State approves 10th Kuparuk expansion

Unit expansion mainly to south, in Tarn participating area, with small expansion to west; if economic, more Tarn drilling may occur

Kristen Nelson

Petroleum News

A proposal by ConocoPhillips Alaska to expand the Kuparuk River unit has been approved.

In an Aug. 16 decision, the Alaska Department of Natural Resources’ Division of Oil and Gas approved expansion of the unit and of the Kuparuk and Tarn participating areas.

The expansion of some 2,880 acres is primarily to the south in the Tarn area, 2,560 acres, with a small addition of 320 acres to the Kuparuk participating area on the west.

But the expansion doesn’t necessarily mean more drilling, as the division said both expansion areas are already in production.

The Kuparuk River oil pool was discovered in 1969 by the Sinclair Ugnu No. 1 well and is the second-largest oil pool on Alaska’s Arctic slope, some 500 square miles. The expansion area is west of the 2A and 2M drill sites within the Kuparuk participating area.

The division said that development infill injection wells, seismic surveys and enhanced oil recovery programs indicated that the active reservoir area extended beyond the current unit and participating area boundaries, leading to the expansion request.

The Tarn oil pool includes original oil in place of some 136 million barrels in the Bermuda and Cairn intervals. The Tarn area expansion is south of the current participating area and is supported by tract well 2N-342, exploiting a southeastern lobe of sand called “Tarn South,” the division said.

The Kuparuk participating area is producing some 89,000 barrels per day and has a cumulative production of 2.2 billion barrels since production began in 1981. The Tarn participating area is currently producing some 13,000 bpd and has cumulative production of 103 million barrels since production started in 1998.

Infill drilling

The division said that recent reservoir development in the Kuparuk participating area has been infill drilling primarily done with coil tubing and some rotary drilling. “Reservoir management has focused on the performance of enhanced oil recovery projects that are being managed on a pad by pad basis,” the division said.

In the expansion area on the west side of the Kuparuk PA, development has included enhanced oil recovery, water cycling, gas injection and interaction with offset producers.

“These EOR activities and the associated data were able to provide the best argument that the areas currently outside of the KPA and KRU should be captured in an expansion,” the division said.

In the Tarn participating area expansion, reservoir development is centered on the drilling, completion and production of the 2N-342 tract operations well, and the division said the expansion to the south was best supported with data and results from the lobe penetrated by that well.

The division said that review of geological, geophysical and engineering data submitted by the Kuparuk operator, ConocoPhillips, and numerous follow-up meetings with the operator allowed it to establish that the technical requirements for an expansion had been met.

Areas in production

The western expansion of the Kuparuk PA, ADL 390503, tract 164, would have expired April 30 if not under a pending unit expansion agreement, the division said. Portions of ADL 390503 will be severed from the unit and the unitized portion is committed in part to the Kuparuk PA, with the nonunitized portion assigned a new ADL and extended for two years, with the rent increased from $3 per acre to $4.50 per acre to partially offset loss of lease sale bonus bids on the acreage.

In the Tarn PA expansion, ADLs 390983 and 390984, tracts 166 and 167, are severed as to the unitized and nonunitized portions of the lease. The unitized portions are committed in part to the Tarn PA and the rental will not increase; nonunitized portions are not extended and expire Jan. 31, 2012; the rental rate will not increase.