Phillips gears up for oil exploration near Anchor Point
The 152-foot-tall derrick, shipped in from Wyoming, is the largest rig operating in Alaska, according to Paul Mazzolini, statewide exploration team leader for Phillips.
While the rig is large, drilling operations and related facilities cover an area of only about 650 feet by 310 feet on the bluff overlooking Cook Inlet west of the Sterling Highway about 5.5 miles north of Anchor Point.
The drill site is called the Hansen well after landowner John Hansen, who leased the surrounding 11 acres or so to the drilling partners.
Using a technique called "extended reach drilling," the drill will grind its way down through the bluff about 6,800 feet before curving at a 45-degree angle to reach about three miles out under the Inlet to seek oil.
Based on an updated computer analysis of data from two offshore wells drilled by Mobil and Pennzoil in 1967, Phillips geologist Bob Swenson believes drillers have a good shot at finding commercial quantities. Some oil was found at the 1967 Starichkof State No. 1 well, but the site was not developed, he said.
It would take about three to five million barrels of oil to make the project viable to plan production drilling and perhaps more wells on the site, Swenson estimated.
Phillips Alaska Inc. is fronting 75 percent of the cost of the exploration well, with Forest Oil Corp. picking up 25 percent and Devon Energies 5 percent, according to Phillips spokeswoman Dawn Patience.
The exploration phase is expected to cost about $18 million to $23 million, she said.
While saying that drilling from land, then angling under the Inlet bed, offers protection from offshore oil spills, Mazzolini noted that working so close to homes along Sterling Highway is an unusual situation.
In an effort to monitor any potential effects on local water wells, 40 wells, including 21 within one mile of the derrick, were tested before drilling began, Patience said.
After about six years studying the entire basin and the possibility of exploring the old Starichkof offshore well, the Hansen test site was pinpointed based on requirements that it be 500 feet from the high-water mark and at least one-quarter mile from Stariski Creek.
"This is a lot different from most of the wells we drill in Alaska," Mazzolini said.
With most residential drinking water wells in the area tapping water 25 to 150 feet deep, he said drillers are taking the unusual step of casing the oil well with steel pipe sealed with cement down to the 700-foot level.
"That’s well below where any of the neighbors get water," he said.
In addition, Swenson said four 30-foot wells were dug around the rig to regularly monitor for any potential contamination.
Drill foreman Ray Springer said most of the 50 to 70 workers typically at the site are from the Kenai Peninsula.
Springer, a retired Arco engineer and fisherman from Seldovia, now a Phillips consultant, said that 45 of his 62 workers on site last week were from the borough, with about 15 hailing from south of Nikiski.
While the directional-angled method of drilling offers environmental advantages and allows a smaller footprint for the rig, Phillips officials acknowledged there are also practical and economic advantages as well.
While oil is the target on this lease, drilling manager Marty Lemon said tests will be conducted for natural gas as the drill digs.
Once the planned 18,500-foot drilling depth is reached about mid December, the data and samples collected will be analyzed to see if a sustained drilling operation is feasible.