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Vol. 11, No. 1 Week of January 01, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

Identifying Alaska’s pot of gold

Remaining oil and gas in northern Alaska is likely in the range of 50-60 billion barrels for oil, 200 tcf-plus for gas, excluding hydrates

Kay Cashman

Petroleum News Executive Editor

The Alliance’s theme for Meet Alaska 2006 is “The end of the rainbow: Reaching Alaska’s elusive oil and gas pot of gold,” which begs the question: What’s in Alaska’s hydrocarbon pot of riches?

In the northern part of the state more than 15 billion barrels of oil have been produced from the central North Slope since the start-up of the trans-Alaska pipeline in 1977. What remains now that the giant Prudhoe Bay field has hit a new output low, dropping from a peak of 1.6 million barrels a day to an average of 381,000 barrels per day in fiscal year 2005 and overall North Slope production has dropped to an average of 916,000 barrels per day from 2 million barrels in the same period?

USGS assessment

According to a 2005 U.S. Geological Survey assessment there is a possibility of 4 billion barrels (mean average) of undiscovered, technically recoverable oil between the National Petroleum Reserve-Alaska and the Arctic National Wildlife Refuge — that’s north of the Brooks Range to the boundary of the outer continental shelf (federal waters).

And a possibility of 33.3 trillion cubic feet (mean average) of undiscovered, non-associate natural gas and a mean of 4.2 tcf of associated natural gas and 387 million cubic feet of natural gas liquids in the same area.

A 2002 USGS assessment of NPR-A indicated mean recoverable oil reserves of 10.6 billion barrels and mean recoverable gas reserves of 61.4 billion cubic feet for that region — numbers that top agency personnel have since indicated could be low because of public information gleaned from recent discoveries in NPR-A.

And the 1998 USGS assessment of ANWR’s coastal plain estimated 10.4 billion barrels of oil there. Some geologists say the area could hold 30 billion barrels, but only drilling will tell.

MMS OCS estimates

In a 2002 presentation the U.S. Minerals Management Service reported an estimated mean of 6.94 billion barrels of conventionally recoverable oil and natural gas liquids, and 32.07 tcf of conventionally recoverable natural gas under the outer continental shelf of the Beaufort Sea.

Add up all these estimates for northern Alaska and you obtain volumes of nearly 32 billion barrels of oil and more than 142 tcf of natural gas for the region. The gas figure doesn’t include unconventional sources such as gas hydrates and coalbed methane — there may be as much as 519 tcf of additional gas in gas hydrates beneath the permafrost of northern Alaska. And then there’s the Chukchi Sea with possibly 15 billion barrels of conventionally recoverable oil and 60 tcf of conventionally recoverable natural gas, according to an MMS assessment.

The 2005 USGS estimates for the central North Slope do not include billions of barrels of reserves in producing oil fields in northern Alaska, such as Prudhoe, Kuparuk and Alpine.

And these estimates take into account only a tiny portion of the huge viscous (heavy) oil resource identified by North Slope producers.

And then there’s viscous oil

According to the U.S. Department of Energy, the heavy oil formations overlying the two largest oil fields on Alaska’s North Slope, Prudhoe and Kuparuk, hold as much as 36 billion barrels of original-oil-in-place. Field operators BP and ConocoPhillips put the resource at 23 billion barrels — 20 to 22 percent of that recoverable with the best of today’s technology.

The companies continue to invest in technology that will increase those percentages. Heavy oil, they say, could surpass the combined total of conventional oil in Prudhoe and Kuparuk, the two largest oil fields in North America.

Last year BP Exploration (Alaska) President Steve Marshall referred to the North Slope’s heavy oil resource as a “world-scale” opportunity, noting that the Canadians are starting to achieve 50 percent recoveries “and if we can do that … that’s twice the USGS estimate for what ANWR could hold.”

Their estimates might differ, but they all agree it is a worthy target for extraction, especially since the West Sak-Schrader Bluff and Ugnu heavy oil formations are within the boundaries of existing infrastructure.

Heavy oil production made up between 75,000 and 85,000 of the 913,000 barrels of oil per day produced from the North Slope in FY 2005.

So how much recoverable oil and gas is left in northern Alaska’s pot?

The answer likely lies in the 50-60 billion barrel range for oil, depending on technology, and in excess of 200 tcf for natural gas, excluding gas hydrates.

But answering that question is only a little easier than searching for a pot of gold at the end of a rainbow because explorers are constrained by access issues of all types, including political, technological challenges and cost constraints.



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