Providing coverage of Alaska and northern Canada's oil and gas industry
August 2006

Vol. 11, No. 34 Week of August 20, 2006

Conoco to expand CD-2

Pad size to double for Qannik development, more storage for Alpine projects

By Kristen Nelson

Petroleum News

ConocoPhillips Alaska has applied to the U.S. Army Corps of Engineers to expand the CD-2 pad at Alpine in the Colville River unit for development of the Qannik reservoir and to allow for additional storage for Alpine CD projects.

The proposed pad extension would allow room for 18 Qannik wells although the Qannik facilities area, and four of the proposed wells, would be on the existing CD-2 pad according to plans the company filed with the Corps.

Alpine field owners ConocoPhillips and Anadarko Petroleum announced the Qannik discovery in July (see story in July 23 issue of Petroleum News). Qannik is an accumulation that lies above the Alpine accumulation. Alpine, the first Colville Delta unit field to produce, came online in 2000. ConocoPhillips has been drilling through Qannik (at about 4,000 feet) to reach Alpine (at about 7,000 feet). The company put in a well to test it earlier this year, a well which was production tested for 19 days in June. The Qannik test produced 1,200 barrels per day of 30 degree API gravity oil from a 25-foot thick sandstone; Alpine, at 40 degrees API, is a lighter oil.

Pad will almost double in size

The expansion is off the west and south sides of the pad, almost doubling its size, with most of the addition extending the width of the pad to the west. The entire pad, existing and the expansion area, will also be lengthened to the south.

The Corps said approximately 147,000 cubic yards of clean gravel fill would be placed on 10.7 to 11.6 acres of tundra adjacent to the Alpine CD-2 pad. ConocoPhillips told the Corps the variation in acreage is to allow for “topography issues that may be encountered in the field.” The existing pad is 532 feet by 834 feet; the expanded pad would be 937 feet by 965 feet.

The Corps said the proposed schedule would begin with gravel placement in the winter of 2006-07, followed by facility construction and installation between the summer of 2007 and the winter of 2008, development drilling beginning in the spring thru fall of 2008 and production start-up scheduled for summer to fall of 2008.

Two construction-related ice pads would be built, one 20 acres and the other one-acre, for storage and staging, and two five-acre ice pads adjacent to the Arctic Slope Regional Corp. mine site to facilitate gravel removal.

The Corps said ConocoPhillips also proposes to haul an additional 10,000 cubic yards of gravel and stockpile it on the CD-1, CD-3 and CD-4 pads for future use.

More Alpine development

The main Alpine facilities at the CD-1 pad already handle Alpine production and production from the Fiord satellite to the north which started up earlier in August (see story in Aug. 13 issue of Petroleum News). Nanuq, south of CD-1, is projected to come online before the end of the year.

ConocoPhillips is pursuing state, local and federal permits for additional Alpine satellite developments, including Alpine West, which would be the first development within the National Petroleum Reserve-Alaska and anticipates development of additional NPR-A satellites over the next several years.

The company filed applications in September 2005 for Alpine West, the CD-5 pad development, in NPR-A on Kuukpik Corp. surface land some six miles west/southwest of CD-1. The area includes acreage leased by ConocoPhillips and Anadarko from ASRC, the State of Alaska and the Bureau of Land Management, with ASRC holding the majority of subsurface ownership.

The CD-5 pad will be across the Nigliq Channel from the main Alpine facilities and includes a 1,200-foot vehicle and pipeline bridge crossing the channel and an 80-foot vehicle bridge across a paleo-channel west of Nigliq. A 4.2-mile gravel access road will link CD-5 with CD-2.

The plan is to start CD-5 construction in January 2007. ConocoPhillips said in January 2006 that it plans to apply for CD-6 permits late this year, with CD-6 construction to start in January 2008. The permitting and construction schedule for CD-7 is “undermined at this time,” ConocoPhillips told the Corps in January.

CD-5 moved ahead of CD-6

ConocoPhillips had at one time proposed developing CD-6 before CD-5. The company said there are two reasons it is doing CD-5 first. The Alpine A-sand, which is the primary producing horizon at CD-5, “has recently been proven capable of producing at commercially viable rates via peripheral drilling” from CD-2.

