Oil & Gas
Every Last Drop
Developing methods to extend an oil field’s life
By Julie Stricker
Incomel | iStock

n June 20, 1977, first oil from the massive Prudhoe Bay oil field flowed into TAPS. It was the first trickle of the 24 billion barrels of conventional oil estimated to be in the oil field, of which 9.6 billion barrels was thought to be technically recoverable.

Four decades later, more than 12 billion barrels of oil have been produced at Prudhoe Bay alone, with billions more produced from satellite fields and other areas on the North Slope. That increase in technically recoverable oil (from 40 to 60 percent) is due to several factors, including improved drilling technology, better mapping, and the use of production enhancements such as water and natural gas injection.

That still leaves a lot of oil in the ground at Prudhoe Bay, not to mention other areas of the North Slope—some of it in deposits of heavy, viscous oil and shale oil that are more difficult to extract and process, according to the Resource Development Council (RDC). But oil companies on the North Slope are actively looking for and implementing new ways to bring that oil to market.

Scott Montgomery, a professor at The Henry M. Jackson School of International Studies at the University of Washington, writes: “Oil companies have ways of being nimble in hard times, such as selling assets, adjusting production levels, and seeking mergers. Now rapid innovations in drilling, seismic imaging, and data processing allow well-run companies to cut costs in multiple areas.”

“We’ve been able to significantly turn around production in Cook Inlet and the North Slope by investing and offering a fresh look at old assets. In the not-so-distant past, Alaskans were faced with the prospect of having to import LNG. Since then, we have invested more than a billion dollars to ensure Southcentral Alaska has a reliable supply of energy.”
Dave Wilkins
Senior Vice President
Hilcorp Alaska
New Dogs, Old Tricks

Texas-based Hilcorp is the newest player in Prudhoe Bay after completing its $5.6 billion acquisition of BP Exploration’s Alaska assets on July 1, 2020. Hilcorp Alaska splits Prudhoe Bay ownership three ways with ExxonMobil and ConocoPhillips.

One of the questions raised when Hilcorp’s bid for BP Exploration’s assets became public was whether the privately-owned company would be able to increase production in the aging oil field. So far, its track record in Alaska has proven promising.

Hilcorp has had operations in Alaska since 2011, when it took over the Cook Inlet natural gas and oil operations from Chevron and later Marathon Oil. The company is known for its lean and efficient operations model, which quickly became apparent in Cook Inlet.

Instead of looking for new sources of natural gas, Hilcorp reworked the decades-old offshore oil platforms, focusing on boosting the supply of natural gas that powers much of Southcentral Alaska’s infrastructure.

In 2018, Hilcorp undertook a $90 million upgrade of its oil and gas delivery system in Cook Inlet, installing a pipeline to transfer the oil from wells on the west side of the inlet to the Marathon refinery in Nikiski instead of using tankers. Not only is the pipeline expected to reduce the risk of oil and gas leaks, it also reduces tanker traffic in Cook Inlet’s notoriously rough and gritty waters. In addition, it removes the need for the Drift River oil terminal, which sits within 20 miles of Mount Redoubt, an active volcano whose eruptions have disrupted oil operations twice.

Rich Novcaski, operations manager for Hilcorp subsidiary Harvest Alaska, says the change would cut the cost of transporting the oil by a third and extend the life of the Cook Inlet oil field by twenty years.

In 2014, after taking a 50 percent stake in operations at Milne Point on the North Slope, as well as interests in three other fields, Hilcorp increased production by 35 percent. The increase wasn’t due to any new finds or technology; Hilcorp simply built a new pad and drilled more wells, a total of sixty-one over five years including twenty-four in 2019 alone, according to the Alaska Oil and Gas Conservation Commission. As a bonus, Milne Point’s underlying structure is similar to that of Prudhoe Bay, which is where Hilcorp is focused next.

Dave Wilkins, senior vice president of Hilcorp Alaska, says the company’s focus on existing infrastructure is deliberate.

“We’ve been able to significantly turn around production in Cook Inlet and the North Slope by investing and offering a fresh look at old assets,” Wilkins says. “In the not-so-distant past, Alaskans were faced with the prospect of having to import LNG. Since then, we have invested more than a billion dollars to ensure Southcentral Alaska has a reliable supply of energy.

“Our business model has enabled us to increase production across the state, including Cook Inlet and the North Slope; serve the local Alaska energy market; and extend the life of fields.

“Given the low oil price environment, we are focused on improving the efficiency and run time of the existing wells and facilities at Prudhoe Bay,” Wilkins continues. “We’re optimistic about Prudhoe Bay production as we continue to learn more about the field.”

Mapping Resources & Going Long

Oil companies are using technologies, such as improved mapping using 3D and 4D seismic surveys, as well as LIDAR (Light Detection and Ranging) to get a better picture of the reservoirs and the layers of rock surrounding them.

That, coupled with vastly improved computers and data-processing technology, opens a window into just exactly where companies need to direct their drilling operations for best results, which can make even smaller pockets of oil recoverable.

