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Vol. 22, No. 53 Week of December 31, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Upping of estimates

Interior publishes new oil & gas assessments for NPR-A & Beaufort Sea

Alan Bailey

Petroleum News

The U.S. Department of the Interior has announced the release of new assessments of technically recoverable undiscovered oil and gas resources in the National Petroleum Reserve-Alaska and the Beaufort Sea outer continental shelf. Based on a re-evaluation of the resource potential of the Nanushuk and Torok formations, the rock units associated with major recent oil discoveries in the region, the assessments indicate a much higher oil and gas potential in the region than previously thought.

Dramatic uptick

Essentially, the government scientists have re-assessed the potential of the Nanushuk and Torok, while leaving the assessments for other rock units unaltered from assessments conducted in earlier years. However, given that the last assessment for the NPR-A, published in 2010, indicated a relatively low volume of undiscovered oil, the new assessment represents a particularly dramatic uptick in the expectations for oil resources in the reserve. In the Beaufort Sea, while the new assessment indicates a major increase in expectations for oil in the Nanushuk and Torok plays in the more western sector of the region, these plays represent only around 10 percent of the total resource expectation for the Beaufort Sea as a whole. Thus, the impact of the new assessment on the total estimated oil and gas resource for the Beaufort Sea is rather more modest than the impact of the new NPR-A assessment on expectations for that region.

In addition to new insights into the petroleum geology as a result of major oil finds in the Nanushuk and Torok, the new assessments have gained from access to new high-resolution 3-D seismic data. The data have enabled the identification of subtle potential oil and gas traps in the subsurface. However, as indicated by a wide range of possible oil and gas volumes, there is considerable uncertainty over how much hydrocarbon resource may actually exist undiscovered. And, given the absence of modern seismic data for the Beaufort Sea in the area of the Nanushuk and Torok plays, the scientists in the Bureau of Ocean Energy Management had to use onshore seismic to infer the potential distribution of prospects in the offshore.

The Nanushuk and Torok are in the Brookian sequence, the youngest and shallowest of the Arctic Alaska petroleum bearing rock sequences.

The revised estimates

For the NPR-A, U.S. Geological Survey scientists now think that there may be anywhere from 1.7 billion barrels to 21.8 billion barrels of undiscovered, technically recoverable oil, with a mean estimate of 8.8 billion barrels. The corresponding figures for natural gas are 5.5 trillion cubic feet to 112.9 tcf, with a mean of 28.2 tcf. The last assessment, published in 2010, indicated a mean oil resource of 896 million barrels and a mean gas resource of around 53 tcf. The fall in the estimated gas volume results primarily from the dropping of some Brookian plays that had been thought to hold much gas.

The NPR-A assessment also suggests the possibility of 50 million to 1,439 million barrels of technically recoverable, undiscovered natural gas liquids in the reserve.

The new assessment for the Beaufort Sea, prepared by BOEM and involving a re-assessment of the western part of the region, suggests 4.4 billion to 15.4 billion barrels of undiscovered, technically recoverable oil, with a mean of 8.9 billion barrels. Estimated natural gas resources range from 14.3 tcf to 42.2 tcf, with a mean of 27.7 tcf. The estimated mean volume of oil in the Nanushuk play has increased from 475 million barrels to 1.2 billion barrels.

BOEM’s comparison between its new assessment and the previous assessment for the Beaufort Sea, published in 2006, is expressed in terms of barrels of oil equivalent, a parameter that combines both oil and natural gas in energy equivalent terms. The boe estimate for the Nanushuk and Torok combined has increased from 693 million boe to 1,389 million boe, while the estimate for the Beaufort Sea as a whole has increased from 13,142 million boe to 13,838 million boe.

Administration’s energy focus

The new assessments follow an order issued in May by Interior Secretary Ryan Zinke, requiring the development of a new activity plan for the NPR-A and new oil and gas assessments for Arctic Alaska. The order reflected the Trump administration’s focus on energy development and a view that Alaska is critical to achieving U.S. energy dominance. On Dec. 22 Zinke commented on the significance of the new oil and gas assessments.

“Earlier this year I visited the North Slope to talk with Alaska Natives and elected officials about what responsible energy development means for the communities and the state. The response was overwhelmingly positive and the message was clear: the path to American energy dominance starts in Alaska,” Zinke said. “Today’s updated assessment is a big step toward that goal. Thanks to the incredible work of scientists at the USGS and BOEM, we know what’s available and what our potential is.”

“Just as we have always known, this assessment shows that the NPR-A has significant potential and will remain a big part of our energy future,” said U.S. Sen. Lisa Murkowski, R-Alaska. “I thank Secretary Zinke for traveling to this area with me earlier this year, for directing USGS to update its resource assessment, and for working with Alaskans on a better plan for responsible development.”

“A frontier to many, Alaska’s North Slope is our home; It is rich with potential,” said Richard Glenn, Arctic Slope Regional Corp. executive vice president of lands and natural resources. “Any good land use and resource exploration decisions require the best available subsurface data and interpretation. I commend our colleagues on the USGS team for taking up this effort.”

Six new plays

The new USGS assessment for NPR-A involves six new Nanushuk and Torok plays or assessment units. Each of the two formations is divided into three assessment units, based on different regions of the NPR-A: regions in the northeast, northwest and south. Together the two formations form a massive wedge of sediment deposited in an ancient deepwater basin. The Torok, the older of the two formations, tended to be deposited on the floor of the basin and on the basin-side slope. The sands of the Nanushuk tended to be deposited in shallow water and were derived from geographic features such as ancient river deltas.

In the more northern part of the NPR-A oil pools tend to be captured in what are termed stratigraphic traps, trapping situations resulting from the juxtaposition of different sediments, based on the manner in which the sediments were deposited. Modern 3-D seismic data are proving particularly effective in locating this type of trap. The USGS scientists distinguished between western and eastern assessment units in the north, in recognition that the geometry of the basin margin to the west appears less favorable for trap formation than in the east.

In the more southerly part of the NPR-A, large scale folds and faults in the Brookian strata support the likelihood of hydrocarbons being held in structural traps, traps formed as a consequence of the folding and faulting. Moreover, in this region the thermal history of the rocks appears more conducive to the formation of natural gas than oil. Hence the recognition of distinct assessment units in both the Nanushuk and the Torok to the south.

However, the known existence of a significant oil pool in the Brookian at Umiat, on the border of the northern and southern regions, does demonstrate the potential for finding oil in a structural trap towards the south.

Offshore plays

BOEM’s Beaufort Sea assessment involved a new evaluation of two plays in the western part of the Beaufort Sea planning area: the Nanushuk topset clinothem and the Torok turbidite clinothem plays.

The upgrade of BOEM’s expectations for oil resources in the Nanushuk stemmed in particular from new major discoveries of light oil at Willow and Pikka, onshore in the northeastern NPR-A and to the east of the Colville River delta. The use of onshore prospect distributions identified from 3-D seismic data as an analogy with what may be found offshore has significantly upped the number of prospects estimated to exist in both the Nanushuk and the Torok in the offshore. On the other hand, the agency scientists have somewhat downplayed the potential of the Torok, given a reduction in the anticipated oil recovery from the Torok in the Nanuq satellite field in the onshore Colville River unit, the new assessment says,

The dominant hydrocarbon play in the Beaufort Sea outer continental shelf remains what is referred to as the Brookian foldbelt play, a play that may hold anywhere up to 7.6 billion barrels of oil, with a mean estimate of 2.9 billion barrels, the new Beaufort Sea assessment says.

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