NPR-A planning moves ahead

ConocoPhillips signs memorandum of understanding with Bureau of Land Management for environmental impact statement for Alpine satellite pads, including NPR-A

Kristen Nelson

PNA Editor-in-Chief

Development plans are under way for two discoveries in the National Petroleum Reserve-Alaska. ConocoPhillips Alaska Inc. President Kevin Meyers reviewed the company's 2003 plans at the Anchorage Chamber of Commerce Jan. 27, including exploration, development and pre-development planning work.

The biggest development project Meyers announced has been eagerly awaited since Phillips Alaska Inc. and partner Anadarko Petroleum Corp. announced discoveries in NPR-A in May of 2001: Meyers said ConocoPhillips has signed a memorandum of understanding with the Bureau of Land Management for an environmental impact statement for western satellite development.

Two of those satellite drilling pads, Fiord and Nanuq, are at discoveries north and south of Alpine where the company has already done planning work for satellite drilling pads. But two of the satellite drilling pads, Spark and Lookout, were among the NPR-A discoveries (five wells and a sidetrack) announced in 2001: Spark 1 and Spark 1A, Moose's Tooth C, Lookout 1, Rendezvous A and Rendezvous 2.

MOU for western satellites

The company hopes to see a decision on the EIS in 2004, Meyers said, and “then we can make a decision whether or not the economics and the permit stipulations are such that we can actually go forward and sanction development there.”

Alpine expansion

“And the reason we're looking at them as satellites to the Alpine field is fundamentally that the Alpine facilities are within about 20 miles, the logical thing is to go to those facilities and debottleneck them and use those facilities as opposed to putting in a standalone development.”

The company has looked at Alpine expansion before, Meyers said. In fact “at one time we thought we'd go mega expansion at Alpine that would get us up toward 140,000-150,000 barrels a day.” But when the cost of that expansion was evaluated, it wasn't economic, “could not be justified on a standalone basis, just on Alpine alone.”

With some of the new satellites the company might be able to reach those production levels, “but right now it just didn't make sense,” Meyers said.

Instead the company is using a phased approach to Alpine expansion and the first phase, about $60 million gross, “will expand both our water and gas handling capacity” and “increase our oil production by about 5,000 barrels a day.” That expansion, ACX-1, should start up in the 2004 time frame, “so we'll be doing a lot of work on that this coming year and maybe the following year.”

Further expansions are possible, he said. “Our plan is to expand the facilities as it makes good economic sense as we bring on these other western North Slope satellites.”

$640 million new capital

Planned 2003 development drilling includes: 60-70 penetrations at Prudhoe Bay (five rigs); 15-20 wells at Alpine (one rig); 10-15 wells at Kuparuk (two rigs) and four wells at West Sak (two rigs).

In addition, Meyers said, the company will recomplete three Tyonek Deep wells as gas producers from the Tyonek platform in Cook Inlet, bringing in Kuukpik Rig No. 6 for that work.

At West Sak, which lies beneath existing Kuparuk facilities, ConocoPhillips has been developing the viscous oil from two Kuparuk drill sties, 1C and 1D. With new technology, multilateral horizontal producers and horizontal undulating injectors, the company has started to approach economic returns, Meyers said, with one of the new wells producing at 1,500 barrels a day — compared to original vertical wells producing a couple of hundred barrels a day, and 50 wells producing 8,000 barrels a day total.

“Half of that production comes from six multilateral producers,” Meyers said.

And with those kinds of results the company hopes this year to sanction its “first standalone West Sak drill site, the 1J drill site, in the sweet spot of the field” and “in the interim we'll be drilling several additional horizontal wells, both injectors and producers, to keep proving up the technology.”

Exploration plans

Onshore on the North Slope, Meyers said the company would drill the Oberon prospect between Kuparuk and Alpine and the Puviaq prospect in western NPR-A.

The company has averaged nine to 10 exploration wells a year in recent years, Meyers said, but this year's work involves some remote locations.

