U.S. Minerals Management Service geologists are increasingly bullish on the Chukchi Sea, a remote area between northwest Alaska and Russia's Chutotsk Peninsula that is infested with ice and polar bears.
The United States has jurisdiction over hundreds of square miles of the continental shelf out to the international boundary. MMS geologists believe it could be the most prospective of all of the Alaska Outer Continental Shelf areas.
"There are good source rocks and thick reservoirs. The structures are like something out of the textbooks," said James Craig, an agency geologist for the Alaska region. More than 800 structures were mapped in the late 1980s using two-dimensional seismic methods, Craig said. A fresh look at the area by industry could yield more information.
There are increasing indications of interest from industry in the region, particularly by Shell, which drilled exploration wells in the Chukchi in the 1980s. An OCS lease sale is now set for the area in late 2007, and the agency expects applications to be filed soon for permits to conduct seismic work this summer.
Unlike the Alaska Beaufort Sea north of the North Slope oil fields, where the continental shelf drops off 50 to 60 miles from the coast, the Chukchi Sea covers a huge expanse of highly prospective continental shelf between Alaska and Russia, according to Kirk Sherwood, another MMS geologist working on the Alaska region.
Oil companies drilled five exploration wells in the Chukchi between 1989 and 1991 with modest results. Large oil pools were not discovered, and although natural gas was found, there was no way to market it. Since then, companies have had little appetite for exploration in very high-cost and remote frontier areas like the Chukchi.
Things may be changing. Energy prices are high and there is serious discussion of a natural gas pipeline to be built to the North Slope.
Shell makes no secret of its interest in the Arctic. The company considers the Arctic region one of the world's last remaining unexplored areas for oil and gas, Chandlar Wilheim, the company's Alaska exploration manager, told an Alaska business conference in Anchorage Nov. 16. Shell is rumored to be the company that requested MMS hold the Chukchi sale, but the agency won't confirm that. Shell bid and acquired extensive Beaufort Sea OCS acreage in an MMS sale held last March, but the company was one of just a handful of companies competing in that sale, and the only bidder on tracts far from shore.
Chevron also drilled one well in the Chukchi in the 1991, but whether it or other companies share Shell's optimism about the Arctic won't be known until the Chukchi lease sale.
Industry interest perked up after the MMS did a re-evaluation of data from Shell's Burger well and estimated the prospect could hold 14 trillion cubic feet of gas, and perhaps much more. Burger was drilled in 1990.
The Burger structure is huge, covering about 200,000 acres, about the size of the Prudhoe Bay structure on the North Slope. Sherwood said that if the entire structure were filled with gas - which he said is unlikely - it could hold more than 60 trillion cubic feet.
There are also indications of oil at Burger. There were oil shows in the well tests, and though Shell's one well found a gas reservoir, it's possible there also may be oil underlying the gas along the rim of the prospect, Craig said.
There were more than oil shows in another well Shell drilled, the Klondike prospect. An oil-bearing strata 20 feet to 30 feet thick was encountered in a structure that is even larger than Burger, said Kirk Sherwood, another MMS Alaska region geologist.
The results of the previous wells are just teasers because with just one well drilled, it isn't known how extensively the reservoir rocks may extend through the apparent structure, Sherwood said.
MMS feels the Beaufort Sea has commercial potential, too, but the continental shelf is narrower and the icepack is in constant motion during winter, unlike the Chukchi where it is more stable. The agency is about to publish revised resource estimates for the Alaska region but little petroleum potential is being assigned to areas of the Beaufort Sea beyond the edge of the continental shelf.
That's because of technical and economic factors - development of any oil found that far out in the Beaufort Sea would pose formidable challenges - and partly because so little is known about the geology, according to Sherwood. It is known that the continental shelf drops off into the deep Arctic Ocean basin. The bottom of deep ocean is usually not a good place to look for oil-bearing sedimentary rocks, but Sherwood said there could be fragments of continental shelf that could hold sedimentary rocks with oil and gas. Geologists just don't know, he said.
"The deep-water areas north of the Beaufort shelf edge probably don't contain the same oil-source and reservoir rocks that created the vast oil accumulations near Prudhoe Bay," Sherwood said. "Different and probably younger petroleum-bearing rocks may be present, but we just don't have any direct information about that."
Tim Bradner can be reached at tim.bradner@alaskajournal.com.
