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Finding new value from old Cook Inlet platforms Seamount suggests some uses for the aging platforms in Alaska’s Cook Inlet Alan Bailey Petroleum News Staff Writer
Oil production is slowing down in Alaska’s Cook Inlet and operations on some of the oil platforms have already stopped. But could the lives of the aging platforms in the Inlet be extended?
Dan Seamount, commissioner at the Alaska Oil and Gas Conservation Commission, thinks “yes.”
In a Feb. 11 presentation to a joint meeting in Kenai of the Alaska Legislature’s House and Senate Resource committees, Seamount described some possible ways to continue use of the platforms to maximize the amount of oil and gas extracted from the Cook Inlet Basin.
Seamount pointed out that there has been relatively little exploration drilling in the Cook Inlet compared with oil regions elsewhere in the United States. So the potential for large quantities of undiscovered oil under the inlet should cause people to hesitate before tearing down costly platforms that could play a useful role in future oil development.
“I want us to very seriously consider not abandoning these platforms until we’re sure that all the resource that can be extracted has been extracted,” Seamount said.
Seamount cited studies of the oil source rocks in the Cook Inlet Basin. Experts have concluded that 96 percent of the oil that has been generated under the Cook Inlet has never been found, he said.
“There’s still a good chance that a lot of that 96 percent is still under the drill bit,” Seamount said. Recovering more oil Seamount thinks that there are also opportunities to extract more oil from the known oil pools in the existing oil fields.
Seamount commended work by Unocal and XTO Energy to extend the life of some platforms. He highlighted development and redevelopment drilling by XTO Energy at the Middle Ground Shoals field as a good model for what can be achieved.
And new technologies such as tertiary oil recovery and stimulation could surely recover more of the oil, Seamount said.
“The recovery rate on a lot of the platforms is less than 25 percent as compared to Prudhoe Bay which has rates around 55 percent,” Seamount said. Untested prospects But Seamount sees exploration for undiscovered oil as a key to the future.
“We’d like to see the platforms used as exploration structures,” he said.
Seamount said that there are many known, untested Tertiary prospects accessible from the platforms. He particularly emphasized the existence of fault blocks, some of which lie right under the platforms — these blocks form fault traps that could contain what is known as “attic oil.”
“There are other fault blocks out there that can be accessed from the platforms,” Seamount said. “We could explore untested fault blocks and now, with new technologies and extended reach drilling, there are a lot of other identified prospects within reach.” Oil in the Jurassic? Seamount also thinks that there is oil in the Jurassic strata under the platforms, below the Tertiary rocks that form the reservoirs for all of the Cook Inlet oil and gas fields. Geologists have established that rocks of the middle Jurassic Tuxedni group sourced all the oil in the Cook Inlet fields. That oil must have migrated through or alongside potential reservoir sandstones that are late Jurassic in age and that are known to exist under the Cook Inlet.
“There are very thick sands in the Jurassic,” Seamount said. “The oil would have had to have touched the sandstone within the Jurassic before it got up into the Tertiary reservoirs that have been exploited so far.”
So, there is a high risk but potentially high reward play for oil in the Jurassic sandstones, Seamount said. But few wells in the Cook Inlet have penetrated the Mesozoic strata below the Tertiary oil and gas fields. Of these wells, only a handful have drilled into the Mesozoic for more than a few hundred feet.
“I would recommend we use a non-utilized well bore to under every single platform and drill another 5,000 feet below the known reservoir to see what’s down there,” Seamount said.
The major oil companies have been operating in the Cook Inlet for 40 years, Seamount said. These companies have invested a great deal of money in the oil and gas fields. However, potential new investors have arrived on the scene and oil prices are high — the number of new investors in the Cook Inlet has quadrupled in recent years, Seamount said.
So Seamount wonders whether new low-cost operators could buy some of the platforms, increase production rates from existing oil pools and do some new exploration drilling.
Seamount raised questions about possible state of Alaska assistance with drilling deep wells into the Jurassic. He also wondered if there is any potential for the state taking over any of the platforms from the current operators.
“Let’s keep the platforms as assets — let’s not destroy them just yet,” Seamount said. Legislative action Petroleum News asked Bill Van Dyke, petroleum manager at the state’s Division of Oil and Gas, about state promotion of development and exploration from the Cook Inlet platforms. Van Dyke commented that the idea of deep drilling into the Jurassic has merit. However, because the tracts around the platforms are already under lease, any new state incentives for exploration drilling would require legislative action.
Van Dyke also said that the state has little interest in taking over the Cook Inlet platforms, primarily because the state does not wish to assume the current owners’ liabilities for disposal of the platforms without a “more guaranteed return down the road.”
“The question you are always left with is ‘who’s going to assume the cost to ultimately abandon the platform?’” Van Dyke said.
He said that the state would be pleased to see new exploration activities from the platforms, either by the existing operators or by other companies.
“There’s nothing today prohibiting an outside company … from doing some sort of a farm in … and drilling one of these prospects,” Van Dyke said.
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