Chevron to begin North Slope exploration in 2007

Kay Cashman

Petroleum News

John Zager, Chevron’s general manager in Alaska, told attendees of the June 5 Alaska Oil and Gas Association meeting in Anchorage that his company expects to begin exploration drilling of its North Slope White Hills acreage in the winter of 2007-08.

According to Zager it will be the first Chevron-operated drilling on the North Slope since the Amethyst State No. 1 well was drilled in February 1994 by Unocal, which has since been purchased by Chevron.

The White Hills are west of the Sagavanirktok River, south of the Kuparuk River field and southwest of the Prudhoe Bay field in Alaska’s central North Slope. Unocal acquired the initial White Hills tracts in 2001 and an additional 48 tracts in the March 1 State of Alaska North Slope areawide lease sale. Zager said the company has a total of 68 tracts in the White Hills area.

“Currently we plan to drill as soon as the 2007-08 season, assuming all commercial and logistical aspects come together; seismic could occur as early as the 2006-07 season,” Zager said in follow-up e-mails with Petroleum News.

A Kerr-McGee executive at the AOGA meeting said his company was “deep into” discussions with a possible North Slope exploration partner (see Oil Patch Insider in this issue), but when asked if Chevron was considering taking on a partner for its 100 percent-owned White Hills acreage, Zager said his company “has no immediate plans to seek a partner.”

Zager was not interested in talking about the geology of the area, but former State of Alaska Division of Oil and Gas Director Mark Myers told Petroleum News the area could be both oil and gas prone.

“There are definitely oil plays there. … Just south and east of White Hills and north of Sagwon (on the Sagavanirktok River) is where the Susie well was drilled. … Gil Mull sat on that well,” Myers said, referring to the 1966 Richfield well that was drilled just before the discovery of Prudhoe Bay.

The Susie well was 13,500 feet and, according to Mull, had some oil shows in the upper part of the hole.

“The well was unsuccessful but there is still significant interest in that area for oil,” Myers said. “The oil stained outcrops … around Sagwon Bluffs illustrate the area contains oil.”

White Hills targets, he said, would include the Cretaceous sands, including the Kuparuk River formation.

Paul Decker, petroleum geologist with the Division of Oil and Gas, concurred with Myers and Mull. He said Chevron’s recent acreage expansion in the White Hills “gives them significant running room, possibly in pursuit of a thick package of Upper Cretaceous deepwater turbidite sands penetrated with good oil and gas shows in Unocal’s Amethyst and BP’s Malguk 1 wells.”

Both wells, he said, are on Unocal/Chevron acreage taken in previous sales.

“The same Upper Cretaceous interval was show-bearing in Phillips Heavenly 1 well to the north, and the sand depositional trend may extend onto Chevron acreage north of Heavenly,” Decker said.

“This sand package is well positioned to receive hydrocarbon charge. They lie close to and stratigraphically above the HRZ and Hue Shale source rock units — rich, oil prone shales at oil to gas window maturities in this area,” he said.