Investments mitigate declines Drilling offsets declines, but Kuparuk River POD shows continued production drop Eric Lidji For Petroleum News
The Kuparuk River unit is central to ConocoPhillips’ recent promises to increase spending in Alaska in the wake of a major revision to the state oil production tax code.
Over the past 18 months, the largest producer in Alaska has sanctioned work on many of its North Slope properties - including construction of the CD-5 pad at the Colville River unit, plans for developing the Greater Mooses Tooth unit in the National Petroleum Reserve-Alaska and expenses as a non-operating partner at Prudhoe Bay.
The investments planned for the Kuparuk River unit are different.
CD-5 and Greater Mooses Tooth are efforts to extend the western edge of the North Slope infrastructure grid, which should lower the cost of development in the region.
At Kuparuk, ConocoPhillips has been undertaking a series of investments designed to increase oil production rates - or at least mitigate declines - at an existing field.
The current expenses at the BP-operated Prudhoe Bay unit are simply the price ConocoPhillips must pay to participate in the largest oil field in North America.
At Kuparuk, ConocoPhillips is the operator.
The investments at Kuparuk include infrastructure-led exploration, new or expanded drilling pads, newly commissioned drilling rigs and a proposal to increase well counts.
ConocoPhillips expects production to be flat by 2017.
So far, those efforts appear to be having a greater impact at the four Kuparuk River unit satellites than at the main Kuparuk field, according to the most recent plan of development for the unit, which ConocoPhillips submitted to state officials in mid-June.
Increased drilling Sinclair Oil and Gas discovered the Kuparuk River oil pool in 1969. The field was remote at the time and geologically tricky compared to nearby Prudhoe Bay. ARCO Alaska sanctioned development about a decade later, prompted by rising international oil prices.
Through mergers and acquisitions between 1999 and 2002, ConocoPhillips became the operator of the Kuparuk River unit. Today, ConocoPhillips owns a 55.3 percent interest in the main field, with BP Exploration (Alaska) Inc. owning 39.2 percent, Chevron U.S.A Inc. owning 4.9 percent and ExxonMobil Alaska Production Inc. owning 0.6 percent. The same four companies own the Kuparuk satellites, albeit in slightly different percentages.
Since Kuparuk production peaked at 339,386 barrels per day in December 1992, activities have included infill drilling, satellite development and enhanced oil recovery.
In 2014, oil production declined even though drilling increased.
At the end of last year, ConocoPhillips was developing the main Kuparuk field with 835 active wells at 44 drill sites, according to the June 2015 plan of development. By comparison, the Kuparuk field had 817 active wells at 44 drill sites at the end of 2013.
The Kuparuk participating area produced 83,200 gross barrels per day in 2014, down from an average of 85,700 gross barrels per day in 2013, according to the company.
The increase in drilling mitigated the decline to some degree.
ConocoPhillips drilled 26 wells in the Kuparuk participating area last year - eight rotary wells and 18 coiled tubing sidetracks with a total of 40 laterals. The program added some 3,500 gross barrels of peak incremental oil production per day, according to the company.
The sidetracks were generally scattered throughout the field. The new wells included four at Drill Site 2E, two at Drill Site 2K and one each at Drill Site 2F and Drill Site 2M.
These figures continue a recent trend of increased drilling and declining incremental production from the main Kuparuk field. By comparison, the company drilled 15 wells with 41 laterals at the Kuparuk field in 2013, adding some 4,520 gross barrels of peak incremental oil production per day, and drilled 14 wells with 53 laterals at the Kuparuk field in 2012, bringing some 5,050 gross bpd of incremental production online.
This year, ConocoPhillips expects to drill 23 wells at the Kuparuk field - seven new rotary wells and 16 coiled tubing sidetracks. Those figures represent a decline from 2014.
The new wells are mostly associated with Drill Site 2S. The company is currently developing the drill site in the southwest corner of the unit with plans to bring production by the end of the year. DS-2S will be the first new drill site at the unit since 2003.
The proposed sidetracks are scattered throughout the unit.
In 2014, ConocoPhillips also added 3,360 gross barrels per day through a rigged workover program and another 10,600 gross barrels per day through a rigless workover program. Those figures are up from 2013, when the company added 2,601 gross bpd through a rigged workover program and 10,300 gross bpd through a rigless program.
Injections changing Aside from increased drilling, the two biggest developments at the Kuparuk field in 2014 were changes to the miscible injection program and an expansion of seismic activities.
The main Kuparuk field had waterflooding at 24 drill sites (up from 18 in 2013), immiscible water-alternating-gas at 17 drill sites (up from two in 2013) and no miscible water-alternating-gas (down from 24 in 2013). Currently, miscible injection is unavailable for technical reasons. ConocoPhillips said it intends to continue miscible injection programs at four dill sites - 1B, 1C, 1D and 1E - using indigenous supplies.
In July 2014, ConocoPhillips stopped importing natural gas liquids used for the operations from the Prudhoe Bay unit and planned to convert the Oliktok Pipeline to instead import fuel gas from Prudhoe. ConocoPhillips expects to complete the necessary modifications at Central Processing Facility No. 1 and No. 2 by the end of this year and complete similar work at Central Processing Facility No. 3 by the end of 2017.
This change has impacted development at the satellites, as well as at the main field.
Seismic expanding Another major effort last year was seismic acquisition.
Over the past decade, ConocoPhillips has been relying heavily on seismic data to help identify potential targets for additional development within the existing Kuparuk unit.
In 2014, the company completed 4-D processing over a 60 square mile area of the field and licensed a 47 square mile speculative 3-D survey in the northern end of the unit.
The company also undertook four seismic reprocessing efforts last year.
The WBA/Kalubik Depth Migration project will “better image” the western side of the Kuparuk field. The company expects to complete the project in the third quarter. The KRU-KWS 4-D project is reprocessing overlapping portions of the KRU 3-D program from 1990 and the KWS 3-D program from 2005. The KWS Structural Reprocessing project is considering a different aspect of the data. Preliminary interpretation is under way on both projects. The KRU 3-D Depth Migration project is improving imagining along the periphery of the field and should be completed late this year.
|