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Arctic Directory: Going for Liberty BP board gives green light for Beaufort Sea development; world’s biggest rig being built for project Alan Bailey Petroleum News senior staff writer
After years of debate about how and whether to develop the Liberty oil field in the Beaufort Sea, in federal waters about 5 miles offshore Alaska’s North Slope, the BP board finally gave the go ahead to bring the field into production in 2008.
In a July 14 announcement the company said that it is proceeding with full development of the field using ultra extended reach drilling from the Endicott field satellite drilling island.
Endicott, brought online in 1987, was the world’s first offshore oil field.
“Liberty is an important project for the nation, for Alaska and for BP. It demonstrates that new sources of domestic energy can be developed and produced responsibly,” said Robert Malone, chairman of BP America.
“We’re moving forward with the Liberty project and that’s really exciting for us,” Doug Suttles, president of BP Exploration (Alaska) told a July 14 Anchorage press conference. “… Our ultimate investment in Liberty will probably approach $1.5 billion.”
BP expects to recover some 100 million barrels of oil from Liberty, with a peak production rate approaching 40,000 barrels per day.
Suttles characterized the Liberty development as an example of “exploring through technology,” in which investment is put at risk to use new technologies to develop known oil pools.
“We’ll be doing a number of things that have never been done before in our industry,” Suttles said. “We’ll be drilling the longest wells ever drilled.”
Work has started Work on the Liberty project has already been cranking into action. A high-resolution 3-D survey of the drilling corridor and construction of the massive drilling rig required for the project are both under way.
“We started fabricating the rig just a few weeks ago,” Suttles said. “… Now we’re actually moving. There are people at work.”
BP is gearing up to do the civil construction work involved in expanding the Endicott satellite drilling island during the winter of 2008-09, ready to mobilize the rig to the drill site in the summer of 2009, said Darryl Luoma, Liberty project general manager. The site will be expanded from about 11 acres to about 30 acres to accommodate operating space for the rig, an extended pipe rack and a new camp for on-site workers, he said.
Following assembly of the rig on the drill site, the rig will be commissioned and handed over to the drilling operations team for the commencement of drilling in 2010. Following a three-month period of training and rig shake down, the first well will be a simple injection well for disposing drilling cuttings. That well will mark the start of a four to five-year drilling program, with first production slated for 2011, Luoma said.
Shallow water
The Beaufort Sea is about 20 feet deep in the area of Liberty and BP originally conceived a field development plan involving an offshore production island. The field would have become a look alike to the Northstar field, in the Beaufort Sea around 35 miles to the west, with a subsea pipeline carrying oil to the shore. But in 2002, following major cost and schedule overruns in the Northstar development, BP cancelled its plans for Liberty.
In 2005 the company came up with an alternative plan to develop the field using extended reach drilling from a shore location, perhaps at Point Brower, on the west side of Foggy Island Bay, or at another location further east. The company had already successfully used extended reach wells with horizontal departures of 25,000 feet and more to tap oil from an undersea reservoir in its Wytch Farm field in southern England.
Early extended reach drilling concepts for Liberty involved piping the production from a remote drill site to either the Endicott or Badami facilities for processing, Luoma said.
But, rather than embarking on a significant North Slope infrastructure extension to a remote location, in addition to dealing with some major drilling challenges, BP eventually elected to drill extended reach wells from the Endicott satellite island. The island is already connected to the North Slope road system and the wells could easily hook into the Endicott production infrastructure, Luoma explained.
The Liberty drilling pad and associated facilities will require an extension to the existing Endicott satellite drilling island. But by simply bolting Liberty onto the existing Endicott infrastructure, the surface impact of the new field will be minimized.
“What in effect we’re doing is using world-class wells, world-class drilling technology to significantly reduce … the footprint of development,” Luoma said.
And, by operating from an existing field infrastructure, BP will be able to use an amended version of the Endicott oil spill contingency plan, rather than have to develop a completely new plan for Liberty, he said.
Up to six wells The development plan that BP has now put into operation involves drilling up to six ultra extended reach wells to hit targets two miles underground, anywhere from six to eight miles from the surface well location at Endicott. The drilling plans involve drilling downwards from the Endicott drill pad and then deviating the wells to the east into near horizontal configurations. Then, as the drill bits grind their way close to the Liberty field location, the drillers will deviate the wells down into the reservoir, Luoma said.
The required horizontal departures of 34,000 to 44,000 feet from the surface wellheads would establish new world records.
“We see Liberty as really the next step, the next progression out, for extended reach drilling,” Luoma said.
BP has already conducted extended reach drilling with horizontal departures up to about 20,000 feet in the Milne Point, Niakuk and Northstar fields on the North Slope and in the Beaufort Sea. But rotating the drill string in an exceptionally long well requires an especially powerful rig. The lack of suitably powerful drilling rigs on the North Slope has proved an obstacle to pushing the extended reach drilling envelope in northern Alaska, Luoma said.
