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Five satellites under development at western Prudhoe Combined, the small fields will be producing 40,000 barrels a day by the end of 2001, up from 4,000-5,000 at the end of this year Kristen Nelson PNA News Editor
Aurora, Borealis, Midnight Sun, Northwest Eileen-Schrader Bluff and Polaris — the newest Prudhoe Bay satellite fields — will be contributing 40,000 barrels a day of production by the end of next year, a significant addition to current North Slope production of 936,139 barrels a day (the September average).
Full production from the five fields now under development will occur in 2004-2005 and peak at about 70,000 barrels a day.
Two new gravel pads, the expansion of one existing pad and new pipelines at west Prudhoe Bay will enable field operator BP Exploration (Alaska) Inc. to develop the five satellites.
Alignment of ownership interests at Prudhoe Bay and the single operatorship at Prudhoe Bay have made this increase in satellite development possible, Joe Hurliman, BP’s resource development manager for Greater Prudhoe Bay, told PNA in an Oct. 6 interview. Five key satellites “This last year has just been an explosion in the satellite area. The alignment has really broken the logjam, and has allowed the satellite production really to move forward,” Hurliman said.
“Before alignment, the pace was slow. It was moving along very slowly and methodically and since alignment it has just opened up.”
Five key satellites are now under development, he said.
Midnight Sun is on production at 4,000 barrels a day.
The owners have filed for a participating area for Aurora and are in the first phase of development. The third well at Aurora is being drilled, said Gordon Pospisil, BP’s west end new development manager for Greater Prudhoe Bay, with the ultimate well count for Aurora expected to be 15 to 20 wells.
A participating area application for Polaris will be filed in November, Hurliman said. And the participating area application for the accumulation formerly known as Northwest Eileen-Kuparuk, now called Borealis, will be filed in January, with active development drilling there in the course of 2001, Hurliman said.
Borealis field start up should occur about mid-year 2001, Pospisil said. New pads, pipeline for Borealis Borealis is where the main infrastructure development will occur, Hurliman said. “It’s going to require, in 2001, a major pipeline that will contact two new pads, L pad and V pad.” The pipeline, some five to six miles in length, will go in beginning in January and will include a 24-inch common flow line, a 12-inch water injection line and an 8-inch gas lift line.
A new road was built out to the Northwest Eileen area this year, Hurliman said, and gravel laid on two new pads, “and that prepares us so that next year we can begin drilling development wells at Borealis specifically.” Hurliman said the total well count for Borealis could reach 60.
The fifth satellite development at west Prudhoe will be the Northwest Eileen-Schrader Bluff, which is still in the appraisal stage, Hurliman said. “We know less about that than the other four.”
The Schrader Bluff will be penetrated by at least one well this quarter, Pospisil said, and there will be at least two additional penetrations as part of the Borealis development drilling. The goal, he said, is a dedicated Northwest Eileen Schrader well on pilot production by the end of next year. Schrader on production now Gilbert Beuhler, BP’s central new development manager for Greater Prudhoe Bay, said there have been two Schrader wells on production for approximately a year at Polaris. Schrader is heavier oil, the same horizons called West Sak in the Kuparuk River unit, Pospisil said. “Fortunately as we move to the east (from Kuparuk), in general we’re getting deeper and warmer so the oil is more mobile and less viscous.”
Beuhler said the company has been happy with the two Schrader wells at Polaris. “Those wells are producing a combined just over 1,000 barrels a day. That’s the first Schrader production we have online in the Prudhoe area. That’s very encouraging in terms of that Schrader development.”
Polaris and Northwest Eileen-Schrader Bluff will produce from the shallower Schrader Bluff formation. Aurora, Borealis and Midnight Sun will produce from the Kuparuk. The main Prudhoe Bay production is from deeper formations.
Sharing infrastructure helps make the new developments economic.
“Part of the efficiencies of developing these horizons is that generally they’re in the same area and with that we can develop them from the same pad and so by sharing the surface pipelines, metering and separation facilities, we can develop these new satellites at less cost per barrel and increase the amount of reserves that are economic,” Pospisil said.
