With a major gas sale from Alaska’s North Slope on everyone’s wish list, the Alaska Oil and Gas Conservation Commission is revisiting what an allowable offtake rate would be from Prudhoe Bay.
In a study completed late last year, commission staff concluded that a major gas sale would add some 4 billion barrels of oil equivalent to Prudhoe Bay recovery based on the known 24 trillion cubic feet of natural gas at the field, but also concluded there was insufficient evidence to recommend increasing the offtake rate at this time.
The commission sets gas offtake rates under its charge to promote greater ultimate recovery and prevent waste of hydrocarbon resources in the state. In 1977, at the startup of production, it set a maximum gas offtake rate of 2.7 billion cubic feet per day from the Prudhoe oil pool, well below the 4.5 bcf a day that has been discussed recently for a natural gas pipeline from the North Slope.
Gas offtake is an important issue at Prudhoe Bay because it’s an oil field.
Gas extraction lowers reservoir pressure, decreasing the energy required for oil production and oil recovery suffers, commission senior reservoir engineer Jane Williamson said in a Feb. 28 public summary of the Prudhoe oil pool offtake study. Gas is produced at Prudhoe along with the oil and the bulk of the gas is reinjected to maintain reservoir pressure and increase oil production.
While the commission has not received an application to alter its 1977 gas offtake rule, it is trying to position itself so that it is not a holdup when there is a major North Slope gas sale, commission Chair John Norman said at the public meeting.
The commission then went into executive session to hear details of the study from Frank Blaskovich, a consulting reservoir engineer who worked with commission staff on the study. They used information provided by the Prudhoe Bay working interest owners under a confidentiality agreement. The commission has said in the past that when it holds a public hearing on changing the gas offtake rate, it will require that enough information be put on the public record to support its decision.
Study done in 2006With the North Slope producers and the State of Alaska working on a project for gas sales from Prudhoe Bay and Point Thomson, the commission held hearings and in late 2005 concluded there was a need to revisit the offtake rate question.
The 1977 decision was made “without benefit of production history,” Williamson said in a Feb. 28 memo to the commission. The decision needed to be revisited “in light of several decades of reservoir development and information that has become available since 1977,” she said.
The 2006 study was done with the Prudhoe working-interest-owner full-field reservoir simulator, with a range of runs from no gas sales to rates of 1 bcf to 5.6 bcf per day. Williamson told the commission that the majority of some 130 runs involved offtake rates of 2.3 bcf to 4.3 bcf a day, with gas sale startup times ranging from 2015 to 2024. “Some simulation cases were run to test the impact of other factors such as changes in waterflood operation, fuel usage, CO2 offtake and some drilling/workover variations,” Williams said, as well as the effect of different assumptions about the end of field life, when costs exceed the value of production.
Comparisons were made based on barrel of oil equivalent to allow comparison of total energy content and the study concluded that a major gas sale would add some 4 billion barrels of oil equivalent to recovery; 11.4 billion barrels of oil, condensate and natural gas liquids have been produced to date. In 1977 the projection of total recovery from Prudhoe was less than 9 billion barrels of oil, an assumption which included gas sales beginning in 1981 and a 2003 estimated end of field life.
Strategy: increase oil captureWilliamson said the study concentrated on trends and was not looking for a single optimum development strategy.
Results showed that the most promising strategy was to increase oil capture prior to the beginning of gas sales, a strategy which the study found “can increase hydrocarbon recovery and result in recovery trends that are less sensitive to either gas offtake rates or gas sales startup dates.”
“This was the only mitigation option evaluated that significantly improved trends in BOE recovery,” Williamson said.
In the public summary of the report Williamson said that at this time there is insufficient evidence to recommend increasing the offtake rate established in 1977, but said the Prudhoe owners should be required to do depletion planning prior to committing to selling gas. Pre-major gas sales strategies should include: increasing oil capture prior to major gas sales and minimizing well and facility downtime. She also said a mechanism is needed for the commission and the working interest owners to exchange information during the depletion planning stage.