Alaska’s North Slope is the best conventional onshore oil play in the world.
That’s according to Bill Armstrong, CEO and president of Armstrong Oil and Gas, Inc.
And, he will give no quarter on his belief about how robust the future is for the North Slope’s prospects.
“With the proper application and interpretation of 3-D seismic AVO, there are many fields yet to be found,” he said.
Armstrong’s company, which began in a hundred-year-old garage in 1985 in Colorado, currently has 1.3 million acres under lease in the area, which is divided into three provinces: the Brooks Range, the Northern Foothills and the Coastal Plain. These comprise one million acres in the National Petroleum Reserve-Alaska and 300,000 acres on state lands east of Prudhoe Bay.
In short, Armstrong calls the area “incredible.”
“It’s a huge basin with multiple ubiquitous rich mature source rocks, lots of subtle hydrocarbon trapping geometries, and enormous legacy fields – Prudhoe Bay (15 billion barrels of oil), Kuparuk River (more than 3 BBO), Alpine (one billion) – and awesome new discoveries like our Pikka field which we discovered with Repsol, with more than 3 BBO recoverable in a 35-mile-long field,” he said.
The Pikka discovery, he believes, kicked off much of the Brookian Topset (also known as Nanushuk) play.
“Since Pikka, multiple huge fields have been discovered, among them: Willow, Mitquq, Stirrup and West Willow. Armstrong, Santos, CP and Repsol are leading the exploration charge. Wildcat and field extension success rates are in excess of 90 percent,” said Armstrong.
National Debate
Willow has been in the news lately, as the Biden administration recently approved a massive new oil drilling project. It is an area that purportedly holds 600 million barrels of oil. There was a hope, certainly among environmental groups and some of the state’s indigenous groups, that Willow, which lies within the 23 million-acre areas of the NPRA, would be off-limits. Joe Biden, in fact, during his 2020 presidential campaign, articulating his climate goals, said, “There would be no more drilling on federal plans, period.”
That was not to be.
(Since the announcement, some of these groups sued to stop it.)
In March, the administration allowed limited drilling in more than 13 million acres of NPRA (fewer than ConocoPhillips, which held the leases, wanted), while barring drilling in nearly 3 million acres of the Beaufort Sea.
The state’s senior senator, Republican Dan Sullivan, called Willow, “One of the biggest, most important resource development projects in our state’s history.”
Historically, Willow was one of four such reserves which was set aside in the early 1900s to guarantee a supply of oil for the U.S. military. No production existed at the time, but geologic information and surface seeps of oil suggested large resources across the North Slope.
Armstrong said the decision by the administration would only have been noteworthy had it not approved drilling.
“We weren’t really surprised that the federal government honored the leases ConocoPhillips held in the National Petroleum Reserve in Alaska. It would have been really scary for our country if they had not honored their contract,” he said.
For his part, Biden seemed to agree, saying, even while allowing exploration, “My strong inclination was to disapprove of it across the board but the advice I got from counsel was that if that were the case, I may very well lose that case in court to the oil company and then not be able to do what I really want to do beyond that.”
Local Opposition
While admitting this promised more-than-600-million-barrel Willow discovery is awesome, Armstrong does temper the excitement some.
“I don’t know if it is necessarily a game-changer or just an affirmation of the size and potential of the Nanushuk play,” he said.
Armstrong Oil and Gas has been involved in the discovery of more than 20 oil and gas fields in a variety of geologic provinces that include the Williston Basin, Powder River Basin, Wyoming/Utah Overthrust Belt, Green River Basin, Michigan Basin, Cook Inlet, Gulf of Mexico and San Joaquin Valley.
In Alaska, Armstrong sees both the myth and reality.
“For all its natural beauty, the state is fundamentally a place where people live,” he said.
Seems obvious enough, but to him it is a simple truth to which non-Alaskans should pay close attention before weighing in.
“Considering that 83 percent of Alaska’s budget comes from oil, it seems to us unfair that people in the Lower 48 could say to Alaskans, ‘Don’t develop your resources and keep your state as a massive nature preserve,’” said Armstrong.
Addressing the point about environmental concern, Armstrong claims the state is doing more than anywhere else in the world.
“For people who are worried about the impact of oil development should take the time to research the best environmental practices currently being exercised around the world. Alaska is one of, if not the most environmentally conscious clean-oil-producing regions of the world,” he said.
According to the Energy Information Association, in 2022, renewable energy accounted for about 33 percent of Alaska’s total electricity generation. Hydropower provided about 90 percent of that renewable electricity, with smaller amounts from wind, biomass and solar. Further, in 2010, the Alaska legislature enacted a non-binding goal for 50 percent of the state’s electricity to be generated from renewable and alternative energy sources by 2025.
This business of Alaska and its reputation for transcendent serenity is something Armstrong can only stand for so long.
“Parts of Alaska, maybe even most of Alaska, are beautiful. However, most people would be hard pressed to call the North Slope ‘beautiful.’ In the winter it is cold, frozen and inhospitable. In the summer, it is a mosquito-infested bog and even more inhospitable,” he said.
To hear detractors of the development who live in North Slope tell it, though, it’s not just the beauty they see – it’s their home and they don’t want it developed. Considering that new infrastructure will require a central processing facility, miles of gravel and ice roads, one or two airstrips, pipelines, a gravel mine site and three to five drill sites, they believe the environmental impact will be devastating. Rosemary Ahtuangaruak, mayor of Nuiqsut, a city with a population of 512 in North Slope Borough, and the city closest to the proposed development, told High Country News, “We shouldn’t be sacrificed for the national energy policy. Our way of life is important to us. We want to continue to harvest food on our lands and waters.”
Countering those concerns, Armstrong mentions another town in North Slope, Deadhorse, about 60 miles away, which puts the area in context.
“Taken as a whole, the lands around Dallas-Fort Worth Airport are arguably more beautiful than the lands around Deadhorse. Yet, when people fly into DFW, they are looking down on 15,000-plus Barnett Shale gas wells and nobody seems to take notice or complain. (By the way, I imagine more people fly into DFW on any given Monday morning before 10 am than will fly to the North Slope in a year’s time.) Yet, when people hear about drilling in Alaska, they act like it is spoiling the most pristine beautiful place left on Earth. They really need to go check the place out before they say that,” he said.
He believes Alaska’s importance to America’s energy needs is second to none – or maybe second to one – and cannot and should not be left unexplored.
“The best oil play that is currently happening in the world today that compares to the Brookian is the Exxon/Hess/CNOC play in Guyana,” he said.
Armstrong, who will present at the AAPG-Society of Exploration Geophysicists’ International Meeting for Applied Geoscience and Energy in Houston at the end of August, said the promise of Alaska’s North Slope is “an early-inning Guyana play,” complete with a larger fairway, potentially more targets, with similar (if not larger) volumes of oil yet-to-find.
“Quite amazing for a ‘mature’ basin that is onshore and in the United States,” he said.