“So every time we look at a penetration, we look at all the reservoirs that could be accessed or appraised from that well bore,” Beuhler said.
Flows from multiple satellites could be co-mingled in one well bore, Pospisil said, or the satellites can share injection, “where you’ve got an injection well which is providing pressure and sweep to multiple horizons by accessing the different depths.” Two rigs for satellites Hurliman said BP will have two rigs working in the satellite fields in 2001, “and is looking at options to actually increase that.”
By comparison, Pospisil said, “this year we had two rigs generally supporting all the IPA and satellites and next year we expect to have two rigs that are focused on satellites alone.”
In addition to increased rigs, he said, a new 3-D seismic survey was acquired over the S pad area this year, and BP is using that survey to identify faults and allow the company to place injector and producer wells to optimize recovery. With 3-D seismic to help define the pay zone, Pospisil said, BP was able to drill horizontal wells for the first three development wells at Aurora.
“Horizontal wells are not new, but to use them for the initial development wells is something new on the North Slope,” he said, noting that Alpine development is also being done with horizontal wells. Western, central satellite area Aurora is being developed from the existing S pad. Borealis and Northwest Eileen-Schrader Bluff will be developed from the existing Z pad and the new L and V pads. Polaris will be developed from existing M, S and W pads. And Midnight Sun, the farthest east of these fields, from the existing E pad.
Aurora and phase 1 of Polaris will be drilled from the S pad. Borealis will be drilled from L and V pads in 2001.
All of these satellites, Hurliman said, produce into Gathering Center 2 at the main Prudhoe Bay field.
“I think that another key thing to feature here is that alignment has also allowed the co-development of the satellite horizons with the IPA or the main field horizons.”
Pospisil said that part of the L and V pad expansion will also allow penetration of “an area of the Sag and Ivishak, the original Prudhoe horizons that we weren’t able to access before. So our expectation as well is we’ll be able to bring on new reserves in that area…”
“And this is where the alignment of activities is really nice for us because these opportunities might not be as big as a Borealis or a Polaris, but they’re still very valuable and will add reserves,” Beuhler said. Some accumulations known Some of these accumulations have been known for some time.
“We knew that the Kuparuk horizon generally extended and was present in this area and we knew that the Schrader Bluff had potential in this area,” Pospisil said. “But we’ve drilled specific wells that have helped us to prove up the developed reserves in specific closures. That is we’re able to identify a given structure, a trap, and then map the area that we knew would make it economic to develop. So we’ve done that.”
The Schrader, which as been known for a long time, is technically challenging, Beuhler said, because “it’s a series of sands, relatively thin in each … (with) relatively higher viscosity oil.
“So we knew there was a hydrocarbon deposit there, it was whether we could develop it cheap enough to make it economic and basically arrive at technologies of completion to get the productivity of each well high enough to make it economic to develop.
“And that’s one of the things that’s so encouraging is these first two wells that we’ve had on production for about a year,” he said. “Producing a combined 1,000 barrels a day is a good piece of evidence that we can develop it for the economics and that we can achieve producibility levels.” Hurliman noted that the Northwest Eileen-Schrader Bluff will be the most challenging development in this area and will depend on reducing drilling costs.
“So we’re looking to new technologies to further reduce our drilling costs. And that’s true for all of the satellites, but in particular with the Schrader Bluff reservoirs.
“So we hope to key on the techniques that are being used successfully in Milne and West Sak,” Pospisil said.
The goal, Beuhler said, is to apply successes at Milne and the first stage of Polaris drilling “as we move up the trend toward Northwest Eileen Schrader Bluff, so you can learn and improve as you go…” LADS rig possible for satellites A new rig, called a light automated drilling system or LADS rig, is being built for use at BP’s Milne Point field right now, and Hurliman said the satellite team was looking at whether a similar rig might help reduce drilling costs in the satellites. The LADS, he said, is an automated rig which requires about half the man power of a standard rig: “It has automatic pipe handling and pipe makeup systems. And it’s also able to move around without ice roads, large ice roads.”
