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BP takes over Sandpiper Unit next to Northstar gets new operator; three-year plan of operations approved by MMS earlier still in effect, requires well in 1999-2000 winter season Kristen Nelson PNA News Editor
The Beaufort Sea Sandpiper unit northwest of Northstar is now owned 50 percent by Northstar-operator BP Exploration (Alaska) Inc., giving the company an additional oil accumulation which could be processed through facilities planned for Northstar.
Sandpiper continues under a three-year plan approved by the U.S. Department of the Interior’s Minerals Management Service for previous operator Murphy Exploration & Production Co. That plan requires permitting to begin next fall for a well to be drilled in the 1999-2000 winter season.
Murphy and Petrofina Delaware Inc. were the previous unit owners. With BP’s 50 percent interest, Murphy’s interest has been reduced to 28 percent and Petrofina’s interest to 22 percent.
Two wells drilled from a gravel island in 1985 and 1986 found oil. The wells were abandoned in 1988 due to extensive storm damage to the island and prevailing market conditions. The Ivishak formation is the primary reservoir for the Sandpiper discovery, which includes 51 degree API gas/condensate and 41 degree API oil. Flow rates were approximately 12 million cubic feet per day of gas, 1,700 barrels of condensate per day and 2,400 barrels of oil per day.
The Sandpiper unit, like Hammerhead and Kuvlum, is being operated under a suspension of production notice due to poor economics for development and lack of infrastructure.
In the second plan of operation, approved in 1997, Murphy told MMS that “the most economically attractive conceptual plan for possible development of the field is to construct a gravel island on Loon Shoal with minimum process facilities.” Three phase production (oil, gas and water) would be piped to BP’s Northstar facility for processing. Water injection would be used to maintain reservoir pressure.
Murphy estimated that Sandpiper would have peak daily production rates of 8,000 barrels of oil and 50 million standard cubic feet of gas and a field life of 24 years.
Total recoverable liquid reserves are estimated in the 47 million barrel range. Seismic, well part of current plan A second option, considered less economic, would have put fully manned production facilities on Loon Shoal and included a sales quality oil pipeline to shore. As part of this plan, reservoir pressure would have been maintained by both water and gas injection. Part of the Murphy-Petrofina three-year operating plan was acquisition or purchase of 3-D seismic over the unit. BP shot 3-D seismic in the 1996 season and Murphy and Petrofina were negotiating to acquire that seismic before BP took over as operator.
BP has told MMS that they plan to submit an exploration plan for approval during October 1999 and to seek approval of a third plan of operations if drilling a well in the 1999-2000 winter season doesn’t prove feasible. MMS, however, told BP that the agency believes the company has “more than reasonable time” under the suspension of production to plan and permit the well and said it expected BP to meet this work commitment.
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