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ConocoPhillips Alaska’s largest producer
From Producers’ magazine: As it continues to reduce its environmental footprint, the big independent increases output Kay Cashman
ConocoPhillips Alaska Inc., or CPAI, is Alaska’s largest oil producer. With a history of more than 60 years in the state, the Alaska unit of the Houston-based independent has diligently pushed westward beyond Prudhoe Bay.
(See map for this story in the online issue PDF.)
Going east to west on Alaska’s North Slope, CPAI has four Central Processing Facilities: CPF 1-2-3 in the Kuparuk River Unit and the Alpine Central Facility in the Colville River Unit.
Kuparuk River has 48 drill sites with active wells flowing through CPF-1, CPF-2 or CPF-3.
The Colville River Unit has five drill sites - CD1-2-3-4-5. Those five drill sites and the Greater Mooses Tooth Unit drill sites MT6 and MT7 flow through the Alpine Central Facility.
All are operated by CPAI.
The company also owns approximately a 36% working interest in the Prudhoe Bay Unit, which is operated by Hilcorp North Slope LLC.
“Through the coming decade, we anticipate making significant capital investments at Colville River Unit, GMT Unit, Kuparuk River Unit, and Prudhoe Bay Unit which should enable gross production from these four units to grow and exceed 450,000 barrels of oil per day,” CPAI media director Rebecca Boys told Petroleum News in an early September 2022 email.
What’s new In response to a query from Petroleum News about what was new in CPAI-operated North Slope fields, including what new production was expected to feed into their processing facilities in the next year or two, Boys said in the Kuparuk River Unit the Nuna and Coyote projects will be developed from drill sites 3S and 3T.
Also in Kuparuk, the Eastern NEWS, or North East West Sak, project, which will be developed in the CPF-1 area, will be a “continuation of our successful West Sak 1H NEWS development.”
In the Colville River unit, “there are the Narwhal (Nanushuk) projects with CD4 expansion and the new CD8 drill site. And of course, continuation of ERD drilling at CD2 targeting the Fiord West reservoir,” she said, something that Petroleum News sources say is expected by the end of the year.
“In addition, there will be continued coil tubing and rotary development drilling across these assets,” Boys said.
Fiord West ERD In a May 18, 2022, update of an April 11 annual update to federal and state officials on the 24th Colville River Unit plan of development, CPAI said it had achieved first oil at the Fiord West satellite. The well, CD2-310, was a record-setting horizontal well drilled into the Kuparuk formation by Doyon Rig 26. The well was drilled to a total measured depth of 35,526 feet making it the longest North American land based well.
Given the “significant challenges seen” in the well that led to delays, the company said its “drilling plans for 2022 had been updated to include a drilling break” for Doyon Rig 26 to be able to “improve ERD drilling operations.”
The extended reach drilling rig, also known as the “Beast” because of its immense size, had started drilling the Fiord West CD2-310 well in second quarter 2021; it wasn’t finished until May 2022. The technologically advanced rig is capable of drilling in excess of 40,000 feet.
“This break in the ERD program,” CPAI said, “will be used to incorporate the lessons learned from CD2-310 execution and make required engineering changes to the ERD well designs going forward.”
While the well might not have been completed on time, it exceeded CPAI expectations in terms of output.
On May 20, 2022, CPAI said the well’s flowrate was “being progressively increased and producing close to 10,000 barrels of oil per day, exceeding expectations.”
On June 1, 2022, CPAI told Petroleum News that the company’s Fiord West CD2-310 well had been “flowing steady” at 11,500 barrels of oil per day.
“The well choke is now fully open. A high rate was reached on May 25” of 12,000 barrels of oil per day, CPAI said in an email.
Initially, CPAI hoped to produce some 20,000 barrels of oil per day from the satellite, but that was from several wells.
At that time the company said the well will be “pre-produced for 5-6 months prior to being converted to permanent injection service.” (CD2-310 was initially planned to be a development well, but its status was later changed by CPAI to that of an injector.)
Petroleum News sources said in mid-September 2022 that the Doyon 26 ERD rig was still in “warm stack” but remains under contract to CPAI. Expectations are that Rig 26 will start up again near the end of 2022.
The Colville River Unit is in both state of Alaska land and in federal land.
Narwhal PA, CD8 Also in the Colville River Unit is the Narwhal Participating Area, covering some 3,360 acres, where sustained oil production began Dec. 14, 2021.
The Narwhal PA encompasses an area on the southeast edge of the unit where CPAI drilled the Putu 2 and Putu 2A wells. It is adjacent to the Pikka unit, where Santos subsidiary Oil Search (Alaska) and Repsol are working to develop the Nanushuk formation.
The company announced the Narwhal discovery based on the Putu wells, estimating between 100 million and 350 million barrels of oil equivalent.
Willow (in the National Petroleum Reserve-Alaska) and Narwhal are different sediment deposits within the Nanushuk formation, with Willow being older.
