Hilcorp Alaska LLC has officially submitted its development plan for Liberty.
The U.S. Bureau of Ocean Energy Management said Sept. 18 that the independent oil company had submitted a completed plan to develop the offshore oil field in the federal waters of the Beaufort Sea. The distinction formally starts a 60-day review period.
While Hilcorp actually filed the “development and production plan,” or DPP, with the federal agency in the final days of 2014, federal guidelines require a preliminary review to determine that a plan has met the basic eligibility requirements for consideration. In a general, a DPP describes proposed well and infrastructure locations, drilling methods, a projected timeline for activities and impacts on both onshore and offshore resources.
“BOEM will conduct a rigorous evaluation of this DPP, recognizing the significant environmental, social and ecological resources in the region and honoring our responsibility to protect this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives,” BOEM Director Abigail Ross Hopper said in a statement. “Any activity proposed offshore Alaska is scrutinized using the highest safety, environmental protection, and emergency response standards.”
The federal agency is taking comments on the DPP through Nov. 17.
Before the Bureau of Ocean Energy Management can approve, deny or request modifications of the DPP, it must prepare an environmental impact statement for the development program Hilcorp is proposing for Liberty. The federal agency said it intended the issue a notice of intent to prepare an EIS Sept. 25, after Petroleum News went to print. According to the agency, the EIS will likely take “several years” to prepare and “will be closely coordinated with numerous federal and state agencies and consultations with appropriate federally recognized tribes.”
Gravel island
Hilcorp is proposing to develop the Liberty prospect from an artificial 9.3-acre gravel island constructed in 19 feet of water some 5 miles off the North Slope coast.
A revised version of the plan from September 2015 describes a project capable of processing and exporting between 60,000 and 70,000 barrels of oil per day. The island would have slots for 16 wells, with the expectation of drilling five to eight production wells, four to six injection wells and as many as two disposal wells at 15-foot intervals.
While natural gas would be used for field activities and reinjection, oil would be shipped through a new 12-inch pipeline to the existing Badami Sales Oil Pipeline. The new pipeline would be approximately 7.1 miles long, of which 5.6 miles would be offshore.
In its plan, Hilcorp described Liberty as the “largest delineated but undeveloped light oil reservoir on the North Slope,” capable of producing between 80 million and 150 million barrels over a 15- to 20-year field life and reaching peak production within two years.
Another attempt
Shell Oil Co. discovered the Liberty field between 1982 and 1987, through a four-well delineation campaign into the Kekiktuk formation from Tern Island and Goose Island.
BP Exploration (Alaska) Inc. acquired tract OCS-Y1650 in a September 1996 federal lease sale and began permitting the Liberty No. 1 exploration well. The company drilled the well in February 1997 later confirmed a 120 million barrel discovery at the field.
The company submitted a DPP to the U.S. Minerals Management Service, BOEM’s predecessor, in February 1998 calling for an offshore gravel island but suspended the project in July 2001. After several years of additional study, BP proposed a new plan in August 2005. The ambitious plan would have used ultra-extended-reach drilling to reach the reservoir from an onshore pad at the satellite drilling island on the Endicott causeway. The idea was to harness recent advances in drilling technology to avoid the potential environmental impacts of an island.
With federal approval of the proposal, BP expanded the Endicott facilities and commissioned a drilling rig, although a review of the program following the Deepwater Horizon blowout in the Gulf of Mexico created additional uncertainty. BP suspended the project in November 2010, abandoned the ultra-extended-reach drilling proposal in June 2012 and revived the idea of an artificial gravel island in late 2013. By suspending the project in 2012, the federal government gave the company until the end of 2014 to submit a new DPP, by which time Hilcorp had acquired a 50 percent interest in Liberty.
As operator, Hilcorp filed the new DPP and will lead the project going forward.
