Prudhoe owners to develop viscous field

Kristen Nelson, Petroleum News editor-in-chief

Prudhoe Bay operator BP Exploration (Alaska) and its partners said Sept. 4 they will expand viscous oil production at the western edge of the Alaska North Slope field through development of the Orion accumulation, discovered in 2001 and delineated over the past two years. (See initial story in Aug. 31 issue of Petroleum News.)

BP is the operator of Orion and owns a 26.35 percent working interest. Co-owners are ExxonMobil (36.4 percent), ConocoPhillips Alaska (36.07 percent), Chevron USA (1.16 percent) and Forest Oil (0.02 percent).

BP said the Orion V-202 horizontal lateral delineation well was successfully drilled and placed on production in July with a flow rate in excess of 3,500 barrels of oil per day. Potential recovery is more than 200 million barrels of 16-to-23 API degree viscous crude oil and will be handled by existing Prudhoe processing facilities.

Orion, in the Schrader Bluff formation, overlies the existing Borealis reservoir, in the Kuparuk River formation, at a depth of approximately 5,000 feet.

“Orion is an example of the opportunities which currently exist on the North Slope to turn substantial undeveloped viscous oil resources into economically recoverable production and offset mature field decline,” Steve Marshall, president of BP Exploration (Alaska), said. “The viscous oil resource represents a great opportunity for Alaska. Provided we have fiscal stability and we continue working with our contractors and suppliers to effectively manage costs, I am confident that Alaska can attract the investment to exploit these viscous oil resources.”

Company spokesman Daren Beaudo told Petroleum News that BP estimates “the total capital spent could approach $500 million.”

Beaudo said BP sees “development occurring in three phases subject to owner approval and field performance.” Phase I, through roughly the first quarter of 2005, could include wells drilled from existing pads L, V, W and possibly Z, and would utilize existing facilities. Phase II, through the end of 2006, would include wells drilled from the same group of pads. “And we envision facilities such as manifolds will be constructed to support new production and injection wells,” Beaudo said.

During phase III, roughly the second quarter 2006 through 2008, “we anticipate a new pad would be constructed, called I pad, along with related facilities — pipelines, partial processing and solids handling.”

Beaudo said viscous oil development involves “significant technological and cost uncertainties and economic risk.” Much remains to be learned about viscous production techniques “before major infrastructure projects are sanctioned,”

The partners are taking “a drilling-led approach” to viscous production, Beaudo said, and will “test new technologies and reduce costs by utilizing world-class drilling expertise to access the thin oil-bearing horizons through existing well pads and facilities already in place.”