State approves Cosmopolitan plan

New unit plan calls for operator Pioneer Natural Resources Alaska to begin drilling a new well or sidetrack by Nov. 14, 2007

Alan Bailey

Petroleum News

Alaska’s Division of Oil and Gas has approved a new plan of exploration for the Southcentral Alaska Cosmopolitan unit. That plan requires the drilling of a new well or a sidetrack well to commence by Nov. 14, 2007.

Pioneer Natural Resources Alaska President Ken Sheffield said that Pioneer will evaluate the results from that new well and, if the results meet certain criteria, the company will define a development strategy and make a development decision.

Cosmopolitan, which is approximately two miles offshore, near Anchor Point on the lower Kenai Peninsula, includes state and federal leases totaling some 25,000 acres. The prospect has resource potential of 30 million to 100 million barrels of oil, Sheffield told an audience at the South Central Alaska Energy Forum on Sept. 21.

Pioneer first bought into the Cosmopolitan unit in 2005. In June 2006 the company acquired 50 percent ownership of the unit and took over the operatorship from ConocoPhillips.

“We’re pushing this project forward,” Sheffield said. “We’re envisioning that if all goes well we could see first production in approximately 2010.”

But that possible 2010 startup date is contingent on further appraisal of the prospect.

The known oil accumulation at what is now called Cosmopolitan was discovered by Pennzoil in 1967 in the 12,112-foot vertical, Starichkof State No. 1, drilled from a jack-up rig. The company recovered 30 barrels of 20 degree API gravity oil from a drill stem test at about 6,900 feet and 21 barrels from a drill stem test at about 6,800 feet. Pennzoil reported encountering the top of the Hemlock formation at 6,745 feet. A second well, also drilled in 1967, found some gas at 4,000 feet but water in the Hemlock formation at 7,355 feet some two miles from the first well.

The more recent appraisal of the prospect has involved directional drilling from shore — in 2003 ConocoPhillips and the other owners at that time drilled a long-reach appraisal well, Sheffield said. The well entered the Hemlock and tested at approximately 500 barrels per day, he said.

Because the original 2-D seismic data for the area of the prospect is of poor quality, the working interest owners shot some new 3-D seismic in 2005.

“With that survey we have a much better handle on the shape of the structure and the size of the resource,” Sheffield said.

But Sheffield cautioned that a development at Cosmopolitan would entail a large project.

“If all this were to come together … it would require some pretty significant infrastructure. … We’re about 65 miles from the existing Tesoro refinery on the Kenai Peninsula,” he said.