Sidebar: BOEM exploration, development scenarios

Kristen Nelson

Petroleum News

In its draft environmental impact statement for lease sale 258 in Cook Inlet, the Bureau of Ocean Energy Management looks at exploration and development scenarios for oil and gas that might be found on blocks in the lease sale area. The agency notes that, unlike other Alaska outer continental shelf planning areas, Cook Inlet “has a nearby market for both oil and gas. As a result, the current Cook Inlet E&D scenario does not defer gas sales until oil production is depleted.”

There is an existing natural gas distribution system in Cook Inlet which “could be extended to transport gas from the Cook Inlet OCS to the greater Anchorage and Kenai Peninsula areas.”

Federal lease sales have been held in Cook Inlet since 1977 and four exploration wells have been drilled in the current lease sale area as a result of sales in 1977 and 1981, BOEM said.

“None of the four exploration wells discovered oil or natural gas in economic quantities and the last exploration well drilled was plugged and abandoned in 1984,” after testing prospects which, given knowledge at the time, were believed to have the best prospects for large volumes of oil and gas.

In the current exploration and development scenario, the high activity case estimates that eight exploration and delineation wells would be drilled over a 3-year period.

BOEM said its geoscientists and engineers believe Tertiary oil and gas plays will be the main attraction within the proposed lease area “because of their proven petroleum potential in the northern part of the Cook Inlet Basin and their past performance in hosting commercial oil and gas fields.”

The range of activities estimated for low, medium and high activity levels includes a low case where one natural gas field is discovered and developed; a medium case based on one oil field discovered and developed with associated natural gas which would also be produced; a high case with both fields in the low and medium case discovered and developed.

In the high case, a maximum of four 24-slot platforms would be required, with 65 wells - production and service - drilled.

Seismic and geohazard surveys are assumed in the analyses.

Mobile offshore drilling units, MODU, would be employed for exploration drilling, and BOEM said it estimated that three wells per drilling rig could be drilled, tested, plugged and abandoned during a season. The assumption is that only one MODU would be used, BOEM said, noting that “historically there has only been one MODU working in the proposed lease sale area at one time,” although as of December there are two MODUs in Cook Inlet both out of service.

Following delineation drilling, permitting would occur for development, with submission of a development and production plan.

If there are multiple platforms, the first would serve “as a hub, connecting pipelines from other platforms to the main pipelines to shore,” BOEM said.

Subsea pipelines are the preferred method to transport oil and gas to shore from a platform, with the nearest landfall location “likely on the southern Kenai Peninsula near either Homer or Nikiski, depending upon where the first commercial oil discover is located.”

Because of the location of existing pipelines in upper Cook Inlet, “it is not anticipated that any of the production platforms from new discoveries in lower Cook Inlet will be able to utilize any existing pipelines,” the agency said.

Because of Cook Inlet’s history of oil and gas production from offshore state leases, BOEM said it assumed that existing onshore infrastructure has capacity to support OCS exploration and development without major expansion or modification.

The exploration drilling timespan is estimated at 3 years, followed by a 3-year environmental analysis process between delineation and development.

The time needed to install platforms and drill wells after discovery is the main driver of the development and production phase, with 7 years estimated to install four production platforms in the event separate oil and gas fields are discovered and developed, Wbased on a construction estimate of 3 years for a platform before installation.

“Each platform is installed, commissioned, and producing in its first year of operation,” BOEM said. Wells are assumed to have an average economic life expectancy of about 20 years, and if first wells begin production 7 years after discovery, and last development wells drilled in year 14, decommissioning would begin after year 34.

- KRISTEN NELSON

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