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EXPLORERS USA 2005: ANWR: Many years of study, many unanswered questions
Until the U.S. Department of the Interior released its 1998 petroleum assessment of the Arctic National Wildlife Refuge’s 1002 area, the bulk of the oil in the coastal plain was thought to be in the deformed (structural) eastern region vs. the undeformed (stratigraphic) western region.
“More oil has been allocated to the younger (Brookian) reservoirs in stratigraphic traps; less oil has been allocated to the deeper Ellesmerian reservoirs in structural traps,” said Ken Boyd, director of the Alaska Division of Oil and Gas at the time. Boyd testified before the U.S. Senate Energy and Natural Resources Committee following the release of the 1998 evaluation in which the U.S. Geological Survey assessed in-place 1002 resources and the Bureau of Land Management determined recoverable resources, each consulting with the other.
Viewed as the most exhaustive study of the 1002 area’s geological potential to date, the 1998 Interior evaluation increased the mean (50 percent probability) estimate of in-place reserves from 13.8 billion to 20.7 billion barrels of oil. And even though Interior used a conservative oil recovery rate which was 33 percent lower than that at Prudhoe Bay, and assumed it would take a 512 million barrel field in the 1002 area to be commercial vs. a 100 million barrel in the central North Slope, the 1998 recoverable oil estimates were still impressive, set between 5.7 billion and 16.0 billion barrels (95 percent and 5 percent probability range), with a mean value of 10.4 billion barrels.
The increased numbers for the western part of the 1002 area were not disputed by industry or the state of Alaska. They came in part as a result of several new discoveries on the North Slope since 1987. Eastern decrease disputed But the 1998 decrease in estimated recoverable reserves for the eastern part of the area, which USGS research geologist Dave Houseknecht said indicated a questionable presence of Ellesmerian reservoir rock in the east were questioned.
Even though they were forbidden by a Supreme Court order from talking about it publicly, the organizations that questioned the 1998 assessment were the agencies and companies who had access to the most important geological data from ANWR — the results of the only well drilled onshore in the 1002 area, the KIC No. 1. Interior officials at USGS and BLM did not have access to the KIC well data.
The KIC No. 1 was drilled in the eastern deformed area north and a little west of the Niguanak High, a geologic structure that previous Interior studies credited with something like 75 percent of the 1002 area’s mean estimated reserves — i.e. 10 billion barrels of oil as compared to the 1.2 billion barrels in the 1998 assessment. (With the inclusion of the 1987 reserves from the eastern part of the 1002 area, the total 1998 mean estimate would have been closer to 30 billion barrels of oil in place.) Drilled to a depth of 15,193 feet at a cost of more than $40 million, the KIC well was drilled over two seasons by the predecessor companies to BP and ChevronTexaco, which lease 92,000 acres of Native land within the 1002 area.
Chevron is operator of the 50/50 partnership with BP on the 1002 acreage. The Native regional corporation for northern Alaska, Arctic Slope Regional Corp., owns the subsurface oil and gas mineral rights and the village corporation in the area, Kaktovik Inupiat Corp., owns the surface, hence the name KIC. Suit kept well results confidential Chevron, BP and ASRC unsuccessfully sued the state in 1988 to keep the KIC well results confidential, claiming among other things that “three-fourths of the land located within three miles” of the well was unleased.
As a result, in addition to BP, Chevron, and ASRC a handful of state of Alaska geoscientists have also seen the KIC well data.
While not alluding directly to the KIC well, what have these “in-the-know” folks said about the devaluation of the petroleum resources in the eastern 1002 area and the potential of the 1002 area as a whole?
The strongest public statement came in a carefully worded statement from BP spokesman Paul Laird to Petroleum News following release of the 1998 assessment. He said Interior “did not have sufficient data to substantiate the conclusion, or to justify the conclusion, that most of the potential is in the western 1002 area” and he re-stated BP’s “belief in the prospectivity of the eastern 1002 area, as well as our belief in the western 1002 area.”
Neil Ritson, exploration vice president for BP in Alaska, was quoted in the same time period in a press release about BP and Chevron’s renewal of the 92,000 acre ASRC lease as saying, “ANWR offers the greatest potential for a world-class oil discovery on the North Slope.”
Quoted in the same press release Dave Birsa, Chevron exploration manager for Alaska, said what state geoscientists have continued to echo: “The ANWR coastal plain … is on trend with the prolific oil fields of the central North Slope and has significant geological potential.” Boyd: Barrow Arch points at ANWR Boyd, who has seen the KIC well results and was a member of the industry team that designed the only seismic program shot in the 1002 area (winter 1983-84), agrees.
He, like other state geoscientists who have seen the KIC well results, won’t talk about them, but he will talk about what he calls “common sense” trendology.
“Trendology clearly shows that the Barrow Arch is pointing right at ANWR. … And, if it is, just on the basis of this trend, you’d have to be nuts to look at that and say the oil must stop right here, on the edge of ANWR.” Traditional exploration plays in northern Alaska have tended to focus on the Barrow Arch, a subsurface tectonic bump that runs southeast from Barrow, parallels the Arctic coastline, goes right through Prudhoe Bay and has been proven to extend to the edge of ANWR.
“The Barrow Arch has proven to be the major oil feature in Alaska since the discovery of Prudhoe Bay … NPR-A, Northstar, Kuparuk, Prudhoe — all these discoveries and more — have been associated with the arch,” Boyd said.
“This is why Congress set aside this million and a half acres (1002 area) out of this nineteen and a half million acres (ANWR). They set it aside to evaluate it for its oil and gas potential. … They set it aside because it’s on-trend with some of the biggest oil fields in North America.” Preference for stratigraphic well off eastern In 2003, when Mark Myers, current director of the Alaska Division of Oil and Gas and also privy to the KIC well results, put together a plan for drilling a stratigraphic well on state lands offshore the 1002 area, his preferred location for a test well was in the eastern deformed area, east of the KIC well and just north of the Niguanak High. (See details at og.dnr.state.ak.us/oil/products/slideshows/stratigraphic/alaska_stratigraphic_test_well.pdf)
In Interior’s 1998 assessment Houseknecht said USGS recognized the big structures in the east but assigned a “large uncertainty” there, “so even though the mean value was relatively low, there is good upside potential. … The bottom line is that we assessed more oil in the stratigraphic plays than in the structural plays.”
He said “it’s important to distinguish between the results of our assessment and what may or may not happen at a lease sale if and when the 1002 area is opened. The oil industry had demonstrated worldwide time and time again that it will assume a lot of risk in testing big structures — like those in the eastern 1002 area. And, those structures are so large that they are well defined, even with the relatively poor quality two-dimensional seismic data (1,500 miles of total 2D) that exists in the 1002 area. And, while the existing 2D seismic data are sufficient to define the general trends of the stratigraphic plays in the western 1002 area, the definition of specific prospects would be difficult in the absence of 3D seismic data.”
Oil from ANWR’s 1002 area would be shipped down the trans-Alaska oil pipeline about 70 miles to the west.
—Kay Cashman
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