What now for North Slope heavy oil?

In 2012 BP announced that, because of the high level of Alaska oil production tax, it was going to shut down a heavy oil test project it was carrying out in the Milne Point field on the North Slope. But with the state’s recent oil tax overhaul, will the heavy oil project be reprieved?

BP spokeswoman Dawn Patience told Petroleum News in an Aug. 2 email that the last of the heavy oil test wells had stopped working in July.

“Heavy oil faces both technical and economic challenges,” Patience said. “BP has made real progress on the application of CHOPS (cold heavy oil production with sand) technology, but it will take a significant investment and technology to recover those barrels.”

But the company has not announced any changes to its heavy oil strategy following the oil tax rework.

Heavy oil — oil with a thick, syrupy consistency that is too viscous to flow unaided down a pipeline — exists in large quantities at relatively shallow depths above the Prudhoe Bay and Kuparuk River fields. BP installed a heavy oil test facility at Milne Point S-pad and had been evaluating the feasibility of producing heavy oil using a downhole augur-like pump to suck a mixture of sand and oil up a production well, without the application of heat to the subsurface.

Although the company has yet to demonstrate the technical and commercial viability of heavy oil production using this type of technique, a couple of test wells have proved successful, achieving flow rates topping 500 barrels per day. Following its 2012 announcement about bringing the test project to a close, BP continued to flow oil from test wells that were in operation, with the intention of ending the test project once the test wells stopped producing.

—Alan Bailey