|
THE EXPLORERS 2005: BP focuses on known resources in Alaska Company major investor on North Slope; Marshall says worldwide exploration efforts focused Kristen Nelson Petroleum News
BP is the largest investor in Alaska North Slope oil and gas: but not in exploration projects.
Internationally BP is very focused on where it explores, BP Exploration (Alaska) President Steve Marshall told the Alaska Support Industry Alliance in early September.
“It’s about choices,” he said.
BP has become “absolutely ruthless” in recent years about its exploration focus, he said.
Marshall related that in 1990, when John Browne took over BP’s exploration and production division, BP was “exploring in 35 countries. We were even exploring in downtown Paris. … There were actually rigs in downtown Paris. We didn’t find anything,” Marshall said, but a lot of money was spent. “And we did that in many, many places.”
Today the company’s exploration efforts are focused in a handful of places: Angola, Trinidad, the deepwater Gulf of Mexico, Indonesia, Azerbaijan and some emerging areas such as China.
“So we’re incredibly disciplined. And the threshold for us to get into exploration is incredibly high.”
BP no longer explores in Alaska, and might look at the state again, Marshall said, “but I don’t see that being tested right now.”
Focus on development technology BP’s current focus in Alaska, he said, is on “developing the technologies, the ideas, the capability to unlock the 5.7 billion barrels” of known oil on the North Slope, with infrastructure available.
“That’s where BP’s focus is” in Alaska, he said.
Only in Russia does BP have more oil and gas in its portfolio than it does in Alaska, he said. “We’ve got well in excess of 5 billion barrels of oil and gas equivalent sitting on our books, already discovered.”
Much of it is “hugely challenged — technically we don’t know how to do it,” he said.
This known resource, Marshall said, provides BP with “a 50-year future” in Alaska.
“Even in 2050, we still have 2 billion barrels of oil and gas yet to produce,” company projections show.
Heavy oil; and Ugnu BP is producing heavy oil on the North Slope right now, the deeper viscous oil, but the shallower Ugnu formation, which is just below the permafrost represents a real challenge, Marshall said.
BP believes it can produce perhaps 8 percent of the Ugnu, but in Canada they’re producing close to 50 percent “from that same kind of oil,” but without the challenge permafrost presents, and without the extremes of weather Alaska gets on the North Slope.
Marshall said possible technology to produce the Ugnu formation includes steam, bacteria and carbon dioxide. If the technology issues around Ugnu can be solved, “that could be a huge business for many, many years to come, well beyond 2050,” he said.
While the technology is a challenge, Marshall said “Alaska’s got a tremendous legacy of innovation … (which) gives us the confidence that we’re going to be able to attack those problems in the future.”
BP invests in excess of $600 million a year in Alaska in capital, Marshall said, and in excess of $700 million a year as BP’s share of operating costs, with a capital spend of $10 billion to $15 billion expected over the next 10 to 15 years, including BP’s share of the gas pipeline.
“We’re investing continuously,” he said. “What you don’t see right now are big projects — the banner projects that we’ve enjoyed in the past that have really tantalized the impaction.
“But what we do see are the 100-plus wells we drill year-in, year-out, just to keep production as stable as we possibly can.”
North Slope production is declining, “but we’re doing everything we can to attest that decline.”
Multi-laterals producing viscous Producers on the North Slope — BP at Prudhoe and Milne Point and ConocoPhillips at Kuparuk — are working to reduce the production decline with viscous oil, the accumulations of oil in the Schrader Bluff/West Sak formation that are shallower than conventional oil, but deeper than the Ugnu. Viscous oil is harder to produce. It is found in less consolidated reservoirs so solids are produced with the oil. It is also colder because it is closer to the permafrost and thicker so it doesn’t flow as easily as the deeper oil.
BP is pushing the technology envelope at its Prudhoe Bay viscous oil satellites, drilling multiple horizontal lateral legs from single well bores to access as much reservoir sand as possible.
Progress has been steady: BP drilled the first trilateral well on the slope in 2003, the first quadrilateral in 2004 and the first pentalateral in 2005.
The five horizontal laterals in the S-213A at Polaris, a Prudhoe satellite, access 27,000 feet of reservoir.
Gil Beuhler, BP’s Prudhoe Bay satellite development manager, told Petroleum News in May that the well came online in March at some 3,500 barrels per day, with long-term flow rates expected at 1,000 to 1,500 bpd. It was sidetracked off a vertical well bore with a long-term potential of 200-300 bpd.
Multiple technologies required Viscous oil requires multiple technologies to increase productivity and maintain facility operability, Buehler said.
The operations issue relates to the amount of solids produced from the shallow reservoirs, which are not well consolidated.
“There is no elegant solution that’s going to make it go away,” Beuhler said. There will be “a constant process of continuous improvement … over time.”
With the pentalateral, said Mik Triolo, Greater Prudhoe Bay operations drilling engineer, BP was able to access all of the economic sands with the laterals from a single well. BP “employed some proven coiled tubing technology” in the pentalateral well to drill one of the laterals from an open-hole junction kick-off, a significant cost savings for a sand which didn’t justify the cost of a junction box.
The pentalateral took twice as long to drill as the quadrilateral.
“We’re pushing the technology envelope,” Beuhler said, “we’ve got to, we can’t live with the status quo,” and the longer drilling time was necessary to help “unlock the well component of the viscous strategy and technology development.”
The multilateral wells are also, Triolo said, on “the very edge of the envelope” because they are shallow extended reach wells, with a true vertical depth of between 4,000 and 5,000 feet, but stepping out 12,000 to 13,000 feet measured depth.
The results: instead of a few hundred feet of bore going vertically through the reservoir, there are 27,000 feet of laterals in the reservoir. Buehler said that the number of laterals drilled is a function of the number of sands in the reservoir: typically two on the West Sak side and four to five on the Schrader Bluff side of the viscous reservoir, which has different names on different parts of the North Slope but is basically the same accumulation.
| 