Getting ready for winter drilling on the North Slope

It will be another busy winter drilling season on the North Slope.

Explorers are planning aggressive programs to test new discoveries along a recently-identified geologic trend on the western North Slope where discoveries of oil are being made.

Exploration drilling is typically done in the winter on the North Slope so that companies can move heavy equipment overland over ice and snow roads.

So far 11 new exploration and appraisal wells are scheduled in the Colville River area west of the large Prudhoe Bay and Kuparuk River fields, which are producing, as well as in the National Petroleum Reserve-Alaska further west.

Last year 10 were drilled, according to state records.

There may yet be more wells this year. Companies are likely to finalize additional drilling before the start of winter activity typically in December. The big attraction the Nanushuk formation, a formation that extends along the Colville and across the northeast NPR-A.

ConocoPhillips plans six to eight wells through the winter season, which spans late 2018 and early 2109, company spokesperson Natalie Lowman said Friday.

Two more test wells are planned by Oil Search, an Australian company, along with one well planned by a consortium of three Australian and one-U.S.-based independents.

ConocoPhillips has made several discoveries in the region including Willow, in the northeast NPR-A; Oil Search and Repsol, in a partnership, are in development planning for another discovery, Pikka, near the Colville.

New production from the area could reach 300,000 barres per day from the known discoveries in a few years, and the 2018-2019 winter season tests could add more.

ConocoPhillips has also released details of its planned Willow project development. In a presentation to an Alaska business group Scott Jepsen, the company’s vice president for external affairs, confirmed that a “stand-alone” oil and gas processing facility will be built for Willow, in the NPR-A.

To date new discoveries in the petroleum reserve have been close enough to the producing Alpine field, on state lands, that mixed fluids of oil, gas and water could be shipped to facilities there for separation.

Having a new processing plant at Willow, which will require a multi-billion-dollar investment, will facilitate prospects further west and north to be developed, such as “Willow West,” a new discovery to the west, Jepsen said. “The additional discovery at West Willow creates a possibility for a tie-back to the Willow hub,” Jepsen said.

ConocoPhillips is proposing to build a central oil and gas process facility at Willow with up to five drill pads and 50 producing wells on each pad; in-field roads and an airstrip, Jepsen said.

There will also be a temporary offshore artificial island in Harrison Bay, to the north, that would facilitate the unloading of large production process modules for the field.

The company previously said Willow is expected to cost $2 billion to $3 billion to develop, that “sanction,” or formal approval, could come in 2021 and that the field could be producing between 2023 and 2025.

Willow’s production is estimated at 100,000 b/d based on reserves estimated between 400 million and 750 million barrels.

Separately, the U.S. Bureau of Land Management, which manages the NPR-A, said it is streamlining its regulatory approvals for Willow by combining the company’s Master Development Plan, or MDP, and an Environmental Impact Statement, of EIS, documents that were previously done separately, and in sequence.

“Analyzing the proposed Willow prospect in a single MDP/EIS will result in a quicker and more efficient process for the approval of applications to drill,” a permit that BLM issues in the petroleum reserve, said Acting BLM Alaska director Karen Mouritsen said in a statement.

Under an internal Interior Department rule the draft EIS must be issued within one year of the Notice of Intent being published in the Federal Register, which means the document will be completed by summer, 2019.

The Final EIS and the federal Record of Decision come following a public comment period following release of the draft, but on a set schedule.

The company has two other NPR-A projects in development, GMT-1, due to begin production late this year, and GMT-2, expected to begin production in 2021. GMT-1 and GMT-2, costing about $1 billion each, are expected to produce 68,000 b/d combined.

ConocoPhillips has been pursuing targets in the NPR-A for years along with other companies, but it is the first to develop commercial production. President Warren Harding created of the reserve in 1923 as Naval Petroleum Reserve No. 4 in 1923. Although no oil had been discovered Harding acted on the advice of federal geologists who had visited the North Slope and found oil seeps.

The reserve was transferred to the Interior Department and BLM in 1975 and a second government-sponsored exploration program under the U.S. Geological Survey again failed to find commercial deposits.

Leasing to private companies began under the Ronald Reagan administration, but private drilling efforts by major companies again yielded no results until discoveries were finally made by companies including ConocoPhillips and Anadarko Petroleum Corp., who were partners in exploration, after 2000. ConocoPhillips bought out Andarko’s minority interest on the North Slope earlier this year.

There were dismal results for decades for the government and industry in finding commercial-scale deposits in the reserve. ConocoPhillips credits the development of new exploration techniques, like 3-D seismic, in enabling companies to find geological traps holding oil and gas that were missed previously.