BP and Savant looking at Badami restart

Major and independent would drill two wells over the next two years to avoid losing lands at the unit, hopefully restart field

Eric Lidji & Kay Cashman

Petroleum News

Looking to possibly restart the long shut-in oil field, operator BP Exploration and an independent oil company are proposing to drill two wells in the Badami unit to avoid losing leases at the problematic North Slope field.

Pending state approval of the development plan, BP and Savant Alaska LLC will drill an exploration well at the unit due east of Prudhoe Bay by Sept. 30, 2009, or give up Badami leases outside the Badami Sands Participating Area and waive the right to appeal.

The companies also agreed to drill a development well at Badami by Sept. 30, 2010.

Savant Alaska is the local subsidiary of the Denver-based Savant Resources LLC. The company drilled an unsuccessful exploration well this winter at the offshore Kupcake prospect, located between Prudhoe Bay and Badami near BP’s proposed Liberty project.

The drilling commitment is part of a revised seventh plan of development for Badami.

According to its proposed revised plan of development, Savant will fulfill the work commitments contained in the new development plan on behalf of BP.

Those commitments require Savant to complete drilling and seismic work by firm deadlines or risk giving parts of the Badami unit back to the state.

Following state approval of the revised plan of development, Savant will have 90 days to secure a drilling rig for the exploration program. Then, the company will have until the end of the year to take another look at seismic surveys from certain areas at Badami, Northwest Badami and Mikkelsen Bay to finalize a target for the exploration well.

Finally, Savant will have to drill the exploration well. Depending on the time of year Savant drills the wells, it will either use an ice island or an existing gravel pad at Badami.

BP originally submitted the plan of development on April 1, but the state rejected the filing, saying it lacked key pieces of information. BP continued working on the Badami development under an interim plan.

During April and May of this year, BP brought Savant on board and the two companies began “engineering studies, permitting and inspection activities” needed to restart the Badami plant. BP filed its revised plan of development on June 20.

In the revised plan, BP and Savant commit to showing the state a strategy for developing the Brookian reservoir at Badami by the end of the year. They also agreed to finish all engineering, permitting and inspection work related to restarting the Badami plant by the end of the year.

According to BP, restarting production through the plant could be expensive, as permitting the power plants at Badami will require a slate of new regulatory requirements from the Alaska Department of Environmental Conservation.

Pending approval from the state Department of Natural Resources, the revised plan of development would run from Aug. 15, 2008 to Nov. 15, 2010.

Hoping to hold on to prospective acreage around the proposed exploration well, BP is offering to give back 30 percent of the current Badami unit on Aug. 15, 2008, just two weeks past the tenth anniversary of first production at the unit.

Giving back the acreage by late summer would allow the state to include it in the next North Slope areawide lease sale, BP said in its proposed development plan.

Although Badami has been plagued by production problems from the beginning, the field helped clear a path for the development of other North Slope fields like Alpine and Tarn.

By drilling wells from a relatively small central pad rather than being dispersed across a large surface area, Badami pioneered a “small footprint” approach to North Slope development.

The unique structure of the Badami reservoir ultimately led to complications during development. Badami was the first producing oil field on the Slope that involved a purely stratigraphic trap, but because the reservoir consists of large numbers of relatively small sandstone compartments, oil production from the field dropped precipitously after initial startup.

BP expected the field to produce 30,000 to 35,000 barrels of oil per day.

But the first wells proved a disappointment.

Facing a low total production rate of 2,500 bpd, BP suspended production at Badami from February to May 1999.

BP suspended production again in 2003 after daily production dropped to 1,350 bpd and kept the field offline until 2005, when it planned to use horizontal drilling techniques to tap oil from the many reservoir compartments.

In September 2007 the field was taken off line once again due to low production rates.