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Marathon exploring offshore at Kasilof Extended reach well will be company’s first dual lateral completion in Alaska Kristen Nelson Petroleum News Editor-in-Chief
Ninilchik is Marathon’s most significant development in Alaska this year, John Barnes, Marathon’s Alaska business unit manager, told the Resource Development Council’s annual conference Nov. 20 in Anchorage. The field began producing Sept. 2 and is currently producing more than 25 million cubic feet a day from four wells. Barnes said production is expected to be more than 40 million cubic feet a day by the end of the year.
Marathon owns 60 percent of the field and is the operator. Unocal owns the other 40 percent. The companies are also partners in the new Kenai Kachemak Pipeline which is moving the gas north to a hub near the Kenai gas field, a length of 33 miles through 12-inch diameter pipe with a capacity of 120 million cubic feet per day with 90 million cubic feet committed to far.
Five wells have been drilled to date at Ninilchik and Barnes said the drilling rate is expected to be two to three wells a year over the next several years, with drilling and completion time about 50 days per well. Drilling under way at Kasilof Marathon is drilling a discovery well at Kasilof, from onshore to an offshore location north of Ninilchik.
Barnes said that if there is a discovery at Kasilof that gas would be connected by a 4.1 mile lateral. The Kasilof well is a 17,000 foot extended reach well, Barnes said, and will be the first dual lateral completion by Marathon in Alaska.
Drilling is going on now.
“That’s probably the most ambitious well we’ve drilled in several years,” Barnes said. Two bores will be drilled from one hole. The junction has been set, he said, and Marathon is drilling the first leg.
Marathon will be running three onshore drilling rigs onshore in the near future, which will be the highest activity level the company has had in several years, Barnes said. Marathon expects to drill between eight and 12 wells in 2004, including completing the Kasilof well. The company shot some seismic near the West Fork area near Sterling and hopes to have a prospect in that area worth drilling, Barnes said, and will also be working the East Swanson River prospect in partnership with Unocal. Permitting a challenge There are challenges, Barnes said, tops among them the permitting process, with anywhere from 39 to 57 permits, permissions, plans and reports required for a project.
“Any one of these pieces of paper is reasonable, well thought out, well meaning, but it’s in the aggregate that you have the problem,” he said.
Barnes said he would suggest doing an overlap analysis “to see if we can find a way to streamline some of these.”
The pipeline regulatory environment is another challenge.
“Cook Inlet’s changing, we need to see about converting pipelines to common carrier, change the status, set proper tariffs.” The permitting and regulatory costs for the 33-mile Kenai Kachemak Pipeline were about 13 percent of the $25 million cost, he said. And getting a final tariff for the pipeline won’t occur until about a year after shipping began — some 36 months after the process was begun.
That, he said, is a deterrent to investment.
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