A Shift in Plays On North Slope

Amid concerns over aging fields and declining production, new technology and some surprising geological discoveries are combining to reawaken Alaska’s petroleum promise, experts on the region say.

AAPG member Dave Houseknecht has worked on Alaska North Slope basin analysis and petroleum resource assessment for the U.S. Geological Survey since 1995. Tim Ryherd is a geologist with Alaska’s Department of Natural Resources Oil and Gas Division.

Both agree that oil exploration strategies are changing, and that economic factors are coming together to create a new Alaska boom in natural gas.

Historically, exploration strategy on Alaska’s North Slope was to look for Prudhoe Bay-type traps — pure structural traps or combination traps involving very large structures, Houseknecht said.

Along the way, companies sometimes chanced upon some pure stratigraphic traps — usually too small to be commercially viable unless they were located near existing infrastructure.

In the past six to eight years, two developments altered the traditional approach, he said. They are:

  • Advanced geologic and engineering technology allowed companies to consider smaller targets.
  • "Specifically, 3-D seismic in exploration mode, applied sequence stratigraphic concepts and directional drilling in exploratory and especially in developmental wells really reduced the footprint and expense of developing smaller accumulations," Houseknecht said.

    "In the 1990s, suddenly instead of 400 million barrels as a minimum viable field size, we saw companies stepping out on 100 million or even smaller fields," he said.

    "Technology allowed them to to start looking at stratigraphic traps as primary objectives," he said.

  • A "serendipitous" discovery by Arco Alaska in 1994 — announced in 1996 — "revolutionized North Slope exploration strategy and kicked off the hottest play in Alaska today, usually called the Alpine play," Houseknecht said.
  • The primary target — a lower Cretaceous turbidite sand — proved unsuccessful. The company took the project deeper because older wells in the general neighborhood had tested non-commercial amounts from upper Jurassic strata, Houseknecht said.

    The resulting discovery in the Alpine field, located on the Colville River delta on the eastern northern boundary of the NPRA, had an announced size of 429 million barrels.

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Amid concerns over aging fields and declining production, new technology and some surprising geological discoveries are combining to reawaken Alaska’s petroleum promise, experts on the region say.

AAPG member Dave Houseknecht has worked on Alaska North Slope basin analysis and petroleum resource assessment for the U.S. Geological Survey since 1995. Tim Ryherd is a geologist with Alaska’s Department of Natural Resources Oil and Gas Division.

Both agree that oil exploration strategies are changing, and that economic factors are coming together to create a new Alaska boom in natural gas.

Historically, exploration strategy on Alaska’s North Slope was to look for Prudhoe Bay-type traps — pure structural traps or combination traps involving very large structures, Houseknecht said.

Along the way, companies sometimes chanced upon some pure stratigraphic traps — usually too small to be commercially viable unless they were located near existing infrastructure.

In the past six to eight years, two developments altered the traditional approach, he said. They are:

  • Advanced geologic and engineering technology allowed companies to consider smaller targets.
  • "Specifically, 3-D seismic in exploration mode, applied sequence stratigraphic concepts and directional drilling in exploratory and especially in developmental wells really reduced the footprint and expense of developing smaller accumulations," Houseknecht said.

    "In the 1990s, suddenly instead of 400 million barrels as a minimum viable field size, we saw companies stepping out on 100 million or even smaller fields," he said.

    "Technology allowed them to to start looking at stratigraphic traps as primary objectives," he said.

  • A "serendipitous" discovery by Arco Alaska in 1994 — announced in 1996 — "revolutionized North Slope exploration strategy and kicked off the hottest play in Alaska today, usually called the Alpine play," Houseknecht said.
  • The primary target — a lower Cretaceous turbidite sand — proved unsuccessful. The company took the project deeper because older wells in the general neighborhood had tested non-commercial amounts from upper Jurassic strata, Houseknecht said.

    The resulting discovery in the Alpine field, located on the Colville River delta on the eastern northern boundary of the NPRA, had an announced size of 429 million barrels.

    "But since it went on line, the rate has been well ahead of predictions, so we expect the Alpine will go 500 million or more," Houseknecht said.

    "This is a pure stratigraphic trap," he added. "The significance is they found a reservoir that was previously unknown, and a trap type previously unknown on the North Slope."

    It exposed a petroleum system that had not been encountered in the region before, he said.

