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Weekly UpdatesThe best direction to reach black gold is not always straight down. With the high cost of oil, petroleum companies are always looking for better ways to suck the last drop of crude from mother earth. Satellite fields are providing new opportunities to increase production while extending the lifespan of Alaska's oil fields.
Satellite fields are pockets of oil found in areas near larger oil fields, where the processing infrastructure of the major field is used by the satellites to separate gas, water and crude oil.
TECHNOLOGY
Relatively new drilling techniques are now being used to reach these satellite reserves; two of the most common technologies are horizontal and directional drilling. They give producers options when it comes to reaching difficult oil reserves. They also increase a well's productivity and lifespan, while reducing the environmental footprint of an oil and gas operation.
Directional drilling creates a network of separate, interconnected well holes to allow the effluence of other smaller reservoirs.
This is especially true when working with reservoirs having small or isolated buildups of crude located at different drilling depths. Offshore drilling is another environment in which directional drilling can successfully be employed. Multiple targets can be reached from the same offshore platform. ConocoPhillips, the state's largest oil producer, and its sidekick Anadarko Petroleum Corp., took the best lessons learned over 30 years of North Slope oil and improved upon them. Alpine was the first North Slope field developed using exclusively all horizontal-well technology.
THE RIG
Horizontal drilling rigs are essentially the same as the traditional rotary rigs. The primary differences are the rigs used for horizontal drilling are more powerful and can pull more weight. That is why they are more expensive. Time is also a consideration, according to Matt Fox, North Slope development manager for ConocoPhillips. He said: "It takes a bit longer for horizontal wells because you first drill down to the reservoir, which could be about 7,000 feet, then you go out horizontally for up to two miles. In conventional wells all you have to do is drill down to the reservoir."
Since both horizontal- and directional-drilling techniques frequently use existing vertical well shafts, more offshoot wells can be drilled without causing any new havoc to the environment. They also maximize recovery from existing reservoirs by entering a greater cross-section of a formation. While this can bring about more oil, it also cuts back, overall, on the total number of wells.
Horizontal drilling literally cuts in at an angle of between 70 and 110 degrees. Besides being easier on the environmental impact, it also creates less drilling waste and uses less produced water. In addition, it provides access to gas and oil in flat, tight reservoirs that might be missed when punching a vertical hole.
COST EFFECTIVE
While the initial cost for horizontal drilling is higher than traditional methods of drilling, in the long run, it is more cost effective. It allows producers to maximize the rate of recovery efficiencies and minimize impact to the surrounding area.
The primary disadvantages of horizontal drilling, according to Fox, are the cost of rigs and the extended time it takes to drill a horizontal well. He says that the disadvantages are offset by the advantages.
"It isn't as much a technical thing as it is economic," said Fox. "The most important aspect of horizontal drilling is it allows us to develop reservoirs--economically--that we couldn't have developed 10 or even five years ago.
"That's because these wells give you the rate and reserves that make the cost worthwhile. All around the world, that's the most important thing that horizontal wells have brought to the oil industry; it's their ability to develop fields that we couldn't have developed using conventional wells."
NPR-A
Alpine was discovered in 1996, declared commercial in '98 and put into production two years later. Alpine is located about 35 miles west of Kuparuk on the border of the National Petroleum Reserve-Alaska.
The Alpine reservoir was conducive to horizontal well technology and using this technology provides for maximizing contact with the reservoir rock, while minimizing the footprint needed for the wells and facilities.
"Wells in Alpine and Alpine satellite areas were all developed using the horizontal drilling techniques," said Fox. "The reservoirs in that area tend to be low permeability (a measurement of how well the oil flows) and relatively thin. So using horizontal wells you can get higher rates and recovery."
The well spacing at Alpine is just 10 feet, and the surface area of the satellite field is about 13 acres of gravel.
According to ConocoPhillips, by contrast, the original Prudhoe Bay wells were about 160-foot spacing on gravel drill sites of 65 acres.
In August, ConocoPhillips announced the successful startup of Fiord, the first Alpine satellite oil field. Discovered in 1999, it is located five miles north of the Alpine oil field on Alaska's North Slope. The currently approved plan is for about 17 wells; it is expected to have a peak production of about 22,500 barrels of oil per day gross in 2008.
It is a roadless drill site that will be supported by aircraft or accessible by an ice road in the winter. Nanuq, a second satellite field, which is located about four miles south of Alpine, is slated for startup in the final quarter of 2006. Production from Fiord and Nanuq will be processed through the exiting Alpine facilities. Together, those fields represent about $650 million in capital reinvestment and are expected to have peak production of approximately 35,000 gallons, gross, in 2008.
MINIMIZE IMPACT
To minimize environmental impact of Nanuq, 50 miles of temporary ice roads were constructed last winter to move construction equipment, drilling rigs and drilling supplies to the site and nearby Alpine oil field. In July, ConocoPhillips and Anadarko Petroleum announced the discovery and test production from its Qannik accumulation. It is a satellite oil field overlaying the Alpine field on the North Slope with a recorded average production rate of 1,200 barrels per day. Still somewhat on the backburner, and moving geographically in a westerly direction, there are Alpine West, Lookout and Spark. The three remaining satellite developments are in the National Petroleum Reserve-Alaska. ConocoPhillips is continuing to pursue the required state, local and federal permits for Alpine West. There are several unresolved issues about the Alpine West project, including increasing project costs.
According to Fox, ConocoPhillips also is looking down the road even further than Alpine West, Lookout and Spark. Unlike those sites, which have been drilled and tested for oil deposits, there are still other potential sites that will be researched in the future. But right now, he says they are only an "X" on the map, and if there is money for exploration, those Xs on maps will become reality.
According to Fox, in large part due to satellite oil fields and technology like horizontal drilling, the oil producers will be able to extend the life of the Alpine infrastructure and Alaska's oil fields in general. "It depends almost 100 percent on the oil prices," Fox said. "But what we are looking at is 20-25 horizon for the Western North Slope and the other parts of the North Slope are looking at 30, 40 or 50 years."
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