BP in Alaska: After startup – a new era for Alaska

Frank Baker

For Petroleum News

By mid-1977, when the pipeline tapped into the waiting Prudhoe Bay production, some 125 wells had been completed — about 65 by BP/Sohio and another 60 by ARCO and Exxon. With an average expected output of 10,000 barrels of oil per day from each well, the field was ready to meet initial pipeline throughput demands.

In 1978, BP assumed 54 percent ownership interest in Standard, as prescribed in the 1970 agreement. Until then BP Alaska had been a subsidiary of British Petroleum Ltd. in London. At this point it became the production subsidiary of Cleveland-based Standard Oil. The name changed to Sohio Alaska Production Co. (In 1986 the name was changed again to Standard Alaska Production Co.)

BP’s planning teams realized early that maximizing recovery from the big Prudhoe Bay field would require ongoing investment. During the 1980s Sohio, and later Standard, embarked upon a multibillion-dollar capital development program which would virtually quadruple the size of its Prudhoe Bay production facilities and increase the field’s expected recoverable oil reserves from 9.6 billion barrels to 10.8 billion barrels. These and other expenditures by Standard and its partners would result in the startup of three additional North Slope oil fields — Kuparuk, Lisburne and Endicott.

The Kuparuk field, about 30 miles west of Prudhoe Bay, came on stream in December 1981 and today remains, after Prudhoe Bay, the second-largest producing oil field in North America. In addition to its vast reserves, Kuparuk would ultimately become a gateway to further exploration and development to the west of Prudhoe Bay.

Capital expenditures in the Prudhoe Bay field paid for additional facilities to handle increasing quantities of water and gas produced with the crude oil. For example, in 1978 producing one barrel of oil required processing about a pint of water. That figure increased sharply in just a few years to tens of gallons. Production of gas also increased significantly.

Major recovery programs, such as the $2 billion fieldwide waterflood program and the miscible gas injection, or Enhanced Oil Recovery program were initiated to help sustain production levels. Ultimately the EOR project was credited with adding some 800 million to 1 billion barrels of oil to Prudhoe’s recoverable reserves.

This and other projects, each costing hundreds of millions, and even billions of dollars, came in alphabet soup names like Produced Water Expansion, Low Pressure Separation, Wellpad Manifolding, Artificial Gas Lift, Distributive Control System.

In the early to mid-1990s, a billion-dollar-plus project to increase the field’s gas-handling capacity — called Gas Handling Expansion, Phases 1 and 2 — created the largest gas handling system of its kind in the world. The two large facilities — the Central Gas Facility and Central Compression Plant — were expanded to handle about 8 billion cubic feet of gas per day.

The BP-ARCO Miscible Injectant Expansion project, or MIX, was brought on line in 1999, and increased Prudhoe Bay liquids recovery by 50 million barrels.

MIX facilities were built in Anchorage by VECO Construction Inc. at the Port of Anchorage site developed by BP Exploration and its contractors for fabrication of modules for its Northstar development.

Natural gas liquids are extracted by a refrigeration process at the CGF and shipped down the trans-Alaska oil pipeline with the crude oil. This facility came on line in 1987.

A portion of the natural gas liquids is combined with dry gas (methane) to produce a miscible (mixable) gas injectant, which is used for enhanced oil recovery. The remaining gas is routed to the CCP, which came on line 10 years earlier. At the CCP gas is compressed for re-injection into the gas cap of the reservoir to maintain pressure. Processed gas is used as field fuel.

These and other development projects, along with aggressive development drilling programs, were vital in boosting Prudhoe Bay’s production to the plateau rate of 1.5 million barrels per day in the mid-1980s, and in delaying the inevitable production decline to 1989 — about three years later than anticipated when production began.

Improved drilling technology, primarily horizontal and multi-lateral drilling, as well as coiled tubing drilling, also helped improve oil recovery in the big Prudhoe Bay field as it continued its natural decline. Collaborative studies with ARCO also played a major role in helping optimize recovery from Prudhoe’s main producing reservoir — the Sadlerochit — and boosting the recovery factor to more than 50 percent, a success rate unheard of in fields this size. Eventually, that recovery factor would increase to about 60 percent.

Looking beyond the North Slope

Plans were also under way to explore off Alaska’s western coast, which included Bristol Bay, and the Navarin, Norton and Chukchi basins.

Other ventures were considerably more costly and less successful, like the Mukluk well, a dry hole which cost Standard about $1 billion — more than any exploratory well in history. Located in Harrison Bay about 65 miles northwest of Prudhoe Bay, Mukluk No. 1 was drilled from the largest gravel island ever built in U.S. waters.

With the fall of oil prices in 1985, BP shifted its emphasis from finding new oil to maximizing production from known oil accumulations in proximity to the Prudhoe Bay industrial complex. During the 1980s and early 1990s the company improved its knowledge of areas in and around Prudhoe Bay through 3-D seismic surveys and continued drilling. During this period the company continued to improve its lease position both east and west of Prudhoe Bay, and in the Beaufort Sea just northwest of Prudhoe Bay.

In 1986 the Lisburne field was brought on stream. The Lisburne formation lies beneath the Prudhoe Bay reservoir, but is a tighter formation consisting of limestone and dolomite (carbonate). These characteristics made development of this region more challenging. But in the early 1990s the Lisburne Production Center (LPC) was expanded to allow the facility to receive fluids from other nearby fields, like Niakuk and Point McIntyre.