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Enhanced oil recovery under way at Endicott east of Prudhoe Work continues on EOR skid at offshore North Slope field; upgrades to compressors will allow more gas to be handled as field ages Kristen Nelson PNA News Editor
What are expected to be the last major facility investments at the Endicott oil field have been made. Those investments, in enhanced oil recovery and in upgrades to the gas compression trains, will help field operator BP Exploration (Alaska) Inc. maximize production from the field east of Prudhoe Bay — and manage the field’s long decline.
Once those projects are complete, BP Exploration (Alaska)’s Simon Potter told PNA in a recent interview, emphasis at the field will focus on intellectual rather than capital investments, with a view toward managing the tail of the field’s production economically.
Endicott, said Potter, BP’s manager of producing fields, eastern North Slope, is typical of a gas cycling reservoir. Production at this type of field, he said, first peaks, then declines rather steeply and finally flattens out and continues at reduced levels for quite a long time. A graph of field production rises, drops to a point and then trails off with a long tail. Endicott, he said, is probably just approaching that long tail.
Production began in 1987 from the Kekiktuk formation reservoir at the field and peaked at 110,000 barrels of oil a day in 1992. Last year Endicott produced about 52,000 barrels a day, Potter said, down from 60,000 barrels a day in 1997. Production is expected to average about 48,000 barrels a day this year, he said.
State forecasts for Endicott estimate that production will fall 30,000 barrels a day in 2006 and be about 14,000 barrels a day in 2019.
EOR began last fall Enhanced oil recovery at Endicott began in October, and Potter said work was continuing to maximize performance from project equipment. Fine-tuning work on the EOR equipment was completed in April.
BP Exploration (Alaska) said last spring that the $37 million EOR project was expected to add 22 million barrels of recoverable oil reserves and to ultimately boost oil production by about 5,000 barrels a day. A gas-based solvent is manufactured, compressed, distributed and injected into the reservoir to flush more oil from pores in the reservoir rock. The project required a new compressor train, manifolds and well tie-ins on the main production island and satellite drilling island and a pipeline between the two islands.
“It’s an alternating water and gas scheme,” Potter said. Miscible injectant — the solvent — is injected into the reservoir to mobilize oil and then water is pushed through behind to move oil to the producing wells. The process, water alternating gas or WAG, continues in miscible injectant and then water cycles.
EOR produces more oil, uses up some gas Both waterflood and gas lift have used at Endicott since the beginning of production, Potter said. Waterflood includes re-injecting all of the produced water along with enough sea water to make up for the volume of oil produced. At some point, he said, Endicott production will be constrained by the amount of water the facility can handle. “But we’re not water constrained at the moment,” he said. “Right now we’re gas constrained.”
“So the EOR scheme has two benefits,” Potter said. “It consumes some more gas as well as allowing us to put miscible injectant into the reservoir and the latest phase is the gas compressor upgrade so we can gradually handle more and more gas.”
The EOR miscible injectant is a mixture of gas and light ends from the oil stream. It’s a bit of a tradeoff, he said: “You take something away (from the oil stream) and invest it in the reservoir to get more later on.”
Gas compressor upgrade Endicott wells now produce a lot of gas and all of that gas is cycled and put back down into the reservoir.
“So the thing that constrains production the most is our gas handling capacity,” Potter said. “So every little bit of extra gas handling capacity we can get we can produce another well which brings oil with it.”
There are two main gas compressor trains at Endicott and they are currently being upgraded so that they can handle more gas. The compressors function more effectively in cold weather, so there is as much as a 20 percent swing between gas-handling capacity in summer and winter. The upgrade to the main gas compressor train will allow more equal gas handling between cold and warm weather, “so it flattens out our production profile across the year,” Potter said.
The upgrade involved installing larger turbines and the compressor trains had to be shut down to do the work. One train was done in late winter and the second in the spring. Potter said that lifting out the turbine and putting a bigger turbine in had to be done within the module and they couldn’t just lift a turbine out and drop it down. Before the new turbine could even be brought in, the floor had to be strengthened. The compressor trains had to be shut down to test the hoists.
The B train was to be shut down for 22 days, and Potter said in March that after that was complete there would be a two-week break and a review of the process before the A train turbine was replaced. Potter said he hoped that with lessons learned from the first one, the second would go more quickly. “Because,” he said, “when the gas train goes down, I lose half of my gas handling capacity” so the wells producing the most gas all have to be shut off. Work on the second gas compression train upgrade was to be complete by mid-May.
Intellectual capital rather than capital dollars With Endicott production in decline, cost control becomes crucial, Potter said.
“Obviously as the barrels fall away in a mature oil field, then the amount of money that you have to spend on the facility also declines,” he said. “So it’s in a difficult phase whereby with the reservoir falling away, costs have to be cut in order to maintain profitability. If we sat there with a stable operation in cost terms, with the barrels … as low as the oil price is at the moment … it would gradually eat our lunch.”
Potter said that, on the other hand, there are only so many things you can invest in. “And we’ve reached a point now where we’ve kind of got everything that we need. … So we’ve got a bit of a hiatus now after we’ve upgraded the gas compressors, after we’ve commissioned the EOR project, infill drilling is halted for the moment.”
Emphasis now, he said, will be on managing lifting costs and trying to “arrest the decline in the reservoir with what we tend to call intellectual capital rather than capital dollars. So we use reservoir engineering, reservoir modeling, production engineering — so there’s quite a premium on the people. And producing from the right wells at the right time. Having those wells and the equipment tuned and running 100 percent of the time.”
“But I think if there’s one thing it’s focus — it’s focusing the minds of the people at Endicott on getting the right wells on at the right time, keeping the equipment running efficiently, keeping our lifting costs down. It’s focus in the reservoir groups to focus on actually producing from the right intervals in the right wells at the right time. So it’s a big team effort to arrest production decline and maintain costs — all without the input of dollars capital.”
Generating some cash Once present projects are completed, Potter said, “we will be in a stage of maturity where we are looking just to generate net income and cash for the business.” Funds generated at Endicott “can be reinvested either in Alaska or elsewhere in the business portfolio,” he said.
“And that’s just a characteristic of a big international oil company,” Potter said. “You can generate money in one environment and either return it to that environment with competitive new barrels or in the way that the business is at the moment you can move your marginal dollar anywhere in the globe and invest it elsewhere. So that’s a key thing for Alaska, is to remain competitive in a global sense.”
Capacity available for satellites Potter said that with reduced production from the main Endicott reservoir there was also the opportunity for satellite production at the facilities. Two wells, he said, are now producing from the Eider field — a 100 percent BP-owned satellite. BP, Exxon and Unocal are the major Endicott owners.
The Eider satellite requires 20,000-foot step-out wells, Potter said. They are extended reach wells, he said, although they don’t extend out as far as the Niakuk wells, and certainly, he said, don’t compare to the wells at Wytch Farm in England which are now heading for 35,000 feet out from the drill site.
Potter said that there are no plans to drill more Eider wells in the short term. There are a number of prospects that sit out there, he said, and Doyon Drilling’s rig 15 is at Endicott. “So if the environment picks up and the other Endicott prospects are competitive — again, in a global sense — then we could pick them off as we would wish.”
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