“And as you get into remote locations, that tends to translate into more cost. So when you look at what we're doing in terms of the dollar basis, this is a pretty average program for us in the last few years.”

These are “moderately expensive wells,” he said.

“And of course I think I'm not giving away the farm when I say the more expensive the well, the bigger potential must be out there in order to justify drilling it.”

Want to know more?

Web site: www.PetroleumNewsAlaska.com

2002

• Dec. 15 Expanding the scope: ConocoPhillips talking about three more Alpine (Colville River unit) satellites for a total of five; company plans to sanction Alpine facility expansion

• Dec. 8 ConocoPhillips spending cuts not expected to impact Alaska

• Dec. 1 New NPR-A stipulations, offshore incentives in works

• Oct.20 ConocoPhillips files for exploration drilling in and west of Kuparuk

• Sept. 29 Progress on Alpine debottlenecking project slower than expected

• Sept. 29 MOU streamlines Point Thomson, Alpine permitting

• Sept. 29 Road to NPR-A

• Sept. 8 Phillips applies to expand Colville unit from 80,000 acres to 140,000

• Aug. 25 Winter work to include new pads for Phillips

• June 9 BLM prepares for NPR-A activity

• June 2 BLM planning for full field development in NPR-A

• May 26 Alpine trend shows best NPR-A oil potential

• May 19 U.S.G.S.: NPR-A may hold significantly more oil

• March 24 Taking the lead

• March 17 Phillips drilling at Hunter

• March 3 Westward expansion proves challenging

• Feb 3 Anadarko, Phillips hope to declare NPR-A prospect commercial in 2002

• Jan. 13 Corps of Engineers reviewing Colville Delta satellite plans

2001

• Dec. 9 Alpine “good news story” for Phillips, Meyers tells analysts

• Nov. 4 Alpine facilities might be expanded

• Oct. 28 Winter exploration to focus in NPR-A….

• Oct. 21 NPR-A, Alpine yield high quality crude

• Aug. 28 Phillips submits applications for Colville satellite development

• July 30 Second Alpine satellite discovery announced

• June 25 Evaluations of three NPR-A discoveries Phillips’ top priority

• May 28 Phillips, Anadarko announce NPR-A discoveries; BLM to hold two more NPR-A lease sales

• April 28 Phillips testing second accumulation from Alpine pad

• Feb. 28 Phillips files draft environmental evaluation for two new pads at Colville

2000

• Dec. 28 Production begins from Alpine

• Nov. 28 More details for two Phillips Alaska exploration prospects

• Nov. 28 Alpine begins production

• Aug. 28 Phillips Alaska applies to expand Colville River unit

• April 28 Alpine on schedule; all modules moved to pad

• April 28 BLM proposes unitization for NPR-A

• Jan. 28 ARCO to drill exploratory wells north of Nuiqsut

1999

• Dec. 28 Anadarko believes in Alaska

• Nov. 28 ARCO’S Alpine field development 85% complete

• Sept. 28 ARCO, Anadarko increase producible estimates from Alpine

• Sept. 28 Western North Slope focus of winter exploration

Want to know more about Cosmopolitan?

Web site: www.PetroleumNewsAlaska.com

2002

• Dec. 15 Expanding the scope (sidebar)

• Dec. 1 Popp finds permitting ‘seriously flawed,’ with sidebar: ConocoPhillips looking at second quarter sidetrack at Cosmopolitan

• May 5 Oil found in two formations at Cosmopolitan — Hemlock, Tyonek

• April 21 Commission told Phillips is on track at Cosmopolitan

• March 17 Phillips could begin production at Starichkof in late 2003

• Feb. 3 State approves two Cook Inlet units

2001

• Nov. 25 State, feds OK Cosmopolitan unit

• Nov. 18 Drilling continues at Cosmopolitan

• Oct. 14 Cosmopolitan drilling set to begin, first spill drill held

• Aug. 28 Phillips files application to unitize lower Cook Inlet leases

• May 28 Phillips to drill old Starichkof prospect offshore Anchor River

• April 28 Phillips plans lower Cook Inlet exploration well