BP working on more challenging resources: viscous oil and Lisburne

Kristen Nelson

Petroleum News Editor-in-Chief

BP was not planning to leave Alaska a decade ago — when the company produced a TV commercial to reassure Alaskans that there were billions of barrels left on the North Slope — and it is not planning to leave Alaska today.

That was the message Steve Marshall, president, BP Exploration (Alaska) Inc., delivered at the Resource Development Council’s annual conference in Anchorage Nov. 20.

In fact, he said, over the past two years BP has made progress in making Alaska investments competitive with opportunities around the world, reducing unit costs and increasing production 13 percent since 2001, a level which the company expects to sustain for at least the next several years. BP has billions of barrels of known resources in its Alaska portfolio, more than anywhere else in the world, he said.

These resources are known, he said, but will require billions of dollars of investment.

Where are they? In accumulations that couldn’t be recovered economically in the past, such as heavy oil, where new drilling and recovery techniques are now in use, and heavy oil now accounts for some 5 percent of North Slope production. Hundreds of millions of dollars in new investments are planned over the next few years, Marshall said, and viscous production could more than triple by 2010.

Another example of known resources is the Lisburne formation that underlies Prudhoe Bay, some 2 billion barrels. The formation is limestone, less permeable and more difficult to produce than the main sandstone reservoir at Prudhoe Bay, Marshall said. Although industry put more than $1 billion into developing the Lisburne reservoir in the 1980s, production peaked at less than half the expected rate.

Recently, Lisburne was producing only about 10,000 barrels per day, and only 10 of its 89 wells were producing consistently.

“We’ve tested new drilling and completion techniques on two wells this year,” Marshall said, “and the results have been very promising.” Production from the new wells is holding steady at more than 1,000 bpd each, he said, and Lisburne production has been increased by more than 20 percent this year. We’re still learning, he said, and plan to drill at least three more Lisburne wells in 2004. As with viscous oil, there is considerable potential at Lisburne: Of 2 billion barrels in place, only 7 percent has been produced.

“It’s a little like the story of the three bears and their bowls of porridge,” Marshall said. “Viscous oil is too thick and the reservoir’s too soft. At Lisburne the rock is too hard. And at Prudhoe Bay it’s just right. But with Prudhoe in decline, we have to look elsewhere to fill the gap.”