Ronnie Chappell, BP spokesman in Alaska, said some of the people working at Schrader Bluff went to Canada and looked at the rigs that were being used to drill shallow reservoirs there. When they came back, he said, they asked: “Why do we have to have something the size of the Captain Cook Hotel out there on the tundra drilling all of our wells? Can’t we find something that is purpose-built to do this — to develop these shallow reservoirs that’s not so big and not so expensive?”
Drilling contractors in the state were approached about building a lighter rig, Chappell said, and Nissho Iwai said they would be willing to build one for BP. “And so we’ve committed to drill a number of wells and they’ve committed to build and develop the system and I think they believe that they’re going to be able to drill pretty deep wells and pretty long measured depth wells.”
The goal, Chappell said, is to reduce drilling costs by 30 percent.
“If they can get that 30 percent reduction there, then they’ll have something really special. They’ll be a lot of work for rigs like that to do.”
The LADS rig, Chappell said, is expected to be working in August 2001. BP has committed to use the rig for six or seven wells, he said, “and NI has taken a risk in terms of fronting the cost of actually building this thing and bringing it up here.”
Hurliman said they were looking at a LADS type rig to help improve western Prudhoe satellite economics. The discussion now, he said, is whether to bring in a second LADS rig in conjunction with the rig going to Milne, or to wait until after the first rig is drilling. “We’re evaluating that right now,” he said. Doubled satellite staff Since alignment and the single operator, Hurliman said, the staff working on satellite development activity has doubled. There are now twice the number of people that BP and ARCO Alaska combined had working on satellite development. About 20 people now work directly on satellites, Pospisil said, with a lot more providing support, drilling and field operations.
Hurliman estimated that at a development cost of around $3 a barrel, development of the 300-400 million barrels is roughly one billion dollars.
“So we’re going to be investing upwards of a billion dollars over the next five years to bring these reserves on line,” he said. The pad and pipeline investment for these satellite developments total about $90 million, Pospisil said.
Other technology options
In addition to horizontal wells, multi-lateral completions and possible use of a LADS rig to reduce drilling costs, Hurliman said the satellite team is also looking at an enhanced oil recovery process for the Schrader Bluff, “where,” he said, “we think there’s a high potential to swell, mobilize, a significant portion of Schrader reserves.”
With the Schrader Bluff, Beuhler said, “you’d like to see that happen sooner rather than later, so you’re looking at MI-EOR in your depletion plan as part of that integrated depletion plan.” When you get a miscible injection online very early in field development you maximize initial benefits — the rate and acceleration of the new reserves — Pospisil said, providing the longest opportunity to maximize recovery.
There is a good opportunity for EOR in the satellite recovery, he said, because of proximity to existing facilities.
The fields will be on water flood, Beuhler said, and “we’ll exploit EOR sooner rather than later.” It’s part of having an integrated depletion plan, he said.
“So you’ve already asked the questions: When is the appropriate time to inject MI? When it the appropriate time to inject water? So you have a plan to do that in appropriate sequence.”
High end 300-400 million barrels
Right now, Hurliman said, potential reserves in the area are believed to be as high as 300-400 million barrels in the area that is actively being developed. But, he said, the number could be above 400 million.
Production from these satellite fields, at 40,000 barrels per day by the end of 2001 and peaking at 70,000 barrels per day in 2004-2005, “underpins the Alaska region target of growing production to 350,000 barrels a day for BP,” Hurliman said.
The full potential, if other fields were discovered in the area, could be Alpine sized — 80,000 barrels a day, he said.
Hurliman said phase 1 of Aurora development is approved and aligned with BP’s partners, and those partners are supportive on going forward with participating area applications for Polaris and Borealis. Long-lead items and engineering have been funded for putting in the pipeline to Borealis.
“Project sanction and approval hasn’t been achieved yet for Polaris or for Borealis and those we expect to achieve in the next three months,” he said.
A conveyor belt
“We’d sort of like to see this as a conveyor belt that we’re developing fields and moving them into operations and at the same time F.X. (O’Keefe, BP’s exploration business unit leader) and his team are identifying new fields to bring into the appraisal stage and work and tie back into the existing facilities.”
Pospisil noted that O’Keefe has been talking five to six exploration wells around existing fields this year. “That would be in the area that potentially we’d identify new satellites,” he said.
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