In its PA approval the division said the Narwhal sands “are broadly age equivalent to the Late Cretaceous Nanushuk Group.” CPAI proposed defining the Narwhal reservoir as the accumulation that correlates with that found in the Oil Search (Alaska) Qugruk 3 well from 4,192 to 5,152 feet measured depth.
“The Narwhal sands extend for approximately 30 miles long by 3 miles wide,” the division said.
Planning for development of a new drill site called CD8 will continue during 2022. This new drill site will develop the Narwhal reservoir in the Fifth Expansion area of the Colville River unit.
The company plans to drill one new Narwhal PA well by May 15, 2023.
Nuna and Coyote Per Boys’ early September 2022 email, in the Kuparuk River Unit the Nuna and Coyote projects will be developed from drill sites 3S and 3T.
Here are some of the things CPAI executives have said, or CPAI state filings have revealed, about the Coyote and Nuna prospects.
* In 2015-16 the company drilled the Torok reservoir at Drill Site 3S (Nuna), drilling a well pair and contacting more than 4,000 feet of reservoir in a single lateral.
* Among CPAI’s “notable activities” completed within the Kuparuk participating area in 2021 was the completion of a well sidetrack into the “Brookian-age Coyote reservoir” from DS-3S. (Coyote had been identified from review of 2015 3D seismic.)
* In mid-2021, CPAI announced the Coyote discovery east of Nuna. At the time, company President Erec Isaacson said Coyote was in the Brookian topset above the Nuna Torok discovery, describing Coyote as shallow.
* In late 2021 and 2022 CPAI officials said that the primary Greater Kuparuk Area development projects included Coyote, Nuna and North East West Sak, also referred to as Eastern NEWS.
* Regarding the status of Nuna, the company told Petroleum News on May 4, 2022: “We continue to progress the project planning and approvals for the development at 3T, a planned future drill site where we plan to locate the Nuna development. It will be sited on the existing gravel pad within the Nuna acreage we acquired from Caelus. We plan to drill some wells in the same reservoir in the 3S area in Q3 2022 that will provide key learnings to help us further optimize the 3T development plans.”
* Also on May 4, 2022, a CPAI spokesperson told Petroleum News that well test results from the Coyote prospect were “very successful,” exceeding CPAI expectations and “providing key data to help us better understand the Coyote reservoir interval.”
In CPAI’s 2022 Kuparuk River Unit 2022 plan of development, which was approved in July 2022 and runs from Aug. 1, 2022, through July 31, 2023, the company said rotary drilling was planned to resume in the third quarter of 2022 with an injector-producer pair in the Torok (Moraine) reservoir (Nuna).
In addition to the completion of a well sidetrack into the Brookian-age Coyote reservoir from DS-3S, CPAI said it further continued to monitor the two existing Torok (Moraine) horizontal producer/injector well pairs at DS-3S, to determine long-term deliverability and waterflood performance of the reservoir.
Also, CPAI intends to apply for a separate participating area for the Torok (Moraine) reservoir ahead of the 2023 Kuparuk River Unit POD submission.
In addition to the Torok (Moraine) wells, CPAI also plans to pursue a well pair within the Coyote reservoir and an additional Kuparuk target during the 2022 POD period.
Pilot EOR at Coyote On Aug. 11, 2022, CPAI applied to the Alaska Oil and Gas Conservation Commission for approval of a pilot enhanced oil recovery project for the Coyote interval in the Kuparuk River unit.
In its application the company said since the feasibility of injection into the reservoir had not been established, this is considered a pilot project that “will aid in determining the commercial viability of developing Coyote as an enhanced oil recovery project.”
The area is in the vicinity of DS 3S at Kuparuk, and includes an adjacent lease, ADL 392374, which is held by the Kuparuk working interest owners but is not currently in the unit.
“The 3S-24B exploration well was drilled to understand the ability to produce from the Coyote interval,” the company told AOGCC. A horizontal producer-injector well pair is planned for the fourth quarter of this year with injection beginning about the first quarter of 2023.
The development design for Coyote is expected to be a line-drive water alternating gas flood with horizontal producers and injectors, the company said, with results from the pilot indicating whether that is the optimal development concept.
“If a commercially viable discovery is established and the development is sanctioned, then CPAI would apply at that time to the AOGCC to establish pool rules and an area injection order,” the company said.
CPAI told AOGCC in its application that the first injector will be 3S-701 and be 1,000 to 3,000 feet southwest of the planned production well, the 3S-704, with optimum spacing for development of the reservoir still under analysis.
“Completion of the 3S-701 injection well will allow interference and injection testing of the Coyote reservoir to help establish the optimal pattern spacing and potentially support commerciality of the reservoir,” the company said.
A second injection well may be drilled, depending on the outcome of the first injector and its testing, to continue “this long-term injection and production test with a fully supported producer centered pattern centered around the 3S-704.”
The company is requesting a 3-year duration for the pilot to allow time for drilling, testing injector performance, analyzing results of the first injector and potentially drilling, testing and observing and analyzing results of a second injector.
Logs from the Palm 1 well - with a bottomhole immediately west of DS-3S - were used to define the “gross Coyote reservoir interval” at a measured depth range of 4,270 to 5,115 feet, the company said.
