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Technology key to slope heavy oil recovery Multi-lateral wells cut cost of producing reservoirs like West Sak Kristen Nelson Petroleum News Editor-in-Chief
The world-class heavy oil resource on Alaska’s North Slope has not been commercial because it cost more to develop than the oil was worth.
But that is changing, Greg Leveille of ConocoPhillips Alaska told the Alaska Support industry Alliance Sept. 25.
“Of course if this heavy oil was down in West Texas … these oil fields would have been developed a half century ago. … you could have drilled a bunch of shallow wells,” Leveille said.
But this is the North Slope, and the cold temperatures, the fragile environment, the permafrost and the distance from market have combined to make this 10-19 degree API gravity oil too expensive to commercialize.
Until now.
Long-reach multi-lateral drilling techniques, developed in the last 10 years, are improving the economics of heavy oil production on the North Slope, and 4 percent of the oil in the trans-Alaska oil pipeline, some 35,000 barrels per day, is now heavy oil, said Leveille, ConocoPhillips Alaska’s Kuparuk satellite project leader.
The resource is huge: the 20-25 billion barrels of heavy oil in place is “more than was present at Prudhoe Bay before production started,” he said. And, while North Slope natural gas is the undeveloped resource that gets most of the attention, there is “actually more resource in heavy oil here than there is in gas in Prudhoe, Point Thomson, and all the other gas discoveries on the North Slope in the greater Prudhoe Bay area.”
Congress is considering a heavy oil tax credit, and if that tax credit passes, Leveille said, “we believe it would spur investment in new technologies, and certainly would spur some new developments and … get the heavy oil developments rolling and moving forward at a much faster pace.”
Production challenges This oil is alternatively called “viscous” or “heavy,” Leveille said. “Viscous refers to the ability to flow and … the heaviness refers to the API gravity.” Because the oil is viscous it moves slowly through the pore spaces of the rock. There are challenges even when the oil reaches the well bore and is produced, because “it tends to create emulsions” which are a challenge for the surface facilities in managing the heavy oil.
Drilling into the shallow reservoirs to reach the heavy oil also presents challenges.
The first is bringing the heavy oil up through permafrost from relatively cool reservoirs. The hotter oil is, the more easily it flows, Leveille said, and because the heavy oil reservoirs are at about room temperature, bringing the oil up through 1,500 feet of frozen ground further cools it and reduces the ease with which it flows.
The shallow reservoirs are also difficult to drill because the North Slope is “an environmentally fragile area (and) we basically have to drill our wells from drill sites.” Those wells can reach out as much as two miles from the drill site “to get to the reservoir and it’s just very expensive to do that when the reservoir’s shallow.”
And the shallow sands are relatively unconsolidated, so there are a lot of solids produced with the oil and those solids get into the facilities.
It all adds up, he said, to “multi-million dollar wells,” and “high-technology wells.”
And on the other end, the refineries buy heavier oils at a discount, so this oil is worth less than conventional oil. Different types of wells In the 1980s attempts were made to develop North Slope heavy oil with vertical wells, Leveille said, with hundreds of millions of dollars spent on pilot projects. At West Sak, another effort was made in the 1990s, again with vertical wells. The results were similar: with vertical wells you “couldn’t get the flow rates required to produce this oil economically.”
A breakthrough came in 2001-02 with multi-lateral wells — two horizontal wells drilled from a single well bore, each into a different sand. That increased the flow rate, but the well costs were still fairly high: it wasn’t a commercial solution, but it was a move in the right direction, Leveille said.
Multi-lateral wells were “just really a dream a decade ago. People were just starting to develop that technology.” But today, he said, “we can drill those wells in a very short period of time.”
The North Slope operating companies — ConocoPhillips at West Sak and BP Exploration (Alaska) at Milne Point and Orion at Prudhoe Bay — are now “drilling some very, very long horizontal wells.” And they are also trying designer wells: “We have a well which undulates up and down through the reservoir” to reach thin sands.
Progress in well design is “probably the critical technology as far as accessing this resource,” Leveille said, with records being set and broken for distance in the reservoir. One multi-lateral well drilled this year had, between two lateral sections, almost 12,000 feet of well bore in the reservoir.
“The oil flows very slowly, but the more footage you’re able to put in the reservoir, the more rate you’re able to achieve per well, so just with this one well we were able to far out produce anything which we could achieve with the vertical wells which were being used back in the ‘90s.”
One well completed this year flowed at a time for more than 4,000 barrels of oil per day, compared to the previous West Sak record of some 2,000 bpd. The decline rate was rapid — down to 2,000 bpd within the first two months — but the initial rate was much higher than that from past wells.
The wells are still expensive, Leveille said, but a long horizontal well “basically replaces three vertical wells … but it costs less than the three vertical wells combined … and we do see a significant reduction in cost as a result of drilling those types of wells.” Significant resource for ConocoPhillips Leveille said all of the working interest owners on the North Slope are exchanging ideas on heavy oil development. ConocoPhillips is also learning from other heavy oil resources it has worldwide.
“If you look at ConocoPhillips’ portfolio, we’re one of the heaviest weighted oil companies — or major oil companies — in the world. We have about 20 percent of our overall upstream assets in heavy oil,” he said, a total of “about 100 billion barrels of oil in place in projects that we’re involved in around the world.”
Because heavy oil is such a big resource for the company, in Canada, in Venezuela, in China, “we’re trying to find ways to develop that worldwide resource, and not just the resource here in Alaska.”
There is also a motivation closer to home. In addition to heavy oil drilling opportunities from existing drill sites, Leveille said the company is also looking at developing new drill sites targeting heavy oil.
Kevin Meyers, president of ConocoPhillips Alaska, was involved in a pilot project in the 1980s at drill site 1-J, Leveille said, “and he tells me he won’t sleep well at night until we find a way to commercially develop that drill site. So that’s something of a high priority for me, and we’re going to continue to try to do that.”
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