Is North Slope shale oil really feasible?

The question of why major oil companies do not appear to have shown any interest in potential North Slope shale-oil development came up at a meeting of the Commonwealth North Energy Action Coalition on April 11. The development of new oil resources from “tight” shale formations has upended the U.S. oil industry in the Lower 48. So, why not tackle the North Slope oil source rocks using the same approach as is being used in states such as Texas and North Dakota?

Scott Jepsen, ConocoPhillips vice president of external affairs, told the meeting that his company views this type of development in Alaska as very challenging.

“Our assessment is that it’s not quite the same rock as you have down in those places and the economics are pretty tough for shale oil up here,” he said.

Jepsen said that the initial decline rate for a shale-oil well is generally very high, making the economics in Alaska for shale very different from elsewhere. In North Dakota and Texas a typical development involves a well at every lease-line intersection, he said.

“They’ve got roads and pads everywhere. You can’t do that here,” he said.

—Alan Bailey