Texas company using new technique at offshore site near Anchor Point

BlueCrest Energy, an independent oil and gas company, may have cracked the code in developing the technically-challenged Cosmopolitan offshore oil deposit near Anchor Point in Cook Inlet.

The company is now producing about 1,200 to 1,500 barrels per day from Cosmopolitan, with the oil trucked to Marathon Petroleum Co.’s refinery at Nikiski, near Kenai.

Because of the difficult reservoir it has been a tough nut to crack for BlueCrest, which is based in Fort Worth, Texas.

Cosmopolitan was first discovered in the 1960s by Pan American Petroleum but not developed. Over the years two other owners, ARCO Alaska and Pioneer Natural Resources, have tried their luck in producing oil economically from the deposit.

BlueCrest is the latest owner, and it has deployed a new technique it developed in-house that the company hopes will solved problems.

Three of four wells now producing oil for BlueCrest incorporate a radical new “fishbone” concept. The conventional approach, to hydraulically fracture rocks by injecting fluids at high pressure, didn’t work as hoped at Cosmopiitan, said Andrew Buchanan, BlueCrest’s vice president for Alaska operations.

The company isn’t quite sure why fracturing didn’t work but it may be connected to conditions in the reservoir that react negatively to water.

The new fishbone technique, developed as an alternative to fracturing, involves drilling “multilateral” wells, Buchanan told the Alaska Oil and Gas Conservation Commission, a state regulatory commission, in a briefing last week.

These wells have several underground producing legs, each a separate well, drilled off a “mother” well drilled from the surface. The three multilaterals drilled so far by BlueCrest at Cosmopolitan have eight lateral wells.

Multilateral wells are common in the industry and are done on the North Slope, but the particular way BlueCrest is doing them is believed to be new.

The wells are being are drilled up into sections of the oil reservoir from the mother well below, which is different. Usually oil wells are drilled down into the reservoir from above.

The laterals are typically about 800 feet in length and are spaced about 800 feet apart, so that in a diagram the array looks like a fishbone, hence the name.

Buchanan and others at Bluecrest developed the technique in-house as a solution to the reservoir problem.

In 2020 the company will take the process one step further with plans for a “trilateral,” or three wells drilled off the single well to the surface, with eight shorter laterals drllled from each of the three. That means 24 separate wells producing oil into the well to the surface.

All of these wells are drilled laterally into the underground reservoir from the drill rig, which is located onshore. BlueCrest’s production facility, where crude oil is cleaned and dehydrated, is also onshore.

There were other problems that stymied work by other companies at Cosmopolitan. When ARCO Alaska owned the field were problems drilling through thick coal seams around the deposit.

Despite its modest size Cosmopolitan attracted attention as it was developed because is the first new oil find of significance outside the area of upper Cook Inlet where most discoveries have been made to date. It means there could be other oil finds in the Inlet too.

Geologists say the Inlet is more prone to discoveries of natural gas than oil because of its geology.

Gas has been discovered at Cosmopolitan by BlueCrest as well. It sits in a separate reservoir segment above the oil producing deposit, and is not part of the current development.

At some point the gas will be developed but because of its shallow depth it will require two small offshore production platforms to be installed.