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New Liberty plan Hilcorp proposes a gravel production island for Beaufort Sea oil field Alan Bailey Petroleum News
Hilcorp Alaska has filed a development plan for the Liberty oil field with the Bureau of Ocean Energy Management, BOEM spokesman John Callahan told Petroleum News on Dec. 30. In November Hilcorp purchased a 50 percent interest in Liberty from BP and became field operator. The field is on the federal outer continental shelf of the Beaufort Sea, east of the Endicott field, off the central North Slope. (See map, page 31)
Suspended in 2012 Over the course of several years BP had proposed various ways to develop Liberty. Eventually, after abandoning a plan to develop the field using ultra-extended reach drilling from a surface location at the Endicott field, the company was considering a new plan for field development. BOEM had given BP until the end of 2014 to file its new plan. In taking over operatorship of the field, Hilcorp was presumably faced with that filing deadline.
Hilcorp's new development plan for the field involves the construction of an artificial gravel island, rather like the Northstar field, also in the Beaufort Sea.
Hilcorp spokeswoman Lori Nelson has told Petroleum News that Hilcorp has decided to move its plan for Liberty through the regulatory process but that the company has not yet decided whether to proceed with developing the field.
Part of a package Hilcorp’s purchase of its 50 percent interest in Liberty came as part of a package of Arctic Alaska properties that the company purchased from BP, including the Northstar and Endicott fields in the Beaufort Sea, and a 50 percent interest in the Milne Point field, in the central North Slope. Hilcorp specializes in breathing new life into aging fields - during a talk to the Alaska Support Industry Alliance in October, Greg Lalicker, president of Hilcorp Energy, commented that his company’s immediate focus on the North Slope will be to increase oil production rates from aging fields such as Milne Point. A decision on developing Liberty would depend on an investigation into whether the development would be viable and whether the field would be likely to make money in a reasonable timeframe, Lalicker said.
Up to 150 million barrels According to an overview document for Hilcorp’s new plan for Liberty, the field’s production is expected to peak at 60,000 to 70,000 barrels per day within two years of field startup, with an anticipated total production of 80 million to 150 million barrels over a field life of 15 to 20 years.
Hilcorp proposes initiating commercial production from the field within three years of obtaining field regulatory approvals and of sanctioning the financing of field development, the overview says.
Development would include the construction of a reinforced gravel drilling and production island about five miles offshore, in Foggy Island Bay, in a water depth of 19 feet. Facilities on the island will separate produced water and natural gas from the field’s oil production, with the water and gas being injected into the field reservoir to provide pressure support and enhance oil recovery. A single-phase subsea pipeline will carry produced crude oil to shore, from where an onshore pipeline will connect to the existing Badami pipeline, for shipping the oil to the trans-Alaska pipeline via the Endicott pipeline. The subsea line from Liberty will have a double-walled pipe-in-pipe structure, similar in design, presumably, to the subsea line from the Oooguruk field to the west.
Nine wells Hilcorp says that field development would involve the implementation of five production wells and four injector wells. However, the surface layout of the island will accommodate up to 16 wells, in case additional wells are needed to increase oil recovery or to act as replacement wells, Hilcorp’s plan overview says. Given the excellent fluid and rock properties in the subsurface, it will be possible to use conventional wells drilled from the artificial island directly over the field reservoir, the overview says.
Once the drilling is commissioned, the drilling operations will take place continuously for about two years. However, drilling through the reservoir section will only take place during the summer open-water season, or during the winter sea-ice season, the overview says.
BP plans Hilcorp’s plan appears similar in concept to the original plan for the field that BP considered after discovering the field in 1997. But BP subsequently abandoned that plan in favor of a concept involving the drilling of ultra-extended reach wells from Endicott, a plan that some perceived as environmentally attractive, especially given that the Endicott is close to shore and connected to the shore by a causeway.
BP moved ahead, making necessary extensions to one of the Endicott islands, conducting an offshore 3-D seismic survey to enable detailed well planning and even commissioning a special type of drill-pipe steel that would withstand the high torques involved in the extremely long Liberty wells. The company commissioned the construction of a massive drilling rig from Parker Drilling and duly assembled the rig on the extended Endicott island.
But all came to naught.
Under scrutiny Following BP’s Deepwater Horizon blowout in the Gulf of Mexico, the Liberty project fell under great scrutiny, with questions raised over the environmental risks associated with the very challenging project. Then, in November 2010 BP announced that it was suspending the project, saying that the Liberty drilling rig required an engineering review. That review pointed to the need for substantial modifications to a number of the rig’s systems, with the possibility of the cost of the project doubling and of a delay of several years before drilling could commence.
Work on Liberty remained on hold. But in June 2012 BP announced that it had abandoned the extended reach drilling project. And in the fall of 2013 the company said that it had reverted to the original artificial island concept for field development. In January 2014 BP applied to BOEM for approval to conduct a geotechnical and sea-bottom investigation in the Beaufort Sea in connection with the artificial island plan.
Now, with Hilcorp having acquired the operatorship of the field, the artificial island concept is still in play. In November Janet Weiss, president of BP Exploration (Alaska) Inc. told the Resource Development Council’s annual conference that Hilcorp had developed “a great concept” for Liberty that would make the field more competitive than previously thought.
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