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Vol. 22, No. 3 Week of January 15, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Producing Prudhoe

2016 production levels out; BP credits targeted, precision drilling

TIM BRADNER

For Petroleum News

BP held Prudhoe Bay field production virtually flat in 2016, a sharp improvement over annual declines averaging 4 percent to 6 percent in years past, company officials said in an interview.

Prudhoe is the largest field on Alaska’s North Slope and the leveling of its production was a major factor helping Alyeska Pipeline Service Co. actually boost throughput in the Trans Alaska Pipeline System by 1.85 percent last year, the first increase in decades for TAPS.

Alyeska confirmed Jan. 9 that total Slope production ticked up to an average of 517,868 barrels per day, up from an average of 508,446 barrels per day in 2015.

Prudhoe Bay’s production for 2016 was slightly down but by less than 1 percent. The field averaged 280,700 barrels per day last year compared with 281,800 barrels per day the prior year. Prudhoe produces about half of the oil moving through TAPS.

The surprise at Prudhoe, however, was that BP was able to virtually halt the field decline while also laying off rigs during 2016, a consequence of low oil prices, said Scott Digert, BP’s Eastern Prudhoe Bay reservoir manager.

“We were able to meet our 2016 production goals, despite being down two rigs for much of the year,” Digert said.

State Oil and Gas Division Director Chantal Walsh credited the Slope production performance to a number of factors including better-than-expected output of ConocoPhillips-operated CD-5, a new production site near the Alpine field, production from Drill Site 2S in Kuparuk, also by ConocoPhillips, and a coiled-tubing drilling program in Milne Point by Hilcorp Alaska.

Prudhoe got the benefit of major maintenance projects by BP in 2014 and 2015, she said.

Kara Moriarty president of the Alaska Oil and Gas Association, gave credit to, “a lot of work and investment by oil producers on the Slope to move more oil out of both new fields and legacy fields.”

“It’s also proof that a competitive tax policy can reverse production decline, even during periods of low oil prices. Last year’s production increase didn’t just happen by accident,” she said.

The 2016 bump benefitted from several years of intense field activity triggered by the Legislature’s passage of Senate Bill 21, a major overhaul of state oil and gas taxes, in 2013.

Prolific wells

BP went from five to two rigs in Prudhoe but also “high-graded” its drilling opportunities, picking the priorities carefully, Digert said in an interview. The new wells that were drilled, which were in several different parts of the Prudhoe Bay unit, were more prolific than had been expected, he said.

These wells were in separate reservoirs in the Prudhoe Bay unit including the Lisburne, Niakuk and Point McIntyre reservoirs, where there were small, untapped pools. There were also targets in the main Prudhoe formation, known as the Ivishak, particularly in lower sections that have been isolated by shale barriers, Digert said.

Alan Mitchell, BP’s Western Prudhoe Bay reservoir manager, said the company was also tapping into the smaller Sag River formation, which overlies the main Prudhoe Ivishak reservoir.

In many cases the Sag River was tapped by installing new perforations in older wells that had been drilled down to the deeper Ivishak, but there are also some new wells drilled to the Sag River.

Wells were also drilled to reach pockets of untapped oil at the bottom of the Ivishak that had been isolated by shale barriers. “This is good oil but the rock has low permeability,” Digert said, referring to the permeability, or connections, of pore spaces in the rock that allow hydrocarbon fluids to flow.

Precision drilling

This also required precision drilling of long horizontal wells through reservoir sections only 30 feet thick in some cases, Digert said.

Some of these wells were also “tipped up” at their end to penetrate oil reservoir sections with higher gas ratios which brought gas-rich oil into the well, helping move other oil.

Many of the wells were also “sidetracks,” or new wells drilled from the bores of older wells. These can be done with coil-tubing drill units instead of the big rotary wells, which are more costly.

BP also doubled down on well work and upgrades to surface facilities that did not require a rig. “There were a lot of opportunities for upgrades at the surface, such as to flow lines, which made production more efficient,” Digert said.

Prudhoe’s decline will likely resume in 2017 partly because major “turnaround” or maintenance projects are planned at field production facilities that will take the plants off-line for periods during the summer, Digert said. Slope production normally is impacted during summer turnarounds.

Despite the increased productivity, the major Slope producers are still operating in the red. Janet Weiss, BP’s Alaska president, told an Alaska industry conference in November that BP was operating at a $1.5 million-a-day loss in Alaska.

ConocoPhillips spokeswoman Natalie Lowman said that her company was similarly in an operating loss position through the first three quarters of 2016 in spite of good performance at CD-5 and other ConocoPhillips-operated Alaska properties. Fourth quarter results are expected out in the near future, Lowman said.

12.5 billion barrels

To date Prudhoe has produced about 12.5 billion barrels compared with the original estimate of recovery of 9.6 billion barrels when the field started up in 1977. The improvements came through a combination of greatly expanded gas cycling and gas reinjection capacity, innovations in drilling, with new types of wells like “multi-lateral” wells, where several new wells are drilled off an older well bore to the surface, and sidetracks drilled with coil-tubing units. There were also new developments in enhanced oil recovery and pressure-maintenance projects, like an innovative project to inject seawater into Prudhoe’s gas cap to maintain pressure.

Many of these were first developed on the North Slope, and some have been exported to be applied elsewhere in the world.

The field still has a lot more oil that can be produced, as well as the gas.

Prudhoe’s wells today average 400 to 500 barrels per day, although there are still good ones that produce 3,000 to 4,000 barrels per day. But it’s a far cry from the early days when Prudhoe wells typically produced 10,000 barrels a day, and the best wells could achieve rates of 50,000 barrels per day.



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