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Vol. 11, No. 35 Week of August 27, 2006
Providing coverage of Alaska and northern Canada's oil and gas industry

No reservoir damage

AOGCC: no harm from one-time shutdown of Prudhoe eastern operating area

By Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission does not expect damage to the Prudhoe Bay reservoir from the Aug. 6 shutdown of the eastern operating area.

“We’ve asked ourselves what risks might there be to this very important reservoir … as a result of a rather abrupt shutdown. And at this time we see no evidence a one-time, temporary shutdown of oil production from the eastern operating area of the Prudhoe Bay reservoir will damage that reservoir,” commission Chairman John Norman said Aug. 18. However, Norman cautioned, if shutdowns become “a repetitious pattern or cycle then certainly it’s going to become problematic.”

Norman told a joint meeting of the Alaska Legislature’s House and Senate Resources committees that field operator BP Exploration (Alaska) has told the commission they “plan to continue waterflood and gas cap injections into the reservoir and we see that as being beneficial because it will allow pressure to be maintained and indeed build up during this period.”

That continued injection should result in a period of higher production rates when wells are brought back online, he said.

Commissioner Cathy Foerster said the operator “has very sophisticated predictive tools” for forecasting production and the state uses production data it gets from the operator to develop its own predictive tools. The state can compare what it has predicted with actual volumes: “the one line is the forecast that we would have seen … would have predicted had there been no shut-in and the other line is the actual which will be what we see given the shut-in. So using those two lines, we can compare to see if the loses are recovered,” she said.

Gas sales another potential risk

Norman told legislators that while it is possible that one or more wells may not come back at the same production as before the shut-in, “we don’t think that that will result in any decrease in ultimate recovery because other wells can be used to access and … produce these same reserves” or the operator can do workovers on wells as needed.

The commission believes, Norman said, that another potential risk to ultimate recovery from the reservoir “relates to the timing synergies of oil production and gas pipeline startup.” Producing gas for sale from the reservoir while there is still oil to be produced will put ultimate oil recovery “at risk,” he said. Because “gas represents energy in the reservoir … the more oil that can be recovered before beginning major gas sales from the reservoir, the less oil then is at risk when large-scale gas off-take actually begins in the future.”

Because the shutdown delays oil production in relation to future gas sales it “could possibly have some negative impact upon total ultimate recovery.”

He said he thinks that when the dust settles “the greatest harm is going to be done to perception, particularly by those not in Alaska.”

Rep. Ralph Samuels, R-Anchorage, asked if the shutdown could result in a steeper production decline curve, once production is restored, and Foerster said the commission would not expect that.

Samuels asked how the commission would know when production has equalized out to what it would have been.

Norman said there is “pretty extensive modeling going on now of the entire reservoir” and said the commission can project trend lines which ignore the shutdown and then superimpose production resulting from the shutdown, look at the differences and draw some conclusions.

“I don’t know that we’ll ever know absolutely, but I think that we’ll be able to come in with some level of scientific and engineering confidence and say this is where we would have been but for this event and this is where we are because of this event,” he said.

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