The Ugnu deposit presents technological and economic challenges, however. BP will test a technology called cold heavy oil production with sand, or CHOPS, that is being adapted from techniques used with similar heavy oil deposits in Canada, Suttles said.

COHO No. 1 was drilled this summer in the Milne Point field, where BP is the operator. The additional wells BP will drill are part of a multi-year program of production testing BP plans, company spokesman Steve Rinehart said.

Heavy oil represents the potential of an additional 2 billion barrels that could be produced from the North Slope, Suttles said.

ConocoPhillips Alaska Inc. previously drilled an Ugnu test production well and has carried out limited production tests. The well was drilled in portions of the Ugnu that overlie the Kuparuk River field, where ConocoPhillips is the field operator.

North Slope producers and the state of Alaska have hopes that production of heavy oil as well as expanded production of viscous oil from the West Sak and Schrader Bluff deposits will help offset the decline of conventional light crude oil from the large producing fields of the slope.

About 50,000 barrels per day of viscous oil is now being produced from West Sak and Schrader Bluff. These barrels are mixed with about 650,000 barrels per day of conventional oil and shipped through the trans-Alaska oil pipeline.

West Sak viscous oil production will increase over the next 3 years if ConocoPhillips goes ahead with a planned new West Sak drill site in the Kuparuk field.

Rinehart said one concern producers have is managing the decline of conventional oil production so that there is enough light oil to mix with increasing volumes of heavy oil for shipping through the oil pipeline.

It would be difficult for the trans-Alaska pipeline to move heavy and viscous oil without mixing with conventional crude oil, he said.

The West Sak and Shrader Bluff deposits are essentially the same geologic formations that extend across the Kuparuk, Milne Point and Prudhoe Bay fields. These deposits are shallower, at about 3,000 feet to 5,000 feet overlying Kuparuk, which is about 6,000 feet deep, and Prudhoe, which is about 9,000 feet deep.

The Ugnu deposit ranges from 3,000 feet to 6,000 feet in depth, and is colder and thicker than conventional or viscous oils. The Ugnu has a large volume of potential resources in the rock, and the oil column, or the thickness of the oil layer, is much thicker than at West Sak.

Meanwhile, ConocoPhillips and BP are continuing to make progress in solving technical problems in producing viscous oil.

Frank Paskvan, BP's subsurface manager for the western Prudhoe Bay, said a number of facility modifications are planned to handle increasing volumes of viscous oil being produced. Because the oil is colder than conventional oil, production heaters have been installed on drill sites to heat the viscous oil so that it flows more easily.

The large Gathering Centers, which process crude oil and separate water and gas from oil, are also being modified to handle increased amounts of sand that flow with the viscous oil, Paskvan told an Arctic Energy Conference held in Anchorage Sept. 17.

Producers are also making progress on a serious problem that developed with some viscous oil wells where waterflood is used. Waterflood involves the injection of water down wells to flood the reservoir and push more oil out of the rock.

In some wells the water, under pressure, created channels through the porous sandstone to the producing well, bypassing the oil. When an oil producing well “waters out” it is essentially ruined.

“That's a bad day for the reservoir engineers, and there have been several of those,” Paskvan said at the conference.

One solution the companies are working on is a down-hole regulator valve to better manage the flow of water from the injection well into the oil-bearing rock formation.

Tim Bradner can be reached at