Hilcorp to boost its oil production on the North Slope

Hilcorp Alaska will start production at its new Moose Pad project in the Milne Point field on the North Slope in January with plans to increase Milne Point production from 23,000 barrels per day to 26,000 barrels per day by the end of the month and to 35,000 barrels per day by the end of 2019, the company said at the Resource Development Council’s annual conference last week.

A process plant for Moose Pad, which will produce viscous, or thick, oil is now 85 percent complete, David Wilkins, said Hilcorp’s senior vice president for Alaska.

Moose Pad is a new project within the Milne Point field, which is 50-50 owned by Hilcorp and BP but operated by Hilcorp. The field produces both conventional crude oil and viscous oil.

Wilkins told the RDC that development costs on Moose Pad, which will cost about $400 million in total, are estimated at $6 to $7 a barrel that is produced. Ultimately the project will involve 50 new wells that will produce about 85,000 barrels per day Wilkins said.

Milne Point is already producing 10,500 barrels per day of viscous oil from the Shrader Bluff deposit, which is separate from what is planned at Moose Pad, and Wilkins said the company has started using a polymer reservoir “flood,” (or injection), the first in Alaska, to boost output.

The project is at J Pad in the Milne field and, for now, involves two oil production wells and two injection wells.

A viscous oil resource of 1.3 billion barrels has been identified at Milne Point but only 10 percent to 15 percent can be recovered using conventional technology, Wilkins said. The polymer flood aims to improve that by loosening the thick oil, helping it flow and improving the recovery.

If the technique works it could be used at other North Slope viscous oil deposits, he said, such as the western end of the Prudhoe Bay field and the Kuparuk River field, which also contain substantial in-place resources.

Viscous oil on the North Slope is typically rated at about 19 degrees on the API quality index, a lower quality than conventional crude, such as Prudhoe Bay oil that is about 28 degrees API. Viscous oil is chemically similar to the conventional crude produced on the slope but is cooler, and thicker, because it occurs in deposits that are shallower and close to the permafrost layer that underlies the North Slope.

Viscous oil now produced in the Kuparuk, Prudhoe Bay the Milne Point fields is now mixed with conventional crude oil and shipped from the North Slope through the Trans Alaska Pipeline System.

Hilcorp is also working on Liberty, another new slope project that will produce about 70,000 b/d, Wilkins told the RDC. Liberty is in shallow Beaufort Sea waters five miles off the north Alaska coast and a few miles northeast of the Prudhoe Bay field. Hilcorp is 50 percent owner at Liberty, and the project operator, with BP owning 40 percent and Arctic Slope Regional Corp., an Alaska Native development corporation, owning the remaining 10 percent.

Liberty would be produced with an artificial gravel production island with crude oil moving through a subsea pipeline built to shore, Wilkins said. Hilcorp received federal approval for the project Oct. 24 with a Record of Decision by the U.S. Bureau of Offshore Energy Management on the Environmental Impact Statement for the project.

“We’re now discussing the project with our partners BP and ASRC, but we think this project should be a go,” Wilkins said. If it is approved and built production would begin in fourth quarter 2023, he told the RDC.