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BP aims for billions more barrels from Alaska

Operator BP expects to wring at least 2 billion barrels more crude from Alaska’s Prudhoe Bay oilfield, even after the aging giant has yielded over 11 billion barrels.
/ Source: Reuters

Operator BP expects to wring at least 2 billion barrels more crude from Alaska’s Prudhoe Bay oilfield, even after the aging giant has yielded over 11 billion barrels, far more than thought possible when it was discovered.

In addition to coaxing more medium sour crude out of the most productive field in the United States, BP is eyeing the once worthless shallow reservoirs of heavier oil that have become valuable as oil prices have surged to above $100 a barrel.

“No field the size of Prudhoe Bay has ever been shut in,” said Gordon Pospisil, a senior BP petroleum engineer who is leading the effort to tap the field’s heavy oil reservoirs.

“We’re still drilling 60 or 70 new wells a year and it comes down to a progression of technology, the resource value and the opportunity to access a very large oil in place volume using modern drilling techniques.”

BP’s focus is returning to boosting recovery rates at Prudhoe Bay, as it nears completion of a two-year project to rebuild the field’s transit pipelines after serious corrosion led to major spills and shutdowns in 2006. The problems cost it millions of dollars in fines and tarnished its carefully constructed reputation as a progressive oil company.

Output at Prudhoe peaked at 1.5 million barrels per day (bpd) before beginning to decline in 1988.

The field now pumps less than 400,000 bpd and production is declining at about 6 percent a year, yet remains the biggest producer in the United States.

Production at Prudhoe Bay already includes 50,000 bpd pumped from shallow reservoirs of unconventional viscous oil that flows 100 times as slowly as conventional oil.

Viscous oil could add hundreds of millions more barrels to Prudhoe’s capacity, but plans to spend $1 billion to boost the capacity of the field to produce viscous oil were scrapped earlier this year after Alaska raised oil production taxes.

For now BP and its partners ConocoPhillips and Exxon Mobil Corp are focusing their efforts on boosting productivity of Prudhoe’s old wells through new technologies.

These include adding special polymers and other additives to the water injected into the field to maintain reservoir pressure, helping to boost recovery rates by forcing more oil out of the less porous parts of the reservoir, Pospisil said.

Decline rates are also kept under control by modern drilling techniques, such as coiled tubing, which allows engineers to convert an old vertical well into a new state-of-the-art horizontal well to tap thin layers of oil-bearing rock at the fraction of a cost of a new well.

BP currently thinks these new investments will help recover another 1.5 billion barrels of Prudhoe’s oil on top of the 11.5 billion already pumped out of the ground.

But the new big goal is to make the 20 billion-barrel Ugnu formation of extra-heavy crude oil, which lies thousands of feet above the rest of Prudhoe Bay, into a recoverable resource.

The company expects only 8 percent of this massive resource can be economically recovered if extraction techniques now being studied prove successful.

BP drilled its first experimental well into the Ugnu formation and three more are planned this year, Pospisil said.