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ExxonMobil spuds well at Point Thomson While this season’s work under way, settlement needed with state says Exxon’s Craig Haymes, so 2014 production won’t be delayed Kristen Nelson Petroleum News
Actual drilling has begun at Point Thomson.
“ExxonMobil informed my administration that, at 2:30 a.m. today, drilling operations began,” Alaska Gov. Sarah Palin said in a May 8 statement.
Craig Haymes, ExxonMobil’s Alaska production manager, said May 13 at the Alaska Oil and Gas Association’s annual luncheon that the first well, PTU 15, had been drilled to 3,600 feet as of that morning. This is an injector well, Haymes said, and in a pair with PTU 16, a production well, will provide cycling for production of liquids and re-injection of gas at the high-pressure condensate field.
The other three wells in the initial five-well plan are oil delineation wells.
Haymes said after the luncheon that settlement talks with the State of Alaska continue and that the state and the companies are working well together in those settlement discussions.
But he said settlement of all issues is needed for the project to move forward.
These issues revolve around the state’s refusal, beginning under the previous administration, to accept a plan of development for the Point Thomson unit which did not lead to production; the state ultimately terminated the unit and later took back all but one of the leases because they were being held beyond their original term by virtue of inclusion in the unit.
Haymes said issues include the state’s termination of the Point Thomson unit which is in Alaska Superior Court; the state’s termination of the leases at Point Thomson which is under administrative appeal to the commissioner of the Department of Natural Resources; damages and permit applications’ issues, in Superior Court; and ExxonMobil’s application to the Alaska Oil and Gas Conservation Commission for a mandatory unit at Point Thomson — Haymes said the commission has denied reconsideration of an earlier denial of the application.
Conditional decision Drilling of PTU 15 and PTU 16 is taking place on two leases at Point Thomson which DNR Commissioner Tom Irwin allowed the companies to continue to hold under a conditional decision issued in late January — based on a commitment by ExxonMobil and the other Point Thomson owners to drill and complete two wells by the end of 2010 and begin production by the end of 2014.
Haymes said settlement needs to be reached or it will hold up permitting and impact the beginning of production. He said the company will begin applying for federal permits in June for the production facilities.
Permitting also will begin soon for the remaining three wells in the initial five-well drilling program. One issue there is drill sites: Only one of those wells is on the central pad from which Exxon is drilling this year. The other two of the three — all oil delineation wells — will be drilled from pads to the east and west. There is gravel on the east pad site, Haymes said, but none on the west pad site.
As to when Exxon would have to start applying for permits for that drilling activity, Haymes noted it had taken two years to get to this point. Sites were staked for the present wells in March 2007, he said.
What’s next? Work began at the Point Thomson pad in August with arrival of the first barges carrying 700 tons of equipment. Haymes said one advantage of the Point Thomson site was that the barges could pull up to the gravel and lower their ramps, allowing equipment to be driven off onto shore.
In addition to the ice road, a mile-long ice airstrip was built on the water, large enough to accommodate a C130 Hercules with a 130-foot wingspan.
Winter mobilization to Point Thomson began using rolligons; 30 percent of the equipment was mobilized that way while the ice road was under construction, he said.
There wasn’t enough gravel at the existing Point Thomson pad, Haymes said, so they needed to bring in 10,000 insulated pads to protect the tundra over a 13-acre area; 1,760 large rig mats were put down on top of the insulated pads to protect them.
The drilling rig reached the pad in early April, and on May 8 drilling began from the surface conductor set in August.
Exxon can only drill to 5,000 feet at PTU 15 and PTU 16 this season because they are adjacent to the coast and drilling into hydrocarbon reservoirs there is limited to Nov. 1 through April 15.
Total depth will be 16,500 feet, but that won’t be reached until next year.
Additional equipment and supplies will be barged in this summer and in late December or January drilling will begin on the intermediate portion of the wells, Haymes said.
He said the first two wells combined are estimated to cost almost half a billion dollars — a cost which includes pad work and the rig.
The weather Companies working on the North Slope routinely say plans are subject to permitting and the weather — both were illustrated by this winter’s activity at Point Thomson.
Because the state had terminated the unit and taken back the leases, Exxon didn’t receive its ice road permits until after Irwin issued his interim conditional decision in late January; the company got the ice road permits in early February.
During the eight weeks it took to build the ice road, 35 days were lost to weather, Haymes said.
In addition to general weather delays, a storm surge in the Beaufort Sea required a portion of the ice road to be rebuilt, and then unusually warm weather in late April produced a quick thaw. State-owned North Slope coastal lands were closed for off-road winter travel effective noon April 28, giving companies 72 hours to complete off-road travel.
Haymes also said at the luncheon that he would be leaving Alaska.
He is returning to Australia in June where he will manage ExxonMobil’s interests on that continent.
Dale Pittman, currently operations manager for Exxon Neftegas Limited at Sakhalin, will be ExxonMobil’s new Alaska production manager.
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