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Vol. 10, No. 14 Week of April 03, 2005
Providing coverage of Alaska and northern Canada's oil and gas industry

Exploration heads north of Barrow Arch

Shell and ConocoPhillips purchase leases well to the north of the traditional North Slope exploration plays at MMS OCS sale

Alan Bailey

Petroleum News Contributing Writer

Does the MMS Beaufort Sea lease sale held on March 30 signal the beginning of a new era for the Alaska oil and gas industry?

Traditional exploration plays in northern Alaska have tended to focus on a structural high called the Barrow Arch that runs approximately along the Beaufort Sea coast. Fields like Prudhoe Bay and Endicott lie on the Arch in a rock sequence known as the Ellesmerian. Other fields like Kuparuk River and Alpine lie in another sequence known as the Beaufortian. The Ellesmerian sequence consists of strata ranging in age from Devonian to Jurassic, while the Beaufortian sequence ranges from Jurassic to early Cretaceous.

Pioneering exploration needed

Ken Boyd, an oil and gas consultant and former state Division of Oil and Gas director, told Petroleum News that someone needs to pioneer new exploration north of the Barrow Arch. Boyd thinks that offshore areas such as the Beaufort and Chukchi Seas present the best potential for major new oil finds in northern Alaska.

Shell may be looking to do exactly this type of pioneering exploration. At the MMS sale the company purchased swathes of leases along a trend stretching east from Harrison Bay to an area north of the Arctic National Wildlife Refuge. These leases lie well north of the Barrow Arch in an area where a relatively young rock sequence known as the Brookian dominates the geology.

The Brookian consists of sediments that eroded from the Brooks Range during Cretaceous and Tertiary times. The sediments spilled out over the North Slope and onto the Beaufort Sea continental shelf. North Slope fields such as Tarn, Meltwater and Tabasco have Brookian reservoirs.

Brookian plays

Susan Banet, an MMS supervisory geologist, told Petroleum News that most of the new Shell leases appear to be on Brookian plays. The leases include the 100 million to 200 million barrel Hammerhead field and the 160 million to 300 million barrel Kuvlum Field. These fields were discovered from drilling in 1986 and 1992 and have reservoirs in Brookian fault blocks.

Shell made its biggest bid of $12,220,173 for the block containing Hammerhead.

Shell also purchased leases on the prospective Camden anticline, a major structure in Tertiary Brookian strata north of ANWR.

There’s a cluster of intriguing Shell leases at the extreme east end of the sale area. These leases appear to lie in the Brooks Range fold and thrust belt, where the target plays are unclear and could involve several different rock sequences.

“That’s a big question mark,” Banet said.

ConocoPhillips picks up leases to the west

ConocoPhillips picked up some leases in what appear to be Brookian plays, at the west end of the sale area, some distance offshore northeast of Dease Inlet. These leases occur in an area where a series of hinge-line faults slice through Brookian strata. The faults mark the transition from the continental shelf to the continental slope of the Arctic Ocean.

“They would be the Brookian faulted western either topset or turbidite (play),” MMS geophysicist Peter Johnson said.

ConocoPhillips has also purchased blocks around the Brookian McCovey prospect near Beechey Point. It’s not clear whether ConocoPhillips plans to explore the McCovey play but the leases are too far north for a classic Barrow Arch play.

“It would not be any of the traditional Ellesmerian — that type (of play),” Banet said. “It’s too far out.”

Armstrong, the other main bidder at the lease sale, picked up a substantial group of blocks in Harrison Bay. The new Armstrong leases form an extension of the company’s acreage northwest of the Kuparuk River Unit. Armstrong probably wants to consolidate its exploration position, looking for the more traditional Barrow Arch plays, a state geologist told Petroleum News after the sale.

Bringing new technology offshore

Compared to the south side of the Barrow Arch the north side has not had the benefit of the newest technology. “Some 3D seismic has been shot, but the offshore begs to have more — and more modern — data. New technology doesn’t make better rocks but it will certainly help sort out the complexities in this underexplored part of Alaska. Having an experienced explorer like Shell at the helm doesn’t hurt either,” Boyd said.

Risks and rewards

With promising geology but very sparse well data, exploring north of the Barrow Arch involves significant risk but major potential. Problems in BP’s Badami field illustrate the technical risks — Badami’s reservoir is in a Brookian stratigraphic trap. However, several fields in the Brookian have proved successful.

“These Brookian reservoirs work in some places like Tarn and Meltwater but they don’t work everywhere,” Boyd said.

It’s all a voyage into the unknown.

“The offshore is as unknown as the onshore 20 years ago,” Boyd said.

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