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Vol. 12, No. 5 Week of February 04, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Shell proposes 18 wells

Company’s MMS exploration plan targets 2 Camden Bay prospects, August drilling

Alan Bailey

Petroleum News

Shell Offshore Inc. has filed with the U.S. Minerals Management Service the company’s exploration plan for oil and gas leases in the eastern part of the U.S. Beaufort Sea outer continental shelf. The plan proposes the drilling of 18 exploration wells between 2007 and 2012 in the Camden Bay area, offshore the eastern end of the North Slope and the Arctic National Wildlife Refuge. Of those wells, 13 would target the Sivulliq prospect while five would target the Olympia prospect.

The company also hopes to acquire some seismic data in the Beaufort Sea during the summer open water season, but it is unclear whether any seismic will be shot in the Chukchi Sea.

Sivulliq, formerly called Hammerhead, lies due north of Flaxman Island on the western side of Camden Bay. The prospect contains a known oil pool penetrated by two exploration wells drilled by Unocal in 1985 and 1986. According to information published by MMS the prospect is estimated to contain 100 million to 200 million barrels of technically recoverable oil in a Brookian sand reservoir. But the oil pool has not been fully delineated.

The Olympia prospect, on the eastern side of Camden Bay about 7 miles northwest of Barter Island near the village of Kaktovik, was known as the Erik prospect in the mid 1980s. In 1984 a lease sale bidding consortium consisting of Unocal, Shell and Amoco commissioned a site survey of the prospect, which they had presumably identified from earlier seismic surveying. And according to Shell’s exploration plan, a mudline cellar for a proposed Erik well was excavated, but the Erik well was never drilled.

“The dominant geologic structure within the (Olympia) prospect area is a northeast-trending anticline that extends along the general alignment of the five proposed Olympia wells,” the plan says.

Three wells in 2007

At an Alaska Support Industry Alliance meeting on Jan. 25, Rick Fox, Shell’s asset manager for Alaska, said that Shell plans to initially evaluate the Sivulliq prospect by drilling three wells in the summer of 2007. The Kulluk, a floating drilling platform Shell purchased in 2006, and the drillship Frontier Discoverer will drill the wells.

Shell is refurbishing the Kulluk in McKinley Bay, Canada. The Discoverer is coming from Singapore and is being equipped for arctic drilling, in addition to having its external hull strengthened for operating in sea ice. Both vessels will move to the Beaufort Sea in time for the drilling season, and will leave again at the end of the season.

“If everything works out we’ll plan to have them over here for about an Aug. 1 start,” Fox said.

Two ice-class support vessels — an icebreaker and an anchor handler — will accompany each drilling vessel. And Shell has built a new ice-class, 500-foot oil spill response vessel to support its Beaufort operations, Fox said.

ASRC RTS will manage and operate the on-site oil spill response equipment and has been preparing Shell’s comprehensive oil spill response plan. Fox emphasized, however, that modern drilling technology has significantly reduced the risk of an oil spill and that “our first line of defense is prevention.”

Beaufort seismic

Also in the summer 2007 Shell hopes to acquire some new seismic data for its Beaufort Sea leases, Fox said. The company had hoped to start acquiring this data in 2006 but difficult ice conditions in the summer prevented a planned open-water Beaufort seismic program. Shell is conducting a research program that is investigating the acquisition of seismic data from floating sea ice during the winter (see “Shell flags intent to test winter seismic in Beaufort” in the Jan. 21 edition of Petroleum News).

And according to the exploration plan “there is some question as to whether Shell Offshore Inc. or other operators will conduct seismic in the Chukchi in 2007.”

Shell’s program of Beaufort Sea site surveys, searching for drilling hazards and shallow gas, will continue in the 2007 open water season. A short project to collect cores from the seabed will also provide information about the soil strength and composition, Fox said.

Marine mammal monitoring

Shell is also working with the U.S. National Marine Fisheries Service, the North Slope Borough wildlife department, ConocoPhillips and others to continue the marine mammal monitoring program that the company operated during the 2006 open water season.

“This is a very important part of our business,” Fox said.

According to the exploration plan Shell will station marine mammal observers on all of the vessels involved in its exploration program. The company may also fly aerial surveys along north-south transects to monitor marine mammals in the area of its drilling operations.

Shell also proposes to try using unmanned aerial vehicles to augment the manned aerial surveys. Initially, part of the purpose would be to evaluate the application of drone technology in wildlife surveillance, following experiments already conducted into the use of the technology.

“It is not likely that a drone program (in 2007) would either replace or significantly reduce the anticipated manned aerial programs,” the exploration plan says.

In the Chukchi Sea, a drone program might offer opportunities for more wide-ranging data collection, in lieu of vessel-based programs, the plan says.

Arrays of acoustic recorders in the Beaufort and Chukchi Seas will also help document the regional distribution of marine mammals. And Shell is conducting several studies into arctic marine wildlife.

Support from West Dock

Shell is negotiating the use of the Prudhoe Bay West Dock to support the fleet of vessels involved in the Beaufort Sea drilling program. A 400-foot diesel supply vessel will transition from south Alaska to the Beaufort Sea to support the operations. And service vessels will haul the various forms of waste from the drilling operations to Prudhoe Bay, although the exact onshore disposal arrangements for the waste have yet to be finalized.

The company is contracting the use of a support base facility at Deadhorse and construction of that facility should be complete by April 1. Flight operations will be based out of Deadhorse.

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