North Slope oil production is running above last year based on new data from the Alaska Department of Revenue. Based on preliminary information, production from the Slope has averaged 527,000 barrels per day for the state’s fiscal year 2017, the budget year that ended June 30.
“It’s definitely a year-over-year increase,” said Dan Stickel, chief petroleum economist at the revenue department.
The figures are up from a 514,900 bpd average for FY 2016, the 12-month period which ended June 30, 2016, and 501,000 bpd for the previous year, FY 2015.
The FY 2017 increase would be the second year in which output climbed for the North Slope, and it appears to have ended, at least temporarily, a long slide in Slope production, which was at 2 million bpd in 1988.
How long it can be sustained is uncertain, however. Although crude oil prices are down, North Slope operators are still getting the benefit of new projects begun during high price years in 2014 and 2015, state officials said.
Prudhoe the driver
Some of these are producing above expectations, such as ConocoPhillips’ CD-5 project near the Alpine field. Most of what is driving the increase, however, is superior performance at the BP-operated Prudhoe Bay field, which supplies about half of total North Slope production.
“Prudhoe’s production so far in 2017 is comparable to 2016’s yearly average of 280 mbopd, and much better than the expected 2017 average,” said Scott Digert, one of BP’s reservoir development managers for the field.
If the trend holds Digert is cautiously optimistic BP may be able to hold Prudhoe’s production essentially flat in 2017, for a third year in a row. Digert spoke in an interview.
In previous years decline rates of 4 percent to 6 percent were common for Prudhoe and other North Slope fields. In 2016 BP held production with less than 1 percent decline, Digert said.
What’s unusual is that BP has been able to hold up Prudhoe’s production despite having to lay off drill rigs and reducing the drilling of new production wells and rig-assisted workovers on wells in 2017, a response to lower oil prices.
‘Smart’ technologies
Much is this is being accomplished through the use of new “smart” technologies and information systems.
Three years ago BP had five rigs at work in Prudhoe. That is now down to two.
Typically, drilling new production wells is a common way for field operators to maintain production, along with waterflood and enhanced oil production, but at Prudhoe BP has been able to sustain output with less drilling through very careful management of wells and facilities in the field. Drilling of new wells, when they are drilled, are in places that are more productive.
“We’ve been able to accomplish a lot by focusing on operating efficiencies and maximizing the use of facilities and wells, and doing it safely. It’s the sum total of a lot of little things, like improving the reliability of our surface production equipment,” Digert said in an interview.
“For example, the overall field is operating at an 85 percent efficiency compared with a historical average of 82 percent,” he said.
40 years of operating data
This is facilitated by having 40 years of operating data at Prudhoe, which began production in 1977. “We have all of that available to us as well as new computer technology that allows us to analyze trends and do a better job of prediction. It’s the use of ‘Big Data’ analysis with a large pool of information,” Digert said.
The bottom line is that BP has more wells on line and less wells and equipment down for maintenance at Prudhoe, despite the aging of the field. “We have about 50 to 60 more wells on line this year compared with last year which gives us a lot more capacity,” Digert said.
Typically about 650 to 680 wells are needed online to fill the facilities and maintain Prudhoe’s production, and field operators like to have 700 wells available so a few can be taken off-line to “recharge” with oil and to reduce gas or water which is used to drive production.
“It is typical to have a number of wells temporarily shut-in, or idled, in a large, mature field like Prudhoe. Now the operators like to have a large pool of operating wells, up to 800 this year, they can call on to make up production,” Digert said. This greatly increases the operators’ options and flexibility, he said.
New seismic
What is also helping at Prudhoe is new three-dimensional seismic done over northern parts of the field that now helps BP spot small pockets of oil bypassed in earlier production.
Being smart about where to place wells that are drilled, mainly in underdeveloped parts of Prudhoe, has been a very productive strategy. In its drilling in the main part of the field BP has also found it is largely accelerating production of reserves in place, oil that would be produced anyway from nearby wells. The new wells are carefully targeted at getting “new” oil that wouldn’t be otherwise produced.
