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The Explorers 2018: The future starts today
CHANTAL WALSH Alaska Division of Oil and Gas Director
Those of us who have traveled throughout Alaska are awed by its vast expanses of land that most people have never seen or know anything about. The same could be said of Alaska’s oil and gas potential. After more than 60 years of oil and gas production in Alaska, we remain one of the most underexplored oil and gas regions in the world. However, recent discoveries of billion-plus barrel fields, the opening of more federal lands for leasing, and new technical resources provided by the state of Alaska are encouraging new exploration activity on our lands today and increased investment and production in the future.
World-class discoveries Major new discoveries have been announced since 2016. Armstrong and Repsol characterized its Nanushuk discovery as a 40-mile-long, 3-mile-wide play, with the possibility of 3 billion barrels of oil extending from the Pikka Unit to the Horseshoe exploration well drilled 15 miles south.
ConocoPhillips Alaska Inc. has also been heralding success in the Nanushuk topset play. The Willow discovery in the Greater Mooses Tooth Unit of the National Petroleum Reserve-Alaska could produce as much as 100,000 barrels per day of oil, as early as 2023.
All of this comes on the heels of Caelus Energy’s 2016 announcement that its Smith Bay lease holdings may contain as much as 6 billion barrels of light oil. In light of these announcements, the U.S. Geological Survey and the federal Bureau of Oceanic Energy Management are actively reassessing the Arctic Alaska region’s mean undiscovered, technically recoverable conventional resources. As of December 2017, interim revisions raise the mean estimate for all Arctic Alaska by approximately 9 billion barrels to nearly 50 billion barrels of oil and natural gas liquids.
Leasing federal lands The expansion of the federal government’s leasing program in Alaska opens lands for exploration which have intrigued industry for decades. With the signing of Executive Order 3350, BOEM is developing a new five-year plan for oil and gas exploration in offshore waters, targeting the outer continental shelf of Alaska. The draft plan would open nearly all offshore areas of Alaska to leasing, though BOEM has reserved the right to remove certain areas before issuing a final Proposed Program. These offerings are in addition to the increased acreage made available within NPR-A during BLM’s December 2017 lease sale, which encompassed 10.3 million acres. Finally, one of the most prospective areas in North America - the 1002 Area of the Arctic National Wildlife Refuge - was opened for future leasing and exploration. The Department of Interior has been directed to hold at least two lease sales in the next four years in the 1002 Area, a region estimated to contain as much as 10.4 billion barrels of oil.
North Slope exploration The state of Alaska’s North Slope lease sale in fall 2017 was the third largest sale in the last 20 years and the 2017-2018 exploration season has been one of the busiest in recent years. ConocoPhillips is actively drilling to appraise two different discoveries in the North Slope’s hottest new play - stratigraphic traps in Brookian sequence Nanushuk topset reservoirs. Multiple exploration wells are in the works, including the Putu 2 and 2A and Stony Hill 1 and 1A in the central and southern parts of the 40-mile long Pikka-Horseshoe trend. The company’s plans also call for drilling several more exploratory wells in the Willow-Tinmiaq trend some 30 miles farther west in the Greater Mooses Tooth Unit, Bear Tooth Unit and nearby non-unitized leases in NPR-A.
Eni and Shell are currently drilling a record-setting extended reach Nikaitchuq North exploratory well to test an undisclosed objective, drilling mostly horizontally from its Nikaitchuq Unit development on Spy Island to a bottom hole location outside the unit on federal OCS leases more than 34,000 feet to the north. Glacier Oil and Gas is drilling its Starfish 1 well at the Badami Unit, exploring to appraise undeveloped potential in the Killian interval, a turbidite sandstone reservoir slightly older than the Badami sands reservoir.
New North Slope 3-D seismic acquisition is underway, as industry capitalizes on recent exploration success and major innovations in seismic imaging. These new state-of-the-art surveys will translate into future drilling as explorers identify and rank prospects on state lands south of the Horseshoe discovery near the Colville River, state lands in the White Hills-Kuparuk uplands, as well as onshore and nearshore areas near the Point Thomson Unit and the ANWR coastal plain.
How the state helps The Department of Natural Resources is now releasing seismic surveys and well data sets from exploration projects that earned tax credits under Department of Revenue statutes adopted since 2003. The data are made available through cooperation between the Division of Oil and Gas and the Division of Geological & Geophysical Surveys; locations and descriptions of wells and surveys are accessible via an interactive map on the Geologic Materials Center website. Industry and researchers are responding enthusiastically to these data releases, which have already begun to drive new exploration on leases encompassing tax credit datasets.
The GMC houses a collection of rock cores and cuttings that represent more than 16.7 million feet of unique energy exploration and production drilling samples and 76,000 linear feet of continuous core from more than 3,000 exploratory or production wells on federal, state and private lands in Alaska, including the Alaska outer continental shelf. The collection also holds a catalogue of palynology slides, geochemical results, geologic reports, geologic maps and USGS air photos, and much more.
As Alaska competes with oil provinces around the world to attract investment in exploration and development, recent activities and announcements have helped reestablish Alaska as a place known for world-class resources. Industry is taking notice of new opportunities on state and federal lands where the next mega-discovery may be waiting. The state is making data available to assist companies during the exploration and development process. Viewing this as a whole, it is difficult to stay humble about Alaska’s future. But, with what the state and industry are doing today, we expect we won’t be waiting long to uncork our excitement.
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