Massive rig built for Liberty For Liberty drilling, BP commissioned Parker Drilling Co. to design and build the world’s most powerful land based drilling rig.
“We describe the rig as one of the enabling pieces of this project — we actually wouldn’t do this project if we weren’t bringing this special piece of equipment up here to Alaska,” Luoma said. “… This piece of equipment delivers about two times the power requirement to turn the drill pipe as any other piece of equipment out there in the industry.”
But with exceptional lengths of drill pipe subject to exceptional stresses, the weight and strength of the pipe material become critical to drilling success. BP has been developing lightweight steel alloy pipe designs for the Liberty drilling and may even use aluminum piping at the downhole ends of the wells.
“That pipe, 30-foot lengths of pipe screwed together, over nine miles long has to hold together under some extreme stresses and pressures,” Luoma said. “We have a drill-pipe development program that’s under way now that is producing Liberty-spec drill pipe … that’s running through lab testing.”
Field testing in Alaska of the Liberty-spec piping later in 2008 should enable BP to order the piping by the end of the year, he said.
The directional drilling will use state-of-the-art rotary steerable technology to steer a drill bit along a planned well path across several miles into a selected target in the oil reservoir.
Mud pulse technology, in which sound signals are transmitted through the drilling mud in the well, will enable the drillers to communicate with equipment at the downhole end of the well, to determine the precise location of the drilling bit and to manipulate the steering technology.
Well casing The placement of steel casing along the length of each well bore will also prove critical to success.
“Our biggest risk in drilling a well all the way out to the Liberty reservoir is having a weak zone … that caves in on us,” Luoma said.
And the exceptional length of the Liberty wells will entail the use of four different casing diameters, two more diameter changes than in a conventional well. The casing diameter will become progressively smaller from the surface end of the well to the downhole end.
BP is also trying to minimize drilling problems by conducting the 3-D seismic survey that has just started in the waters east of Endicott. Rather than delineating the field reservoir, the survey is focusing on the drilling corridor between Liberty and Endicott. The current seismic data from the area isn’t adequate for detailed well planning, Carl Lundgren, Liberty subsurface manager, explained.
“We’re going to be able to precisely place different casing strings all the way down through the rock section into the reservoir,” Lundgren said.
The use of 3-D visualization software will also enable the identification of potential hazards that might cause expensive drilling delays.
“We’re able to … map certain features … look for different weaknesses in the rock and be able to angle the wells around different zones that we see a concern for,” Lundgren said.
For example, the well planners want to precisely delineate a worrisome 2-mile by 12-mile canyon structure in the subsurface of the drilling corridor.
“We’ve never drilled something like that,” Lundgren said.
Although there’s always a risk of failure, BP is confident that it’s done its homework in assessing the technical feasibility of the Liberty drilling.
“We’ve been working for the last three years and even beyond that identifying how to drill these wells,” Luoma said. “We believe with the technical work that we’ve done we can deliver the wells at Liberty.”
“What we’ve done is moved it from something we wanted to do three years ago but weren’t willing to invest in yet,” Suttles said. “… “You’re never guaranteed but obviously we believe we’re going to be successful.”
No state production tax Because Liberty lies in federal outer continental shelf leases, the field comes under the jurisdiction of the U.S. Minerals Management Service rather than the State of Alaska. And BP will not pay state production tax on Liberty oil.
“This will be the first fully federal development in Alaska, the first field that lies completely in federal leases,” Suttles said (the Beaufort Sea Northstar field straddles state and federal land).
But as well as generating revenues for the federal government, the field will generate revenues for the state and the North Slope Borough, Suttles said. Because the field is located less than 6 nautical miles offshore, the state will receive 27 percent of the federal royalties from field production. The new Liberty facilities will generate property taxes.
And the field will result in employment for Alaskans. Right now 250 Alaskans are working on the project and, at its peak, employment will increase to 500, Suttles said.
Liberty oil will also help keep the trans-Alaska pipeline in operation and, by improving the economics of the Endicott facilities, will extend the life of that field, he said.
But Suttles sees the challenges and risks involved in developing Liberty as part of a worldwide trend towards seeking oil in increasingly difficult situations.
“This is the sweet spot where a company like ours participates,” Suttles said. “If you look around the world we’re in the tough places doing the toughest stuff, because that’s our niche. … That’s why we’re still bullish about the future for Alaska.”
Editor’s note: The Endicott causeway was constructed in 1984-85. Endicott production – the first from an offshore filed in the Arctic — began 1987. During the peak production years from November 1987 through October 1993, Endicott averaged about 104,250 barrels of oil per day. Production has declined over the years, dropping to about 17,600 barrels per day in 2004, and to an average of 15,689 barrels per day in November 2008.
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