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BP, Savant get go ahead on Badami; ASRC joins project
The state recently approved a plan to restart the shut-in Badami field on the North Slope.
The plan of development gives BP and Savant Alaska until Sept. 30, 2009, to drill an exploration well at Badami, or give up a significant portion of the leases in the unit.
Savant Alaska, the local subsidiary of Denver-based independent Savant Resources LLC, will run the program on behalf of oil giant BP, the operator and sole working interest owner of Badami.
Savant plans to bring new technology to bear on Badami, hoping to significantly increase oil recovery at the field long considered promising, but uncooperative.
Badami needs investment The partnership brings together one of the oldest and largest players in the state with one of the newest and smallest.
BP has been looking at investing more in Badami since 2001, and even tried to farm out acreage in the past, according to Simon Harrison, an asset manager with BP.
“The current business environment has enabled that to happen now,” Harrison said.
Comparing the Badami facilities to a car unable to move at half a mile per hour, Harrison said it became “doubtful” BP could keep the Badami plant and pipeline alive at the low production rates seen over the past few years.
BP talked with several companies over this past winter, and eventually signed a deal with Savant, which agreed to bring the ASRC Energy Services in as a partner at BP’s request.
Plan to frac horizontal wells BP shut down the Badami field a year ago to “recharge” the reservoir, hoping that allowing the field to rest would build up pressure underground and ease production.
But that move was only the most recent in a decade of frustrating starts and stops.
The easternmost developed field on the North Slope, Badami originally promised to produce around 35,000 barrels of oil each day at its peak.
That would have made it the fifth most productive oil field on the North Slope, but Badami underperformed from the start, producing only 5,000 bpd during its first few months, about half of the expected startup volume.
The field was only producing around 900 bpd by the time BP shut it down last year.
The reason for that low output was the complex geology of Badami, considered by some to be among the most challenging in the world to develop.
The turbidite formation at Badami has a series of channels, like fingers on a hand. The trouble has been getting those channels to “communicate” so that oil moves from one to the next.
Savant plans to drill horizontal wells at Badami and hydraulically fracture the channels to reach more of the oil-bearing sands. Previous attempts to develop Badami have used hydraulic fracturing, but only on traditional vertical wells.
The technology for fracturing a horizontal well simply didn’t exist when BP first tried to develop Badami in the late 1990s, according to Greg Vigil, executive vice president and chief operating officer for Savant.
Hydraulic fracturing involves pumping large amounts of fluid into a well in order to create new avenues in the reservoir for oil and gas to travel to the surface.
Vigil said high oil price alone wouldn’t have justified returning to Badami. Only high prices in conjunction with the new technology promise to make the venture a success.
Badami a technical problem Although Savant is relatively new to Alaska, arriving during a March 2006 lease sale, the company already has experience near Badami.
This past winter, Savant drilled the Kupcake No. 1 exploration well from an ice island in Foggy Island Bay, less than 20 miles west of Badami.
Ultimately, though, Kupcake failed to uncover the oil Savant hoped to find.
Vigil said Badami is more in line with the projects Savant prefers, where the trick isn’t finding oil, but getting known accumulations of oil out of the ground.
Because even if Kupcake had been successful, Savant would have needed to spend time and money connecting the field to existing infrastructure on the North Slope.
That infrastructure is already in place at Badami.
“We’re taking technical risk as opposed to exploration risk in the Brookian sands,” Vigil said.
This winter, Savant plans to drill an exploration well in one of the satellite fields outside the Badami Sands participating area, but within the larger Badami unit. If BP and Savant fail to perform the work commitment laid out in the development plan, the companies have agreed to relinquish all the leases outside of the Badami Sands participating area.
—Eric Lidji
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