A well completed from CD-2 in the summer of 2004, the CD2-31, “the first dedicated Alpine A-sand production well,” had initial production “at a surprisingly high rate” of more than 3,000 barrels of oil per day. The CD2-21 and CD2-05 wells confirmed this “favorable reservoir performance,” ConocoPhillips told the Corps. “Unfortunately, we have now reached the practical limits of the A-sand reservoir that can be reached” from the CD-2 drill site.

ConocoPhillips’ predecessor Phillips Alaska drilled and sidetracked an exploration well to the Alpine West prospect in 2001 to evaluate the western limit of the Alpine reservoir. Both the original well and the sidetrack, drilled from CD-2, were plugged and abandoned.

When the Alpine-A sand information was incorporated into development plans for CD-5 there were several changes: planned well count was reduced by about 30 percent; expected peak production was increased by about 40 percent; and there is the “potential for additional oil recovery to the west of the planned core development area.”

ConocoPhillips told the Corps that based on current Alpine field production and “updated projections” for oil production from CD-3 (Fiord), CD-4 (Nanuq) and CD-5, “the Alpine area’s oil production is expected to be limited by the processing facility’s gas handling capacity for the next few years.” Wells with the highest gas-oil-ratios “will likely be shut in during much of the year.”

CD-6 wells will produce at higher gas-oil-ratios than CD-5 wells, and “will ‘back out’ proportionally more oil production from the Alpine pipeline.” Because of this, the company said, in the 2008-09 timeframe CD-5 production is expected to be “economically advantaged” compared to CD-6 production.

Liberty-style development not viable at CD-5, CD-2

ConocoPhillips told the U.S. Army Corps of Engineers that BP’s recent announcement of plans to use extended reach drilling at its Beaufort Sea Liberty oil prospect has produced “erroneous assumptions in the regulatory community and beyond that such well lengths can be achieved in other situations.”

“Despite the early reports from the Liberty project, BP does not yet know if it can achieve success with that drilling program,” ConocoPhillips said in its application to the Corps for an expansion of the CD-2 pad at Alpine in the Colville River unit for development of the Qannik reservoir and to allow for additional storage for Alpine CD projects.

ConocoPhillips said BP first must build or find a special drilling rig before the ERD program can even be tested at Liberty. (See brief in Oil Patch Insider in this edition of Petroleum News about the conceptual rig design contract awarded to Parker Drilling for such a rig.)

The same is true for CD-5: ConocoPhillips said there are no rigs on the North Slope capable of drilling CD-5 wells from the CD-2 pad.

ConocoPhillips said the reservoirs at Liberty and CD-5 are different.

Liberty, unlike CD-5, “does not include long horizontal wells.” Liberty “is much larger, more prolific and deeper” than the reservoir at CD-5, “and can support the financial investment in risky development plans and drilling rig construction.”

ConocoPhillips said that even if ERD was technically achievable at CD-5, it is “a smaller, lower production rate reservoir” and could not support “these types of costs and risks.”

Geological characteristics of the reservoir rock and rock stresses determine the alignment of the horizontal portion of the well, the deepest and farthest out portion of the well — where the well encounters the hydrocarbon-bearing zone. An ERD well into the CD-5 reservoir from CD-2 would come in at the wrong angle: a turn of almost 90 degrees would be required entering the reservoir. Not only is such a tight turn at such a distance “extremely difficult if not impossible” to drill, ConocoPhillips said even if some wells were successfully drilled current maintenance and repair equipment could not negotiate such a tight turn “so any well problem would necessitate shutting down the well, losing the investment and production from that location until a rig could be brought back.”

ConocoPhillips also said there are differences between the formation at CD-5 and the formation at CD-1 and CD-2: longer sections of the formation must be exposed at CD-5 because permeability — the measure of how easily oil flows into the well from the formation — is lower at CD-5 than at CD-1 and CD-2.

And, the company said, if drilling CD-5 from CD-2 was successful, the wells would cost three to five times more than if drilled from a pad at CD-5.

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.