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March 2010

Vol. 15, No. 11 Week of March 14, 2010

BP’s heavy oil test facility ready

Company plans to start production in May to test technical feasibility of producing resource without the need for underground heating

Alan Bailey

Petroleum News

BP has nearly completed the construction of a $100 million facility on the Milne Point S-Pad on Alaska’s North Slope to test ways of producing heavy oil from the Ugnu formation a few thousand feet below the pad. The tests should start in May, company spokesman Steve Rinehart told Petroleum News March 10.

BP has completed four wells, including one horizontal well, at S-Pad for the tests, Rinehart said.

Eric West, BP manager for heavy oil in Alaska, told the State of Alaska House Resources Committee Feb. 16 that the purpose of the tests is to determine whether the techniques that BP eventually hopes to use for commercial heavy oil production are technically feasible. And, given the many technical and commercial unknowns, commercial heavy oil development, if feasible, could still be four to five years away, West said.

Cold honey

Heavy oil has a consistency similar to cold honey and is too viscous for production through a conventional oil well using conventional oil production techniques, West said. And heavy oil is distinct from viscous oil, a product with a viscosity somewhere between heavy oil and regular crude oil. Viscous oil can flow through a conventional well and has been produced successfully from the North Slope for several years using horizontal drilling techniques.

West said there are between 13 billion and 21 billion barrels of heavy oil known to be in place under the North Slope. The combination of North Slope heavy oil and viscous oil resources represents a total volume of about 20 billion barrels of oil in place, he said.

“Even if we only get a fraction of that, say 10 percent, to the surface, it’s still a huge potential oil field,” West said. “… This could be really, really big.”

But the economic viability of producing North Slope heavy oil is uncertain. The difficulty of bringing the thick, viscous oil to the surface would make production of the oil relatively expensive. At the same time, the relatively low content of light hydrocarbon products such as gasoline in the oil means that heavy oil is less valuable than light oil.

“At $100 per barrel for light oil, Alaska heavy oil will fetch probably about $90 on the market,” West said.

But, although it makes sense to place a higher priority on producing the more valuable light oil than on producing heavy oil, it is important to start heavy oil production from the North Slope before light oil production runs too low: Light oil is needed for mixing with and diluting the heavy oil, so that the heavy oil can be shipped through the trans-Alaska oil pipeline system to market, West said.

Without light oil to dilute the heavy oil, the oil producers would need to use other extremely expensive techniques such as refining the heavy oil on the North Slope or heating the transportation pipeline, to be able to ship the heavy oil products from the Slope, West explained.

“Given that linkage with (light oil), we need to be looking into heavy oil now, not later,” West said.

Production factors

But determining the optimum way of producing heavy oil depends on the exact composition of the oil and the quality of the reservoir rocks that contain the oil, he said. And that in turn links back to the way in which the heavy oil originated.

Both viscous and heavy oil have formed as a consequence of bacteria eating the lighter components of regular light oil, thus leaving heavier residues. And because the bacteria cannot survive in the relatively high temperatures at depth, North Slope heavy oil occurs in the shallow Ugnu formation at depths of about 4,000 feet. Viscous oil occurs in slightly deeper strata, at depths above 5,000 feet.

But, with the various rock strata sloping to different depths at different locations across the central North Slope, the quality of the heavy oil and the nature of the rocks that host the oil vary across the region. And, as a consequence, different production techniques are likely to be more effective in different places, West said.

In Canada, the “epicenter” of heavy oil development, companies have developed a variety of heavy oil production techniques, including the mining of the heavy oil deposits; steam heating the oil to reduce its viscosity for flowing through production wells; and the cold production of heavy oil through wells, perhaps using solvents to help flow the oil.

BP has rejected the possibility of mining North Slope heavy oil. And, although the nature of the heavy oil deposits in the area of the Kuparuk field would appear to be appropriate for steam-induced production, the deposits at Milne Point and over the Prudhoe Bay field are more suited to cold production, West said.

CHOPS

So, BP has homed in on a specific cold technique known as cold heavy oil production with sand, or CHOPS, for its Milne Point heavy oil tests. The company is also going to test the technical viability of using horizontal wells — a horizontal well running along the rock layer that contains the oil could contact a much larger volume of oil than a steep or vertical well that cuts straight through the layer.

The CHOPS technique only works in soft, unconsolidated rock and involves the use of what is called a progressive cavity pump, in effect a kind of Archimedes screw that spins at high speed at the bottom of a well, sucking a mixture of sand and oil into the well through 1-inch perforations in the well casing. The slurry of oil and sand that consequently flows up to the wellhead is piped into a heated separation tank, where the sand sinks out of the oil for removal and disposal.

In 2008 BP successfully tested the CHOPS technique in a single well at the Milne Point S-Pad, extracting about 700 barrels of heavy oil from the Ugnu formation at a peak rate of about 120 barrels per day, but using standard oilfield equipment to process the produced material.

Scaled up

The new test facility at S-Pad represents a major scaling up of that initial test, with multiple wells and custom-built heavy oil production equipment. That equipment includes two large sand separation tanks, for safety reasons heated indirectly by a closed loop of circulating fluid. And the facility has a control module containing instrumentation and electronic controls.

This relatively complex facility is significantly more expensive than simple CHOPS facilities used in Canada, West said. The complexity reflects in part the need to meet BP’s safety standards as well as federal and state codes, he said.

In addition, BP views the facility as a scientific test bed, to flesh out suitable North Slope heavy oil production techniques.

“We’re actually trying to develop some fundamental science about how heavy oil extraction techniques work, such that we can master them and reduce the unproductive well count,” West said. “… This is very much an experimental prototype.”






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