Work is progressing to bring the Mustang oil field on line soon
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The field crew is busy with the construction and installation work required to bring the Mustang oil field on the North Slope into production, Bart Armfield, president and CEO of Brooks Range Petroleum, told the board of the Alaska Industrial Development and Export Authority on April 17.
Two pipelines are being installed - the oil line for exporting oil from the field and a line for the future carriage of seawater for injection into the field reservoir.
“We want to get the (oil) pipeline completed. I think we’re about a week and a half away from that being done,” Armfield said. The “hot tap” and valve for connecting the line to the nearby Alpine oil are already in place. Crude will be delivered into the Alpine line for shipment to the trans-Alaska pipeline.
The field crew has installed a remote electrical and instrumentation module on the field’s gravel pad and is connecting it up. Electrical work, trenching and other work are in progress on the pad. The crew also needs to install what is referred to as “the early production facility,” a small-scale temporary production facility that will enable field startup.
The workforce at the site has peaked at about 90 people. Overall, 59 Alaska companies have been involved in the Mustang project, Armfield said.
An evolving planBrooks Range had originally planned to start the field using permanent 15,000 barrels per day production facilities. However, that plan was based on a $120 oil price in 2014, Armfield told the board. Following the subsequent oil price crash, Brooks Range had to put the project into “warm standby” mode before coming up with the plan to install the modestly priced temporary production facility. The idea is to start production at relatively low rates and, then, as production ramps up, use the resulting revenue to upgrade the production facilities to a larger scale.
Production will start at about 1,000 barrels per day, using a single well that Brooks Range flow tested in 2017. Then, during this year, the company will drill a 6,000-foot lateral sidetrack from a partially completed well, thus enabling an additional 2,000 to 3,000 bpd of production. The drilling of two more wells should then elevate total production to about 6,000 bpd by the end of the year, Armfield said. Total eventual field development would result in about 17 injection and production wells, he said.
Total capital requirements from this point forward, inclusive of drilling and facility upgrades, would amount to $350 million, Armfield said.
AIDEA assistanceAIDEA has been providing financing assistance for the project. Armfield particularly commented on the value of the agency’s assistance with the construction of the field’s gravel pad and the gravel access road to the pad. With gravel infrastructure a key to accessing relatively undeveloped areas of the North Slope, a number of companies have been able to make use of the Mustang gravel infrastructure. For example, Oil Search has been using the infrastructure for access to its work sites in connection with the neighboring Pikka development.
Armfield feels particularly proud that his company is now on the verge of bringing Mustang into production,
“We will be the first small, independent to go from actual discovery to production on the North Slope of Alaska,” he said.
- ALAN BAILEY