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Massive resource: Prudhoe, Kuparuk dominate North Slope oil production
With hydrocarbons equivalent to around 80 billion barrels of oil discovered on the North Slope and much of this resource yet to be produced, the region remains a premier oil and gas province, Dave Lachance, vice president, reservoir development, for BP Exploration (Alaska), told the Resource Development Council’s annual conference on Nov. 20. And around three-quarters of that discovered resource sits in two primary fields: Prudhoe Bay and Kuparuk, Lachance said.
“As go Prudhoe and Kuparuk, so goes the North Slope,” he said.
Economic underpinning While the Kuparuk field, by itself, is massive, the Prudhoe Bay field, with around half of the total discovered hydrocarbons, has provided the economic underpinnings of all North Slope development.
“It’s the reason we have the North Slope. It’s the reason we have the (trans-Alaska) pipeline. It’s what set everything up,” Lachance said. “When you have something of that magnitude, that size and that value, it enables the spending and the infrastructure, the people and the development to go up above the Arctic Circle and put all that equipment in place.”
Increasing recovery With an especially benign underground oil reservoir that can enable oil to flow at prodigious rates from oil wells, coupled with modern production techniques, the Prudhoe Bay field has delivered some 45 percent of its original oil resource, Lachance said. And BP anticipates upping that recovery factor to more than 50 percent in the future he said.
“We have the plans in place. We have a means to produce the reservoir. We have an idea how we’ll get there,” Lachance said.
On the other hand, with a more challenging, compartmentalized reservoir, oil recovery from the Kuparuk field currently sits at around 30 percent: ConocoPhillips is working hard to push that up to around 50 percent, Lachance said.
The use of techniques such as coiled tubing drilling enable the application of science to thread wells into isolated pockets of the oil reservoir, to access some of that remaining oil.
“The trouble is, that’s expensive, but it allows us to hit the pockets of the reservoir once we figure out where to go,” Lachance said.
Tax change Lachance also commented that the recent revision to the Alaska production tax law — the passage of the tax bill titled Senate Bill 21 — has encouraged BP and its partners to ramp up their operations to develop more of the remaining Prudhoe Bay oil. The North Slope operations create many employment opportunities: BP currently has 2,300 direct employees in Alaska and generates more than 20,000 contractor jobs in the state, he said.
“In 2012 in Prudhoe Bay we were operating five drilling rigs. By the end of 2016 we’ll be operating nine. We didn’t have complete compliance with our partners at Prudhoe until the passage of SB21,” Lachance said.
The production from Prudhoe Bay since the field went into operation 35 years ago has consisted essentially of light oil. But huge quantities of thicker oils — viscous oil that flows like syrup and heavy oil with a consistency more like yogurt — remain to be developed. In fact, the light oil produced to date only represents about a quarter of the total North Slope oil discovered, Lachance said.
BP has been producing viscous oil at Prudhoe Bay and ConocoPhillips has been producing the same resource at Kuparuk. But neither company has yet figured out a means of viably producing the heavy oil, a resource that Lachance characterized as “the big prize.”
“We haven’t even really cracked how to produce the heavy oil yet,” Lachance said. “It’s not really economic at this time. We’re certainly doing quite a lot of work around it. We’re moving in that direction.”
There is also development potential in some smaller and shallower oil reservoirs at Prudhoe, he said.
Slowing the decline And, although production from the aging Prudhoe Bay will inevitably continue to decline, continuing development efforts can slow the decline rate, Lachance commented.
“We can’t stop the decline. We’re producing a diminishing resource,” Lachance said. “But we can substantially change the inflexion of the curve and we can move into some of those areas, the viscous and the heavy oil, the more isolated light oil, and work our way through to development and increased recovery across the field.”
And, with changing patterns of oil production at Prudhoe Bay, BP is evaluating the potential of more than $3 billion of additional investment in the field’s surface infrastructure, adding a couple of new drilling pads and changing some surface kit, he said.
Natural gas North Slope natural gas, a resource that in terms of barrels of oil equivalent represents something in excess of 20 percent of the total discovered hydrocarbon resource, is of great importance as a source of energy for producing oil and for fueling the North Slope infrastructure, Lachance said. The amount of gas currently produced at Prudhoe Bay and mostly recycled through gas compressors would be sufficient to feed more than 10 typically sized liquefied natural gas plants elsewhere in the world, he said.
And, with any liquefied natural gas plant being completely dependent on a very stable and reliable gas supply, the abundance of gas in the Prudhoe Bay and Point Thomson fields on the North Slope means that the gas supply situation is the least questionable aspect of proposals for exporting gas from the Slope to an LNG plant in Southcentral Alaska, he said.
Overall, with such a massive hydrocarbon endowment, BP thinks that Prudhoe Bay and the fields around it could still be on line and operating perhaps 36 years from now, Lachance said. But those operations will be different from what happens nowadays, with much of the original light oil depleted and production more focused on the more difficult products, the viscous oil, the heavy oil and the gas, he said.
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