|
Watch this, says Steve Marshall
Petroleum News Alaska Staff
Alaska will never see this again, said Steve Marshall, president of BP Exploration (Alaska) Inc., holding up — and shaking — a full container of cola.
He was illustrating Prudhoe Bay at the beginning of production: full and easy to produce.
He then held up a container only partially full of what appeared to be maple syrup.
“This is Prudhoe Bay on decline,” at said at the Alaska Oil and Gas Association-Anchorage Chamber of Commerce July 15 presentation.
“Less oil; less production; harder and more expensive to get out; higher unit costs; aging infrastructure,” Marshall said of that second container.
But even on decline, he said, Prudhoe Bay reserves are the single largest source in Alaska — and in the entire United States: the 3 billion remaining barrels in Prudhoe and its satellites are “greater than the remaining reserves in the next nine largest fields combined.”
But the problem of all mature fields is that pressure to reinvest bumps up against more marginal returns on investments, Marshall said, and “per-unit cost grows, even as the imperative to reduce costs increases.”
Even as BP looks for ways to reduce costs, investment is necessary, Marshall said: to stave off natural field decline, and to maintain and upgrade infrastructure which “will be valuable in sustaining production for the next 20, 30, 40 years, and will facilitate gas production.” Technology increases productivity The field’s owners also invest in new technology to increase productivity. An example of new technology, Marshall said, is the completion of the first tri-lateral well at Prudhoe Bay: “One well with three different branches. It generated a four-fold increase in production over a conventional well and with a significant reduction in cost per barrel.” (See story page 19)
Marshall said technology advances have increased estimated recovery from Prudhoe from less than 40 percent at startup “to 50 percent a decade later and now we’re looking at 55 percent or even higher.”
But cost reduction from BP, its contractors and its suppliers isn’t the only thing that influences Prudhoe Bay’s ability to compete for needed investment dollars.
“The state is a huge stakeholder, too,” Marshall said. “So we need to take a proactive role in promoting fiscal and regulatory regimes that will enable the state and the industry to achieve mutual goals.”
Those mutual goals, he said, include long-term viability at Prudhoe, both for its remaining reserves and for the basis it provides for a future gas pipeline project.
| 