembers going over to the Atlantic Richfield offices early in the day to get the daily drill report from the Prudhoe discovery well site.
People huddled around the radio to hear the latest from the drillers but the static was bad. All that could be made out was, “… and we’re out of ice cream. Make sure there’s ice cream on the next plane!”
Keeping the drillers happy was top priority for ARCO. Stagg happened to be going north to do more wellsite tests, and he made sure he had ice cream.
Another tale that Stagg tells, which has been recounted by many, is that after the discovery was made there were no instructions to keep the information secret.
Rig crews freely passed around copies of well logs and talked it up, even in bars. “We knew we had a big discovery but no one told us to keep it under wraps,” Stagg said.
A couple of weeks passed and then the word came down from ARCO’s top brass to button down the information. “We had to run around and retrieve as many copies of the well logs as he could,” Stagg said.
What’s also interesting, he said, is how skeptical rig crews were in those days that the oil they discovered would ever be produced. “Everyone knew we had a big oil find, even bigger than East Texas (until Prudhoe the largest U.S. oil field).
“But no one believed a pipeline could actually be built to the North Slope. We all thought the oil would just be stranded.” No one Stagg knew on the rigs rushed out to buy Atlantic Richfield stock (the Richfield and Atlantic oil companies had just merged).
Seismic and permafrost One of the most intriguing stories, however, and one which illustrates the power of one decision, comes from the years before the discovery and even the first Prudhoe Bay lease sales.
Roger Herrera, a retired BP geologist, was involved in the company’s early-1960s North Slope exploration. He remembers the first seismic “shoot” across Prudhoe Bay, by BP, in preparation for the state’s first lease sale in 1964.
A huge problem for geophysicists in those days was interpreting seismic “shot” through permafrost because it was unknown just how the frozen soil affected the velocity of the sound waves, which were critical in the analysis.
“We knew about permafrost but no one knew how it affected the velocity of sound. It was a real dilemma because just changing the velocity in the interpretation could radically affect the results,” Herrera said.
“With one adjustment the interpretation would be a flat line with no structural formation,” like the flat landscape of the surface. “With another adjustment, a broad, gentle anticline appeared with closures on all sides,” just the kind of place a massive oil deposit could form, he said.
There was a long debate between the geophysicists and geologists in BP’s Palos Verde, California, office where Herrera worked at the time, and participated in the discussions. “The geophysicists didn’t know what to make of it, so they prepared two sets of interpretations for the discussions. One showed the anticline and the other showed nothing,” Herrera said.
Geologists optimistic Exploration geologists are optimists by nature, however, and Herrera remembers the geologic teams pushing for the more positive interpretation, and for the company to bid in the upcoming Prudhoe sale. At the time, however, the company’s London office was pushing to curb spending under pressure from the British government, which was trying to stem the outflow of pound sterling currency (the government owned about half of BP at the time).
London was also turning sour on the North Slope. Several wells drilled by BP and its partner, Sinclair, were failures and after tens of millions of dollars had been risked BP’s management was worried about spending more.
Luckily, the optimism of the geologists prevailed. BP went ahead and bid on Prudhoe Bay in the first state sale, but the company was financially constrained and had lost its partner Sinclair, which had decided against spending more on the Slope (a decision that led to the company’s demise). In bidding, BP was up against competition with deep pockets: ARCO and Humble (now Exxon) who had formed a partnership in earlier North Slope exploration wells.
The crest vs. the flanks ARCO and Humble were able to obtain leases on the crest of the apparent structure, which is often the best place to find oil. BP, conserving its cash, had to bid on leases along the flanks of the anticline where there was less competition.
As it turned out the crest of the structure held Prudhoe Bay’s huge gas cap but the bulk of the oil was along the flanks on the reservoir. ARCO and Humble wound up with most of the gas and BP wound up with most of the oil.
The seismic interpretation problem in permafrost problem was to continue into the late 1960s and to bedevil companies preparing for the state’s September 1969 lease sale. That sale offered leases around Prudhoe Bay not sold in the first lease sales five years earlier.
“Most companies knew permafrost existed but what most didn’t know is that its depth varied,” said Harold Heinze, recalling the frenzied months before the lease sale.
“Permafrost is at 2,000 feet depth across much of the Slope but it disappears offshore, so you can go from 2,000 feet to zero in 10 miles,” he said. The depth also varied underneath large lakes.
Heinze said it was this kind of misinterpretation that led to one company bidding $100 million for leases west of Prudhoe Bay in the belief that an underground structure was present. “It turned out to be a myth,” Heinze said, because of the faulty seismic interpretation.
“If a company had well data as a control on seismic data the problem could be managed, but if companies had no wells and no data, they were flying blind,” in preparing bids for the 1969 lease sale, he said. Just a few companies, including ARCO, Humble and BP, had been able to actually drill wells.
Partly for that reason much of the $900 million received in bonus bids by the state that September turned out to be unproductive caribou pasture.
The state’s 1969 lease sale woke Alaskans up to the significant of the North Slope discovery, however. It also put the amounts of big money into the state treasury which would allow the young state of Alaska, then only a decade old, to begin expanding public services, like schools.
Coming next week: Horizontal and coiled-tubing drilling faced a big push back from conventional drillers
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