Commission OKs expansion of area covered by Schrader Bluff pool rules

Kristen Nelson

PNA Editor-in-Chief

The Alaska Oil and Gas Conservation Commission has approved BP Exploration (Alaska) Inc.’s application for pool rules for the Schrader Bluff shallow viscous oil accumulation at the Milne Point field, including expansion of the area covered by pool rules for the Schrader Bluff oil pool and “modifications to better reflect the current understanding of the hydrocarbon distribution within the” Schrader Bluff accumulation.

BP’s requested expansion is to the south to include its new activity from S pad.

The company told the commission that it is also applying to the Department of Natural Resources for an expansion of the Schrader Bluff participating area but in early September DNR had not yet received an application to expand the participating area.

The commission did not hold a hearing on this application, which it approved in a conservation order issued Aug. 23, but in information filed with the commission in July David Jenkins, BP’s Milne Point viscous oil development team leader, explained the company’s reasons for the application.

Conoco began development of the deeper Kuparuk reservoir at Milne Point in the 1980s, and in 1991 began to develop the Schrader Bluff sands, Jenkins said, and BP purchased 91 percent of Milne Point in 1994 and began its own study of the Schrader Bluff reservoir.

A 1999 drilling program at Tract 14 “became the first economically successful viscous oil development at Milne Point,” Jenkins told the commission, “and paved the way for further financial investment.”

The 1999 program used a new technical strategy, Jenkins said, including jet pumps instead of electric submersible pumps, multi-lateral wells and coiled tubing drilling and that technology improved the economics enough that the $179 million S pad development project, under construction, was sanctioned. Primary targets at S pad are the OA and OB sands, but there is also some potential in the shallower N sands, Jenkins said, and BP is assessing the technology required to drill horizontal laterals into the N sands at S pad. Conoco began Schrader development in what is called the Tract 14 area, and Jenkins said BP is “studying the original Tract 14 area to determine whether sufficient reserves remain to support large-scale re-development utilizing long horizontal multilateral wells.” He said some redevelopment has been done and the results are under review.