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State accepts 18th plan of development for Point Thomson Location, rig will be determined for delineation well by June 15; applications will be filed for environmental permits for development during term of plan Kristen Nelson PNA Editor-in-Chief
The 18th plan of development for the Point Thomson unit on the eastern side of Alaska’s North Slope — including permitting for development and site selection and a rig contract for a delineation well — was approved Sept. 14 by Mark Myers, director of the Division of Oil and Gas in the Department of Natural Resources.
The plan covers Sept. 31, 2001, through Sept. 30, 2002, and during that time Point Thomson operator ExxonMobil Production Co. told the state it will apply for all environmental permits required for the proposed Point Thomson development project and pursue approval of the permits through the Alaska Coastal Management Program review process.
ExxonMobil said the Point Thomson owners will attempt to expedite the permitting process under the new National Energy Policy and will do preliminary engineering work in parallel with the permitting process. In excess of $12 million was spent on the 17th plan of development; the cost of the 18th plan is expected to be some $35 million.
Work commitment area drilling As part of the Point Thomson expansion-contraction agreement reached with the state earlier this year, ExxonMobil will select a work commitment area A delineation well location, develop the drilling plan and cost estimates and file permits for drilling by third quarter 2002.
A rig contract will be signed by June 15, and the well will be drilled through the Thomson Sand interval during the 2002-2003 winter season. ExxonMobil said the goal with this well is to confirm quality of the work commitment A area. One option for a well is to deepen the Red Dog exploration well, estimated to cost in excess of $15 million. If a new well is drilled, the cost will be in excess of $25 million.
Work will also be done on seismic data during the 18th plan: The pre-stack depth migration of the combined Point Thomson unit 3-D data set (Point Thomson unit, Challenge Island, island corridor west and Flaxman Lagoon) will be completed in preparation for updating the new geologic model which will be used to select final development well locations. ExxonMobil said that Western Geophysical completed processing of the main 3-D surveys during the 17th plan, and the Challenge Island 3-D survey was purchased.
Because of significant differences in the overlapping surveys, the problems were addressed by processing all four surveys together through pre-stack depth migration. ExxonMobil said that decision has delayed completion to the first quarter of 2002, but will result in a better product.
Continuous drilling by 2006 The expedited permit approvals and preliminary engineering are aimed, ExxonMobil said, at commencement of continuous drilling of Point Thomson unit Thomson Sand development wells no later than 2006, unless otherwise agreed by the state and the owners.
“For example,” ExxonMobil said, “such extension might be beneficial to the state and the owners in the event early gas sales from the PTU were of strategic importance to commercializing North Slope stranded gas.”
A new Point Thomson unit operating agreement will also be finalized. ExxonMobil said that the new agreement will be more consistent with legal and technical requirements for the operation of the unit than the current agreement. The agreement will be finalized by the major owners, and then the smaller interest owners will be given the opportunity to participate under the new agreement, or to remain under the existing operating agreement.
During the 17th plan of development, ExxonMobil said, a revised unit operating agreement was agreed to in principle by the major owners (ExxonMobil, BP, Chevron and Phillips) and the major owners executed an alignment agreement so that participation is “the same in the Thomson and Brookian reservoirs thus eliminating any possible conflicts of interest that might have otherwise arisen related to the sharing of facilities.”
ExxonMobil also said that this alignment of the owners’ interests across the entire redefined area is “viewed as a major step forward in progressing the field quickly toward production by removing the equity determination process as a factor in the field development process.” Lease cross assignments are expected to be filed before the end of the 17th plan of development.
Conceptual engineering designs During the 17th plan, the owners worked with two main contractors to develop conceptual engineering designs, evaluated several alternate development options and developed cost options for each. The owners also prepared preliminary project execution plans and developed major equipment purchase lists and major contract scopes. The conceptual engineering provided information for the environmental report.
A new 19-component compositional reservoir simulation model was constructed during the 17th plan utilizing latest modeling technology from ExxonMobil Research Co. and was used to evaluate a full set of development scenarios, including cycling, combined cycling and gas sales, cycling followed by gas sales and gas sales only.
Also during the 17th plan, the common database was extended to include the western extension area of the redefined Point Thomson unit area and ExxonMobil said that all major owners now have access to all well data in the redefined Point Thomson unit area and access to 3-D seismic data covering essentially all of the redefined area.
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