The Alpine Play

Houseknecht works for the USGS out of Reston, Va. He joined the Survey in 1992, serving as energy program manager until 1998. He has been working on Alaska North Slope basin analysis and petroleum resource assessment since 1995, and has represented the USGS scientific perspective of ANWR, NPRA and other Alaska oil and gas issues to Congress and the administration.

Most North Slope oil, he said, is expelled from super rich source rock in the Shublik Formation. It usually has a low API gravity, typically 25-30 degrees, and tends to have 1 percent or so sulfur content.

Oil tested from previous Colville wells apparently was a mixture from the Shublik and Kingac Shale, long known to be an oil prone source rock.

None ever had been sourced exclusively from the Kingac, Houseknecht said.

"Because the Jurassic reservoir was fine grained sandstones, it was difficult to produce oil from fine grained rocks," he said.

But the Alpine produced a 40 degree API gravity oil exclusively from Kingac Shale.

"Suddenly, we had a play that had stratigraphic traps of significant size and a fine grained reservoir that had in it a very light, low-sulfur oil that could be produced effectively," Houseknecht said.

The result has been a couple of federal lease sales in the last four years and about a dozen exploratory wells and a number of announced discoveries.

"Companies are actively pursuing the Alpine play and similar stratigraphic plays that were previously unknown or considered sub-economic," he said.

"In the work we (USGS) have done, the potential for Alpine-type petroleum systems exists across all of the northern NRPA — a broad fairway 200-250 miles westward across NPRA."

The USGS in 2002 released a new evaluation of undiscovered gas in NPRA, he added, "and basically documented the very broad extent of the play."

Plenty of Gas, But …

Also in Alaska, activity continues on the Barrow Arch, Prudhoe Bay’s main structure, and companies are developing satellites close to existing infrastructures at Prudhoe and to the west.

Some offshore lease offerings from the state and Minerals Management Service have been picked up close to shore, "but no one seems interested in stepping very far out into the outer continental shelf, " Houseknecht said. Some OCS finds in the early 1990s were not viable.

Ryherd said the offshore promises "huge opportunities. The north side of the Barrow Arch is underexplored, to say the least," he said.

"Gas is the exciting thing for Alaska’s future," he said. "If gas is part of the mix, then the whole state has potential. If you have an oil target with a fallback as a gas play, other areas become much more attractive."

"Right now, there is no way to market gas from the North Slope," Houseknecht said. "The Trans-Alaska Pipeline is oil only. Gas resources found to date have been a by-product of oil exploration — there has been no significant gas exploration so far."

Of some 35 trillion cubic feet of reserves known on the North Slope, most — about 25 trillion cubic feet — is in the Prudhoe gas cap.

Gas that is produced is reinjected.

Another very large gas and condensate field just outside ANWR and east of Prudhoe is the Point Thomson Field.

The field’s major operator, ExxonMobil, has not released reserve estimates, but others — including the state — say the potential is for 200-400 million barrels of liquids, oil and condensate, and five-six trillion cubic feet of gas.

Significant overpressuring has been a major engineering impediment to producing any of the liquids, he said. Reinjecting any gas would be difficult.

Discussion of building a gas pipeline from the North Slope has gotten more serious in the last two or three years, prodding some companies to acquire leases in the Brooks Range foothills, an area generally more gas than oil prone.

U.S. and Canadian companies have staked "very aggressive acreage positions in the foothills of the North Slope, expecting a gas market will exist in the relatively near future," he added.

They are conducting expensive seismic surveys, active field programs, and "a lot of outcrop work to constrain the subsurface geology in expectation of exploratory wells.

"If we see an agreement that allows a gas line to get started, everyone expects a very active gas exploration program within the next couple of years," he said.

And then, "you’re going to see everybody coming out of the woodwork," Ryherd said.

While the North Slope and adjacent offshore areas are seen as having the greatest potential in the near term, interior basins in central Alaska are gas prone.

Interest in those areas is driven mainly by the need for energy in rural Alaskan villages, Houseknecht said. There are some attempts to evaluate possible export potential if a gas line is built.

There is oil potential to feed local refineries, he said.

"Oil production from Prudhoe Bay is declining at a rate of about 10 percent a year. There is concern about the future viability of the Trans-Alaska pipeline system. The state and industry are seeking new reserves to keep the pipeline full and/or viable," Houseknecht said.

"It takes years to bring discoveries on line," he said, "so there is starting to be — I don’t want to say 'desperation’ — 'anticipation’ about finding reserves soon to keep the pipeline flowing."

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