Conoco: Shark Tooth by late ’15 KRU drill site follows ’12 well

ConocoPhillips Alaska Inc. expects to bring its Shark Tooth satellite online by late 2015.

The most prolific oil company in the state is permitting a 24-well drilling pad, an access road and a gravel mine, as well as associated pipelines and power lines, at the oil field in the southwest corner of its Kuparuk River unit. The Shark Tooth prospect, also known as Drill Site 2S, would be near existing Drill Site 2K pad, 1.5 miles east of the Tarn Road.

ConocoPhillips told the state it expects to begin mining activities toward the end of the year, install infrastructure early next year and bring the satellite online near the end of 2015. Drilling would conclude some 18 months later in mid 2017, but, as ConocoPhillips noted in its application, “As detailed design progresses, the schedule may be modified.”

The project description is an expanded version of the one ConocoPhillips filed with the U.S. Army Corps of Engineers toward the end of last year and the beginning of this year.

The Shark Tooth project is one of several that ConocoPhillips explicitly mentioned in a recent press release announcing near term activities made more economic by the passage of Senate Bill 21, which revises the fiscal regime for oil production in Alaska. In a May 13 email, ConocoPhillips spokeswoman Natalie Knox Lowman wrote, “We are working with co-owners on funding for DS-2S and hope to sanction it in late 2014 to early 2015.”

ARCO discovered Shark Tooth with the KRU-21-10-8 exploration well in the late 1980s, but the prospect lay fallow until ConocoPhillips drilled Shark Tooth No. 1 in 2012. The company considered developing Shark Tooth from the existing DS-2L, DS-2M or DS-2K pads, but decided that those plans would tax the abilities of existing drilling technology.

The state is taking comments on the proposal through June 10. The current permitting covers the physical development.

ConocoPhillips is currently envisioning a 9.83-acre gravel drilling pad capable of accommodating 24 wells drilled at 30-foot spacing, plus associated infrastructure. A pair of permanent “snow fences” to the east and west of the pad would reduce snow cover.

A 1.5-mile gravel road would connect the pad to the Tarn Road. The road would cross the existing Meltwater pipelines, requiring a temporary shutdown during construction.

ConocoPhillips said it considered two options to avoid the production loss associated with a shutdown. The first was to build a bridge “similar to a highway roadway overpass,” an idea the company ultimately rejected because of its greater cost and its greater impact to the tundra as a result of the additional gravel needed for the bridge.

The second was to shorten the vertical support members to make it easier to build an overpass, but ConocoPhillips worried the lower pipelines would interfere with wildlife.

To accommodate these projects, ConocoPhillips would build a 16.2-acre gravel mine near the proposed drilling site to provide some 296,000 cubic yards of material.

ConocoPhillips said it considered using the existing Mine Site F and Mine Site C for gravel, but found both inadequate. Mine Site F was opened in 1985 and provided materials for the Kuparuk River unit until 2003 when “the remaining material in the pit was deemed to be unsuitable for road or pad construction due to the amount of fines present.” The company is rehabilitating the mine under U.S. Army Corps oversight.

Using Mine Site C would require an 18-mile ice road shared by heavy-haul trucks and regular field traffic, which ConocoPhillips believes would create “safety concerns.”

The production stream of oil, natural gas and water would be transported by pipeline to the existing Central Processing Facility No. 2. Sales quality crude would be further transported along the Kuparuk Oil Pipeline to the trans-Alaska oil pipeline while gas and seawater would be returned to Shark Tooth for reinjection to maintain field pressure.

—Eric Lidji