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State approves contraction of Badami sands participating area Formed at 12,737 acres, area currently under production will be reduced to 3,680 acres; BP says no new wells planned Kristen Nelson PNA News Editor
Faced with disappointing production results from the Badami field east of Prudhoe Bay, BP has applied for and the Division of Oil and Gas has approved a major contraction of the Badami sands participating area, the producing area at the field.
The state approved the initial Badami plan of development in 1997. At that time, BP planned to drill 38 development wells, 20 production wells, 15 water/miscible fluid injection wells, two source water wells and one Class I waste disposal well.
The state approved formation of the Badami sands participating area in 1998, with the condition that by June 26, 2000, BP would submit an application for expansion or contraction of the participating area so that it would include only land underlain by hydrocarbons and estimated to be capable of producing hydrocarbons in paying quantities. The original participating area contained 12,737 acres. It is being contracted to 3,680 acres.
The division noted in its Oct. 25 contraction approval that the Badami facilities were designed to provide full processing and export capabilities to support a hydrocarbon liquid production rate of 35,000 barrels per day and were also planned to process 22.5 million standard cubic feet per day of produced gas, 13,600 barrels per day of produced water and 30,000 barrels per day of source water. BP says it's not giving up “We've not given up on Badami,” BP Exploration (Alaska) Inc. spokesman Ronnie Chappell told PNA Nov. 13. He said that the company's evaluation of the Badami sands, “the production experience that we've gained there and the work that we've done there to date, has led us to conclude that additional drilling in the Badami sands is not justified at this time.”
BP will continue to operate the field “as long as we can do so safely and economically,” Chappell said.
If production levels decline, he said, the possibility exists that BP will do a warm shutdown at the field as it did two years ago when production volumes were not sufficient to allow continued operation of the pipeline.
Chappell said BP is “also looking at other opportunities for developing production in the area outside of the Badami area.” Geology complicated “The geology of the area is very complicated and it had not been thoroughly explored when BP applied to form the BSPA,” the state said in its Oct. 25 approval of contraction. It was understood at the time that the participating area was formed that some of the tracts “may not be underlain by hydrocarbons and the reservoir may not be continuous across the field,” the state said. “We also understood that BP might not drill some of the proposed wells and that others may have discouraging results.”
The agreement between the state and BP was that production was to be allocated only to tracts with producing wells.
BP drilled eight wells in the first year of operation and production began in August 1998. Royalty reports indicated that three of the wells produced hydrocarbons in August 1998.
In the fall of 1999, BP advised the state that the pace of development drilling was slower than anticipated and that start-up production was less than facility design capacity. The production rate declined to 2,500 barrels a day and BP shut in the field between February and May 1999, eliminating the risk of freezing the Badami pipeline.
BP had arranged to buy gas from the Endicott oil pool to supply Badami with fuel gas and source gas for enhanced oil recovery operations and while gas was first injected at Badami in small quantities in December 1998, sustained gas injection was not established until May 1999. Only nine development wells drilled By the time BP submitted a third plan of development on June 23, 2000, the company had drilled only seven producing wells and two injectors. “Poor hydrocarbon communication and high gravity oil within the reservoir resulted in low production rates and BP's decision not to drill additional delineation wells in the BSPA,” the state said.
The Badami sands participating area had produced 2.3 million barrels total through May 2000, and production had averaged 2,000-3,000 barrels a day over the previous year.
The state said that wind-induced vibrations caused a crack in the gas supply line from the Endicott facilities in 1999. Gas pipeline operations were discontinued and the state said BP has no plans to return the gas supply pipeline to service.
“The drill rigs have been removed from the unit area and BP has no plans for further drilling or development of the Badami Reservoir,” the state said.
Under the proposed third plan of development, “BP will continue production as long as production rates and temperatures remain at safe and economic levels. If production is shut-in to protect the pipeline due to low production during low temperatures, or in the event of difficulties with well or plant operations, BP will evaluate restarting operations if other unit or non-unit fluids can be brought into the facilities.”
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