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Vol. 16, No. 19 Week of May 08, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Fortune Hunt Alaska: Exploring off the beaten path

A glimpse into the potential of the future: A review of Alaska’s nonproducing oil and gas basins

Alan Bailey & Kay Cashman

Petroleum News

Although this publication focuses on oil and gas opportunities in the proven geologic basins of the North Slope and Cook Inlet, there are other Alaska nonproducing basins with the potential for natural gas, and in some cases oil.

Geologist Robert Swenson, director of Alaska’s Division of Geological and Geophysical Surveys, or DGGS, recently gave an overview of some of these less known basins and their resource potential.

Alaska, Swenson explained, is traversed by several major geologic faults. The relative movement of rocks on either side of these faults has thrown up mountains in some areas, while causing other areas to sink into low-lying basins. Erosion of the mountains has caused sand and gravel to flow as sediment into the basins.

The basins formed in this way are Tertiary in age and generally contain non-marine sediments — sediments consisting of sands, gravels and shales laid down from ancient rivers and lakes. Coal seams interspersed with these sediments have formed from rotting and compressed vegetation. And bacteria feeding on that rotting organic material have created methane, the primary component of natural gas, with that gas becoming adsorbed onto the coal.

If stresses in the Earth’s crust cause folding and uplift of the coal seams, the resulting drop in pressure in the coal can release the gas into sandstone reservoir rocks to form gas fields, Swenson said. The Cook Inlet basin, with its prolific gas fields, is a Tertiary basin of this type.

For oil and gas to be formed from the cooking of organic material, as distinct from the formation of gas from bacterial action, the organic material needs to be heated to an appropriate temperature.

And, given the rate at which the subsurface temperature increases with depth in Alaska, the organic material would need to be buried to depths of 18,000 to 20,000 feet for the material to become hot enough for oil and gas to be generated. Since there are relatively few places in the Alaska Tertiary basins where these depths are attained, geologists consider the basins to be generally gas-prone.

The oil in Cook Inlet basin has flowed into Tertiary sandstone reservoirs from older, deeper Mesozoic source rocks.

Nenana basin

The 8,500-square-mile Nenana basin, 50 miles southwest of Fairbanks, is a classic Tertiary basin in Interior Alaska. Thick coal seams and sandstone strata exposed at the surface near Healy, on the north side of the Alaska Range, demonstrate the potential for finding gas resources in the basin.

“This is exactly what you want to see from an exploration standpoint,” Swenson said. “The coals are what are going to be generating the gas. The sands are what are going to be actually reservoiring that gas.”

The basin attains depths of around 18,000 feet in its deepest parts, thus possibly putting some of the deeper rock strata into temperatures where oil might be generated, Swenson said. However, the basin is thought to be primarily gas prone.

A group of companies, including Native regional corporation Doyon Corp., is engaged in exploration of the Nenana basin and drilled one well in the basin in 2009, which did not encounter a commercial gas accumulation, and is currently planning a seismic survey in the northern part of the basin.

Yukon Flats, Susitna

The relatively large, 15,000-square-mile Yukon Flats basin, north of Fairbanks, is another classic Alaska Tertiary basin. With a typical Tertiary rock sequence of sandstones and coals, and with depths up to 23,000 feet, this basin has a fair amount of oil and gas potential, Swenson said. There is industry interest in the basin, he said (editor’s note: Doyon has been spearheading efforts to attract explorers).

The Susitna basin, to the north of Anchorage and separated from the Cook Inlet basin by a major geologic fault actually consists of two smaller basins — a major basin within the main sweep of lowlands around the Susitna River, and a minor basin to the northwest, near the village of Skwentna. With Tertiary strata having a maximum thickness of 15,000 feet in the major basin, the basin lacks sufficient depth for likely oil generation and probably holds just gas. The older Tertiary strata that host oil in the nearby Cook Inlet basin appear to be missing in the Susitna basin, and no one has yet found evidence of a viable oil source rock in the area, Swenson said.

With two wells drilled some years ago and just some 1960s era seismic data available, exploration of the basin has been very limited.

Cook Inlet Energy LLC currently operates a state exploration license in the Susitna basin. Given the proximity of the basin to the Alaska Railbelt, DGGS is doing a detailed study of the basin’s petroleum geology.

The Copper River basin around the town of Glennallen, is large, but relatively shallow, containing only about 3,000 feet of Tertiary strata. But in the western part of the basin these strata are similar to the marine Mesozoic rocks that generated oil in Cook Inlet basin, Swenson said. Some drilling has occurred.

Bering Sea

In addition to onshore basins, there are several large, similar Tertiary basins under the waters of the Bering Sea, on the relatively shallow Bering Sea shelf.

The Bering Sea basins include Norton basin, under the Norton Sound, and Hope basin, to the northwest of Kotzebue.

The existence of complex geologic structures, especially large geologic faults, in Norton basin has given rise to a number of potential plays, producing some exploration interest, Swenson said. The basin contains up to 23,000 feet of Tertiary stratigraphy.

ARCO drilled two stratigraphic test wells there in 1980 and 1982, and the federal government leased 59 tracts in the basin following a March 1983 lease sale. Companies drilled six exploration wells in the mid-1980s, with all of the wells indicating the presence of natural gas; one or two had weak oil shows.

The former U.S. Minerals Management Service, or MMS, assessed the possibility of finding up to 1.6 trillion cubic feet of gas in the basin.

Navarin basin

The largest and most remote of the Bering Sea basins is the 32,000-square-mile, 36,000-foot-deep Navarin basin, 350 miles west of the Yukon-Kuskokwim Delta. One stratigraphic test well and eight exploration wells have been drilled in this basin, finding gas shows and, in the lower part of the Tertiary section, the limited existence of oil-prone source rocks. The wells found seven potential oil and gas reservoir rock units in the Tertiary, Swenson said.

MMS assessed the possibility of 500 million barrels of oil and six trillion cubic feet of natural gas in the basin, but the area would be very expensive to explore and develop, Swenson said.

Another Bering Sea basin, North Aleutian (Bristol Bay), has high oil and gas potential and has been the subject of exploration in the past (editor’s note: the basin is now subject to a lease sale moratorium, ordered by President Obama in March 2010).

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