One technological advancement that holds great promise is in the ability of new drilling rigs to extend their horizontal reach for miles out from existing pads.

In 2019, ConocoPhillips broke an Alaska record for longest rotary drill with its Doyon Rig 25 at its CD5 field, which is part of Alpine. Rig 25 reached a depth of 14,370 feet, then turned horizontally in the reservoir and drilled another 18,098 feet, according to ConocoPhillips. That’s six miles of drilling, or 32,468 feet.

A few months later, Rig 25 went even further at CD5: 33,768 feet.

“When we drilled the first horizontal well in Prudhoe Bay roughly thirty years ago, it almost felt like Christopher Columbus sailing off the edge of the earth,” Drilling Manager Chip Alvord said a few months after ConocoPhillips broke the record in 2019. “We just keep pushing the envelope. I didn’t think we’d ever be drilling wells like this.”

CD5 is west of the Colville River Delta, but by using lateral drilling technology, ConocoPhillips is able to reach additional resources in the National Petroleum Reserve-Alaska without further surface infrastructure development. And while initial production was estimated to be about 16,000 barrels of oil per day, at the end of 2019 the field was averaging 37,000.

ConocoPhillips is expecting more drilling records to fall once operations, sidelined in 2020 by the COVID-19 pandemic, get fully underway.

One reason is that the company expects to deploy its new extended-reach drill rig, Doyon 26, aka “The Beast.” The rig had just been transported to the Fiord West oil field in the spring when the pandemic shut operations down. It is capable of drilling 40,000 feet horizontally, and its extended-reach technology can access underground areas more than 7 miles from its surface location, or about 154 square miles. ConocoPhillips says Doyon 26 will allow it to reach areas previously thought to be economically, and physically, out of reach. The Beast can also be mobilized at other ConocoPhillips leases.

Going In

Oil companies have long used various methods of reinjecting water and other materials into oil wells to keep the pressure up and to increase production.

One of these methods is fracking, which involves injecting fluid into underground rock formations at high pressure. The high-pressure fluid fractures the rock layers, allowing oil and natural gas inside dense rocks to flow into a wellbore and be extracted. It is a method that has been used for decades in Alaska, both in Cook Inlet and on the North Slope, on a small scale, but in the past couple of years the method has been embraced on a larger scale on the North Slope, according to Montgomery.

Reinjecting natural gas into the wells is another method used to increase production.

Although plans for a natural gas pipeline from the North Slope have been talked about since the ‘70s, as of now Prudhoe Bay’s estimated 25 trillion cubic feet of natural gas reserves are stranded up north. Seven billion cubic feet per day of natural gas is processed at a facility at Prudhoe and then reinjected into the reservoir to increase production, according to ConocoPhillips.

ConocoPhillips plans to resume drilling at the CD5 drill site, part of the Alpine Field.
ConocoPhillips | Judy Patrick
The Leavitt/Aveogan on the water
ConocoPhillips plans to resume drilling at the CD5 drill site, part of the Alpine Field.
ConocoPhillips | Judy Patrick

Hilcorp Alaska is looking at another method to enhance oil recovery. It has partnered with UAF, Missouri University of Science and Technology, the New Mexico Institute of Mining and Technology, and the University of New Mexico to see whether a technique called polymer flood technology could be used to enhance the recovery of heavy oil on the North Slope.

The project is backed by $7 million from the US Department of Energy’s National Energy Technology Laboratory (NETL).

For instance, the Ugnu heavy oil deposit beneath Prudhoe Bay is estimated to hold 20 billion barrels of oil, according to the RDC. At this time, about 10 percent of those reserves are considered recoverable.

The five-year project is being tested on unconventional heavy oil deposits at the Schrader Bluff formation. The process involves adding polymers—repeating chains of materials—that increase the viscosity of injected water in a well and force oil into the production stream. The process is used overseas but so far not in the United States. Polymer injection tests started on August 28, 2018, using a custom-made polymer blending and pumping unit. The test is expected to continue through 2022.

According to NETL, early results have been promising. Operators are monitoring similar tests at Milne Point, and Eni Energy has started its own polymer injectivity tests. Hilcorp is also planning polymer floods at three other well pads.

Studies suggest polymer flooding could increase heavy oil recovery by 50 percent, adding tens of billions of barrels of oil to US reserves, according to NETL.

Expect more advances in the coming years. Oil companies in Alaska are always looking for new ways to improve production and efficiency. ConocoPhillips, for example, frequently asks its employees for new ideas, and in 2019, twenty-nine Alaska-based projects were moved up the pipeline. According to ConocoPhillips, one of its exploration wells, CD4-595, used an “optimized four-string design to drill the highest angle long-reach well” on the North Slope.

Hilcorp, after less than a decade in Alaska, has become one of the largest oil and gas producers in the state. Wilkins says it’s all thanks to Hilcorp’s workers.

“We credit Hilcorp’s success to our culture of empowering employees to think like owners and our focus on enhancing legacy conventional assets, such as Prudhoe Bay,” Wilkins says. “We’re excited about our future in Alaska and look forward to continuing to safely and responsibly develop Alaska’s natural resources.”