ConocoPhillips targeting 62,000 new barrels by 2017

Photo/Michael Dinneen/AJOC File

ConocoPhillips’ North Slope work could add up to 62,000 barrels of oil per day to its production by late 2017, according to Alaska President Trond-Erik Johansen.

The production would come from four projects on the western Slope, where ConocoPhillips is the primary operator.

Early work to get to the reserves pushed the company’s capital investment on the North Slope to more than $1.6 billion this year, Johansen said. That’s up from just more than $1 billion in 2013.

“This year we are going to spend about twice the amount we have done on average (on the Slope) since 2008,” he said to Resource Development Council for Alaska conference attendees Nov. 19.

The developments will require about 1,450 construction jobs as well, he noted.

ConocoPhillips’ biggest project in terms of projected production is its Greater Moose’s Tooth-1 in the National Petroleum Reserve-Alaska, at about 30,000 barrels per day of peak oil with initial production by late 2017.

Johansen said the company is doing detailed engineering work on the 8.6-mile gravel road needed to get to the pad site.

The Bureau of Land Management issued a final supplemental environmental impact statement for the road Oct. 29.

Wetlands permits are being pursued through the U.S. Army Corps of Engineers and Johansen said he hopes BLM will sanction the project so construction can begin by early February at the latest.

“If it takes longer this project will be delayed a year because of the ice road seasons,” he said.

GMT-1 will cost about $900 million to fully develop, according to Johansen.

The company’s $1 billion CD-5 development is on its way to first oil a year from now. Johansen said production should peak at 16,000 barrels per day sometime in 2016.

“CD-5 is going to be the first element in the fight against (production) decline,” he said.

A six-mile road to the drill site and the gravel pad have been completed and work on a 1,400-foot bridge over the Nigliq Channel of the Colville River is underway.

Johansen said the bridge sections are being skidded out on rails to the nine supporting piers rather than being put in place with a crane to maximize safety and minimize environmental impact.

Installation of a pipeline, power and production facilities along with drilling activity are all on tap for the coming year, he said.

Smaller developments, Shark Tooth-1 and 1H NEWS (Northeast West Sak), in the Kuparuk Field will add about 8,000 barrels per day each, he said.

ConocoPhillips is about a 55 percent working interest owner in Kuparuk.

Shark Tooth-1 is a new drill site on the southern tip of Kuparuk. The target there is thin sands on the edge of the field, Johansen said, that were previously undiscovered.

With $500 million of total investment, first oil should come in late 2015 from Shark Tooth-1.

A challenging viscous oil development is the 1H NEWS that will require some ingenuity.

“We are going after it with some very smart but very expensive technology,” Johansen said.

The plan is to drill five horizontal production wells and 14 vertical injection wells. The injection wells will have chokes on them to regulate water flow to optimize specific areas of production, he said.

Funding approval for 1H NEWS is expected early next year with first oil in early 2017.

The larger projects are on top of increased drilling activity throughout Kuparuk with new rigs. Since mid-2013 ConocoPhillips has added two Nabors drill rigs to the field and increased production through workovers and new wells.

“Through September we added 8,000 barrels per day just on this rig program from these two rigs,” Johansen said. “That was just through September; I think the latest number I saw was closer to 9,000 barrels a day now.”

Johansen also announced Nov. 19 that ConocoPhillips agreed to add another Nabors rig to the field.

In July, the company announced a contract with Doyon Drilling to build a new rig for the field.

Each new drill rig requires a direct and secondary workforce of about 100 people.

The added drilling and subsequent production has helped slowed Kuparuk’s annual production decline from about 7 percent in to 1 percent over the last two years, Johansen said.

“Stop the decline; that’s what it’s all about isn’t it?” he said.

Elwood Brehmer can be reached at [email protected].

11/18/2016 - 10:21am