New attitude at Prudhoe
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Hilcorp operatorship brings entrepreneurial, owner view to state’s largest field
Hilcorp took over as operator at Prudhoe Bay on July 1, bringing a corporate culture of entrepreneurship and ownership to the state’s largest field where it acquired a 26% interest - the biggest chunk of its acquisition of BP’s Alaska assets.
Jill Fisk, asset team leader at Prudhoe Bay West, provided some perspective on what has changed on Nov. 18 at the Resource Development Council’s 41st annual Alaska Resources Conference, this year a virtual event due to COVID-19.
Hilcorp has COVID management in place, Fisk said, but due to an increase in cases and close contact the company paused some work at Prudhoe in November, reducing head count at the field by about 150.
Hilcorp has 320 employees at PBU east, 270 at PBU west, 135 employees at power and gas, and 85 employees in infrastructure and maintenance. There are also some 1,200 contractors at the field, Fisk said.
EntrepreneurshipHilcorp has a culture of entrepreneurship and ownership, Fisk said, with a focus on unlocking energy for the betterment of the company’s employees and the community and keeping the field profitable for decades to come.
Ownership - working like you own the company - brought some immediate changes at Prudhoe, Fisk said.
In the first month the team at Flow Station 2 helped to eliminate a shutdown by finding a way to replace some equipment without requiring a shutdown.
The company’s ownership value works because Hilcorp pushes decision making and ownership as close to the wellhead as possible, allowing those who know the field to come up with the best ideas and solutions, she said.
On the maintenance side, more fin fans were repaired at Gathering Center 1 in the first month than in the previous four years, leading to improved plant efficiency in the summer months.
The wells support group found a better way to dewater pits during the summer - replacing pumps which had to run very slowly to avoid erosion with a tool from the agriculture industry - very large sprinklers which could move large volumes of water without erosion issues.
ContractorsFisk said the process of right sizing the contractor workforce at Prudhoe was not easy for some of the contract companies that had been working at the field, but said it was “absolutely necessary” to get costs at Prudhoe and operations at the field on a “winning and sustainable track.”
She called the contract workforce “a critical component” of succeeding at Prudhoe, and said alignment is important for success.
There have been great examples of contractors bringing ideas to the table to save cost and improve efficiency, Fisk said, citing an idea from a contractor in the first week that Hilcorp operated. For years contractors managing bulk halon storage had followed a directive to stop the labor intensive work of recovering the last 15% of halon from storage containers because of the time required.
But the lead for that group told the Hilcorp foreman “on day one” that he could recover that halon while doing other work - and in under a month, that saved more than $250,000.
Key focus areasFisk said the company’s three key focus areas “were to optimize and return wells to production, improve plant reliability and efficiency and cut operating costs.”
On the production side, Hilcorp has been able to increase rate by about 10,000 barrels per day, and as temperatures dropped in November, she said, there have been several days of more than 280,000 bpd.
The average number of wells on production each month, which started increasing in late 2019, has been increased across the field since July 1.
There has been an increased focus on areas needing more pressure support, “getting water injection reestablished to those areas, optimizing wells and returning wells to service, optimizing gas lift and flowline pressure and other types of work that have led to this production increase.”
While more wells on line would mean more production, at Prudhoe, Fisk said, along with oil the field produces almost 9 billion cubic feet a day of gas and more than 1.5 million barrels of water, requiring separation, moving and reinjection.
It isn’t just returning wells to production, she said, it’s moving more gas and water through the plants, and one of Hilcorp’s primary focus areas has been “improving plant reliability and efficiency.”
The focus there has been returning out of service equipment back to service, allowing more gas to move through the plants during the summer months.
Fisk said there will be some big successes and projects at Prudhoe, but “it isn’t just the few big wins” that will make the field successful “but the thousands of little wins that will add up.”
She said Hilcorp is excited about Prudhoe but will “need out partners’ support to do the things we want to do.”
“We’ve gotten a great start working together as an owner group and leveraging the expertise and experience that each company brings to the table,” Fish said. “The ability to execute projects and invest capital at Prudhoe going forward will greatly depend on the outlook for fiscal stability in Alaska.”