Providing coverage of Alaska and northern Canada's oil and gas industry
March 2005

Vol. 10, No. 10 Week of March 06, 2005

Still a mystery

As $5B Thunder Horse facility nears completion evidence mounts for broader oil, gas play

Ray Tyson

Petroleum News Houston Correspondent

BP, which rolled out its colossal Thunder Horse production facility for public viewing Feb. 26 in Texas, is sticking to its conservative estimate for the equally colossal oil and gas reservoir the offshore facility is to serve in the deepwater Gulf of Mexico.

But evidence is mounting for a broader oil and gas play in the area, or possibly a collection of reservoirs, than BP’s official reserve estimate of around 1 billion barrels of oil equivalent for the Thunder Horse prospect in Mississippi Canyon.

“When it is all said and done, it has the potential to produce about 1 billion barrels long term,” BP spokesman Hugh Depland said.

Back in the 1970s, BP and its partners issued a similarly conservative forecast for their giant Prudhoe Bay field on Alaska’s North Slope. But as technology and understanding of the reservoir improved, the amount of estimated recoverable reserves steadily increased over the years from 9 billion barrels to around 14 billion barrels today, an amazing 55 percent jump from the initial forecast.

Thunder Horse operator BP, along with partner ExxonMobil, had no more than announced the 1999 discovery than industry analysts began speculating as to the field’s reserve potential, based on the enormous size of the geological formation that spawned Thunder Horse, the largest discovery ever in the U.S. Gulf.

Unofficial estimates ranged up to 7 billion barrels of recoverable reserves at Thunder Horse, although 3 billion barrels is often cited by analysts as the likely mean.

BP, though hesitant to comment on reserves and exploration activities, actually helped prove Thunder Horse’s larger potential with its Thunder Horse North discovery, located five miles northwest of Thunder Horse. BP has never released reserve estimates for Thunder Horse North. However, analysts speculate the pool contains around 400 million barrels of oil equivalent, bringing the play’s total for the Thunder Horse complex to around 1.4 billion barrels.

Thunder Hawk on northeast fringe

But there is even more eye-popping evidence of a larger play in the immediate Thunder Horse area. Last year Dominion Exploration and its partners announced a discovery on their Thunder Hawk prospect, located on the northeast fringe of BP’s eight-block Thunder Horse complex. Before drilling commenced, the owners believed they had a piece of Thunder Horse.

Dominion first hinted at a significant find at Thunder Hawk last May when it reported at least 100 feet of hydrocarbon-bearing section in multiple thin sands of the middle Miocene horizon. That was followed by a sidetrack well that turned up about 300 feet of pay in two quality zones capable of producing upward of 150 million barrels of oil equivalent. Another well is planned for this year.

Geologists say the area around Thunder Hawk contains the same turtle-shaped structures that produced Thunder Horse. But the area, located in the Boarshead basin, also is overlain by so-called “allocthonous” salt bodies, which tend to distort seismic readings and make imaging difficult. Because of the region’s complex geology and reservoir imaging challenges, no one can yet be certain of Thunder Horse’s true potential.

Thunder Horse production this year

BP is aiming to launch production from Thunder Horse during the second half of 2005, just five years after the field was discovered. The $5 billion offshore facility, said to be 50 percent larger than the next largest floating semi-submersible rig in the world, is capable of processing 250,000 barrels of oil and 200 million cubic feet of gas per day, enough energy to provide daily energy needs for 6.5 million homes, according to the U.S. Interior Department.

“The expectation is that we will use all that capacity,” BP’s Depland said of the production facility. “We certainly did not build it with a lot of spare capacity.”

The Thunder Horse platform is expected to be moved in about a month from a fabrication yard in Ingleside, Texas, to its mooring in Mississippi Canyon, about 150 miles off the Texas-Louisiana coast.

In addition to its enormous size, the Thunder Horse projects features more than 100 technological firsts, including a new generation of engineering solutions to deal with the ultra-deep, high temperature and high pressure reservoir.

The reservoir lies beneath some 19,000 feet of mud, rock and salt, topped by more than 6,200 feet of ocean. To reach the hydrocarbons required some of the longest deviated wells in the world. To date, BP has drilled seven wells and plans more as the field continues to develop over the coming years.

“Huge deepwater projects like BP’s Thunder Horse and others are expected to increase our Gulf production to more than 2 million barrels per day within the next two years,” said Johnnie Burton, director of the U.S. Minerals Management Service.

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