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EXPLORERS USA 2005: ConocoPhillips leads the way in NPR-A Builds 70-mile ice road to Kokoda; sets up task force to look for ways to lower drilling costs in National Petroleum Reserve-Alaska Kristen Nelson & Kay Cashman Petroleum News
The company that continues to spend the most money on exploration in Alaska has put together a task force to find ways to lower the cost of exploration in the National Petroleum Reserve-Alaska.
Headed by its vice president of exploration and land, Rick Mott, ConocoPhillips Alaska’s employees, partners and contractors are being asked to come up with new ways of doing things in NPR-A where the cost of logistics often rivals the cost of drilling as ConocoPhillips and its partners Anadarko Petroleum and Pioneer Natural Resources move farther west into the petroleum reserve.
“Literally everything is on the table” from a rig which would be easier to move to different vehicles to lighter-weight camps to the company’s approach to contracting: “Should we be doing the longer-term contracts” to give contractors the ability to spread their investments out over longer periods of time, Mott told Petroleum News in a Jan. 11, 2005 interview.
The company’s drilling department has been investigating rigs for remote exploration drilling, and has looked at a number of rigs, not just in Alaska.
“It’s just all questions right now,” he said, but the company has to look at how “to get to some of these very remote locations out in northwest NPR-A” in a more cost-effective way.
Mott said Puviaq was an example of how “very, very expensive” it can be to drill at a remote location: ice pad work started late one winter and equipment was moved out to the site; the following season the rig was assembled and the well was drilled, but it took until late summer to get all the equipment out, a total elapsed time of some 18 months to drill one well.
“You just don’t get enough holes in the ground doing it that way,” Mott said. And in new, remote, under-explored areas, “you want to get a couple of holes so that we learn something.”
According to a Petroleum News source on the task force one of the solutions being discussed by the task force is using an aircraft similar to the Sikorsky Skycrane to haul in drilling equipment and supplies — something that was done in the early days of exploration on the North Slope. The Skycrane, which has a 20,000 pound lift capacity, was used to haul in all types of equipment, including drilling rigs in large sections.
Another option being considered is barging in drilling equipment and all-terrain vehicles (such as rolligons) during the summer and then waiting for the ground to sufficiently harden to launch operations.
ConocoPhillips Alaska spokeswoman Dawn Patience told Petroleum News that the task force is expected to be finished with its analysis following the end of the 2005 exploration season. Seventy-mile ice road to Kokoda Two of the wells ConocoPhillips was drilling in its 2005 winter exploration program in NPR-A were at the Kokoda prospect. The company built a 70-mile ice road to access those prospects, beginning work in late 2004.
The ice roads are “farther out than anyone has ventured with an ice road before,” Mott said.
Total drilled its Caribou prospect south of Kokoda in 2004, but did not build an ice road, using rolligons and an existing gravel air strip near the site. BP Exploration (Alaska)’s Trailblazer prospect, reached by ice road in 2001, is northeast of Kokoda, somewhat closer to the North Slope road system.
Since rolligons were used to reach the Puviaq well site it had no ice road access, which “prevents you from being able to test the wells, if you find something, because you can’t get the test equipment out there in a timely fashion,” Mott said.
With the ice road, “we can actually test these wells if they’re discoveries,” he said.
To get the 70-mile ice road built, a remote camp was established in NPR-A so that the road could be built from two directions, but even with work from two directions, it was February before the ice was complete and drilling could begin. Wells eligible for 40% state tax credit The silver lining to the cost cloud hovering over the Kokoda wells is the state of Alaska’s exploration tax incentives. The wells are “eligible for a 40 percent tax credit,” Mott said.
In the last six years — 1999 to 2004 — ConocoPhillips Alaska drilled 47 exploration wells in Alaska.
In addition, the company shot some 3,400 square miles of 3-D seismic from 1999 through March 2004.
“There’s no one else in the industry that comes close in my opinion to that sort of commitment to Alaska,” Mott said.
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