NOW READ OUR ARTICLES IN 40 DIFFERENT LANGUAGES.
HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PAY HERE

SEARCH our ARCHIVE of over 14,000 articles
Vol. 23, No.29 Week of July 22, 2018
Providing coverage of Alaska and northern Canada's oil and gas industry

Higher expectation

ConocoPhillips ups Willow estimate, expresses optimism for North Slope

Alan Bailey

Petroleum News

ConocoPhillips has upped its estimate for recoverable resources from its Willow prospect in the National Petroleum Reserve-Alaska from 300 million to 400-750 million barrels of oil equivalent, the company said in a July 16 news release expressing a high level of optimism about its operations on Alaska’s North Slope. The company also confirmed that, given the higher estimate for Willow oil, the construction of standalone production facilities would be justified for the field - the alternative would have been to develop the field as a satellite, with produced fluids being processed through the Alpine field facilities to the east. The company has previously filed a master plan for a Willow development with the Bureau of Land Management - the plan, which envisages standalone facilities, was designed to trigger the development of an Environmental Impact Statement for a Willow development.

The July 16 release said that development of Willow will likely cost $2 billion to $3 billion over four to five years after a final investment decision is made, with first oil flowing from the field by 2024 to 2025. A further $2 billion to $3 billion would then be spent on cumulative drilling over multiple years to sustain production, the release said.

“Efforts are underway to analyze and evaluate results from the 2018 appraisal season in order to advance development planning and future appraisal needs,” the release said.

Narwhal trend discoveries

The release also announced some results from the drilling of the Putu and Stony River exploration wells that ConocoPhillips conducted last winter in what the company terms the Narwhal trend, south of the Alpine field. ConocoPhillips cored and flow tested these wells. Additional appraisal is needed, but the discovered resource is estimated to amount to 100 million to 350 million barrels of oil equivalent, the release said. The wells also appear to be broadly in line with the Pikka/Horseshoe trend in which Oil Search and its partners are planning to develop a major oil find in the Nanushuk formation.

All told, the new ConocoPhillips discoveries amount to recoverable resources in the range 500 million barrels to 1 billion barrels. Yet 75 percent of ConocoPhillips’ prospective exploration acreage has yet to be drilled, the company’s release said.

“The company anticipates another active exploration and appraisal season in 2019,” the release said.

According to a July 16 investor presentation, ConocoPhillips’ 2019 exploration drilling program will focus on appraisal drilling in the greater Willow area and in the Narwhal trend. The Willow appraisal drilling will likely include the West Willow prospect that the company drilled into this year.

Confidence in Alaska

In its press release, ConocoPhillips also expressed confidence in its Alaska operations.

“Over the past few years the company’s Alaska business has undergone a significant transformation, driven by a more competitive fiscal framework, cost reductions, technological advancements and an exploration renaissance,” the release said.

The company’s legacy assets on the North Slope - its interests in the Prudhoe Bay and Kuparuk fields, and in the western North Slope including the Alpine field - represent a net resource of 2 billion barrels of oil, with a cost of supply of less than $40 per barrel. The newly discovered assets also have a cost of supply estimated to be less than $40 per barrel, the release said. ConocoPhillips is in the process of acquiring BP’s interests in the Kuparuk field, a deal that would substantially increase the ConocoPhillips ownership interest in that field. Recently the company bought out Anadarko Petroleum Corp.’s interests in the western North Slope, thus achieving 100 percent working interest ownership of these assets, including the Willow prospect and other new discoveries.

ConocoPhillips estimates that production from its North Slope legacy assets in 2018 will amount to some 225,000 barrels of oil equivalent per day.

“We believe that the company’s Alaska plan aligns with our disciplined, returns-focused strategy, supports Alaska’s economy and creates significant value for shareholders,” said Ryan Lance, ConocoPhillips chairman and CEO. “Alaska provides competitive investment opportunities and will generate profitable growth from diversified investments with significant exploration upside. We are proud of the value we create for the State of Alaska through the revenues we generate, the jobs we create and the community investments we make.”

Efficiency improvements

According to the investor presentation, the company is the largest oil producer, has the most reserves and holds the highest acreage of any oil company operating in Alaska. The presentation indicates that improved oil recovery techniques in the legacy fields has reduced the production decline rate from 8 percent to 6 percent per year. Coiled tubing drilling and advanced drilling techniques are enabling access to more oil within the reservoirs.

The company has significantly reduced the cost of supply and has achieved a 45 percent improvement in personnel productivity, the presentation indicates.

Following the CD-5 development in the northeastern NPR-A, which exceeded expectations, ConocoPhillips is proceeding with the Greater Mooses Tooth 1 and Greater Mooses Tooth 2 developments, also in NPR-A. The 1H NEWS development in the Kuparuk River unit went into production late last year and the eastern NEWS development is anticipated to go into production around 2023, the presentation indicates.



Did you find this article interesting?
Tweet it
TwitThis
Digg it
Digg
|

Click here to subscribe to Petroleum News for as low as $89 per year.


Petroleum News - Phone: 1-907 522-9469
[email protected] --- https://www.petroleumnews.com ---
S U B S C R I B E