“The Late Cretaceous Coyote reservoir is a thinly bedded, shallow marine, west to east progradational system within the Nanushuk formation,” ConocoPhillips said, with a thickness of approximately 650 feet in the DS-3S area.
“The interval has been penetrated by numerous wells targeting deeper stratigraphic intervals, both from Drill Site 3S, and vertical off-ice exploration wells in and surrounding the Kuparuk River Unit.”
The DS-3S is currently on produced water service, but that could change, and part of the purpose of the pilot is to confirm compatibility, the company said, listing primary injection fluids as:
*Produced water and gas from oil pools within the Kuparuk River unit;
*Beaufort seawater from the Kuparuk seawater treatment plant; and
*Enriched hydrocarbon gas - a blend of KRU lean gas with indigenous and/or imported natural gas liquids.
CPAI said the proposed Coyote enhanced recovery injection order area is within the scope of an existing aquifer exemption, as the lease not currently in the Kuparuk River Unit was part of the unit in 1984 when the Environmental Protection Agency adopted the aquifer exemption and in 1986 when AOGCC incorporated the EPA aquifer exemption.
“Initial reservoir modeling and simulation estimate a primary depletion recovery factor of 5-10%, a cumulative recovery factor from waterflood operations between 20-30%, and an incremental 1-5% recovery for enriched gas injection (EWAG),” CPAI said.
Willow on hold When the U.S. Bureau of Land Management issued a draft supplemental environmental impact statement for CPAI’s Willow project in the National Petroleum Reserve-Alaska, the agency added Alternative E.
The company told Petroleum News in a July 2022 email that the new alternative was in response to an order from the U.S. District Court for Alaska.
BLM said in the draft SEIS that Alternative E is intended to reduce surface infrastructure in the Teshekpuk Lake Special Area and reduce impacts to yellow-billed loon nests near the original proposed location for the Bear Tooth 5 drill site - Willow is in the Bear Teeth unit in NPR-A.
In the company’s second quarter earnings call on Aug. 4, 2022, Chairman and CEO Ryan Lance said ConocoPhillips looks forward to a record of decision on Willow later this year “so we can move forward on the project. We think we’ve satisfied all the concerns that the federal judge has had, and we’re ready to move forward.”
Nick Olds, ConocoPhillips’ senior vice president, strategy and technology, called publication by BLM of the draft SEIS on July 8 “a key milestone,” but said the company wouldn’t make a final investment decision until BLM publishes a final SEIS and there is “a supportive record of decision by the BLM.” That, he said, would allow ConocoPhillips to move forward with Willow construction.
As to when FID might occur, “we would probably see that at the earliest later this year and more likely early next,” Olds said.
He said a winter 2022-23 construction season would occur “assuming we had a very favorable record of decision,” allowing the company “to do civil construction and start putting roads in place for the project.”
Olds said ConocoPhillips continues to do detailed engineering “to refine cost and schedule, as well as the final development modifications.” Modifications are necessary, he said, because of Alternative E, which responds to the court order. “And that is to minimize or reduce the surface impact on the Teshekpuk Lake Special Area. So that alternative, we think, is a good path forward.”
Olds said Alternative E “reduces the surface infrastructure and still maintains the estimated recoverable resources that we communicated in the market update of about 600 million barrels,” 180,000 barrels per day gross before royalty.
ConocoPhillips remains committed to Willow, which “remains competitive in the portfolio,” and continues to have, he said, “very strong stakeholder support, including the Alaska congressional delegation, the trades, and unions.”
Congressional delegation urges BLM On Sept. 20, 2022, U.S. Senators Dan Sullivan, Lisa Murkowski (both R-Alaska) and Representative Mary Sattler Peltola (D-Alaska), sent a letter to Secretary of the Interior Deb Haaland urging BLM to complete the permitting process for the Willow Project in the National Petroleum Reserve in Alaska by the end of the year, in time for the winter construction season.
In their letter, the Alaska congressional delegation noted that the project has been developed under the strictest environmental standards in the world and is strongly supported by Alaska Native leaders, labor leaders, the state of Alaska, legislators from both parties, and President Joe Biden.
“The expeditious approval of this crucial project would greatly benefit Alaska, our nation, and the world, while demonstrating the Administration’s commitment to addressing inflation, high energy costs, the need for greater energy security, and environmental justice initiatives,” the delegation wrote. “After years of study and review, both the Administration and Alaskans can feel confident that the Project will abide by the strictest environmental considerations in the world, while being constructed and operated by a company with an impressive record of safe and responsible development on the North Slope.
“We believe the final SEIS should identify the preferred alternative; appropriately weight the purpose of energy production in the NPR-A; and recognize the public interest in supporting energy security and responsible resource development. The permitting process must be completed by the end of 2022 at very latest so the project’s proponent can make a final investment decision and hire Alaskans in time for the winter construction season. That decision will not be possible, and none of those jobs will be created, in the absence of a clean and timely Record of Decision (ROD).”
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