Companies eyeing exploration in the National
Petroleum Reserve-Alaska (NPR-A) see prospects there as good to
great, despite a scarcity of previous drilling in the Reserve.
The industry acquired almost 580,000 NPR-A lease
acres in a recent U.S. Bureau of Land Management sale, with winning
bids totaling more than $63.8 million.
The June sale covered almost four million acres in
NPR-A's northeast corner. Anadarko Petroleum Corp. and Phillips
Alaska Inc., bidding jointly, took 34 of the 60 lease tracts awarded
in the sale.
TotalFinaElf E&P USA, TFE submitted the six highest
bids of the sale. It bid over $10 million apiece for two tracts
and $7 million on a third, according to BLM.
Jim Emme, Anadarko's vice president of exploration,
said the company has completed an independent resource assessment
of the central Arctic area in Alaska that included samples of source
"At the end of all this independent work, we determined
that there was as much oil as has been generated in the central
Arctic," he said.
"We're also looking for gas in the foothills, and
we consider that a tremendous prospect," he said. "There's good
reason for us to believe there is as much gas in the foothills as
sits in the Prudhoe Bay gas cap."
Emme said Anadarko's numbers agree with the latest
NPR-A resource assessment from the U.S. Geological Survey, presented
in May at the AAPG/SPE Pacific Regional Conference in Anchorage.
That assessment indicates nine billion barrels of
oil in NPR-A, he said, "with seven out of nine barrels coming from
NPR-A covers more than 36,000 square miles in northwestern
Alaska. It extends along the coastline in the north, the foothills
of the Brooks Range in the southwest and the Colville River in the
southeast and east.
Known prospects include the Beaufortian Upper Jurassic
Topset play plus a Brookian Clinoform play and a Torok structural
Anadarko and Arco Alaska heated up interest in the
frigid tundra area in 1995-96 with discovery of the Alpine Field,
just east of NPR-A.
"For us that was a huge positive step forward, especially
since it documented a new type of play in the Jurassic Alpine sand,"
Just as important, the discovery produced high-quality
crude of 40 degrees API gravity, an oil quality previously unknown
in the NPR-A area.
Phillips became operator at Alpine when it acquired
Arco Alaska's interests. The field now produces close to 100,000
barrels per day.
Their ongoing exploration activity near NPR-A made
Anadarko and Phillips logical participants in the June lease sale.
But the most significant result, and a major surprise, came from
the emergence of TotalFinaElf (TFE) as a new player in the Reserve.
TFE, awarded 20 tracts with winning bids totaling
more than $53.5 million, outbid the Anadarko-Phillips combination
on some tracts in head-to-head bidding.
"We've spent a number of years analyzing the petroleum
system in this area," said Randy Ponder, TFE exploration manager
for Alaska. "We believe the principal risks are reservoir and hydrocarbon
"TotalFinaElf's overall strategy is to explore areas
with high reward," he added. "The NPR-A has high potential and is
under-explored. It has all the ingredients required for hydrocarbon
accumulations: source rocks, reservoir rocks, traps, etc."
TFE's Ponder said the area of tracts acquired in
the NPR-A lease sale has many similarities to reported discoveries
"The source rock is the same, but is deeper," Ponder
said. "The overlying seal capacity is not an issue but there are
potential side seal issues. The traps are similar to analog accumulations."
TFE sees good potential for several new major oil-field
discoveries in NPR-A, "one of the areas of the world where there
is open acreage that has not been heavily explored by the industry,
offsetting new large oil and gas fields," according to Ponder.
"Our group's acquisition strategy was based upon
close consideration of socio-cultural, logistical and environmental
issues and the definition of our exploration campaign," he said.
"The ongoing evaluation of potential development scenarios will
be formulated in close cooperation with the local communities.
"TotalFinaElf, as a responsible oil and gas operator,
is conscious of the environmental challenges and sensitivities involved
in the exploration and development of this permafrost zone, characterized,
as you know, by flat tundra in summer covered by snow and ice in
To protect the tundra, companies can drill in NPR-A
only during the months when the ground is frozen, allowing truck
and equipment transport.
"We can only drill about three months out of the
year -- that's probably the biggest challenge we have, squeezing
the wells into that window," said Diane Kerr, Alaska exploration
manager for Anadarko.
Take time to move in and set up drilling equipment
and the exploration window shrinks even further, sometimes to as
little as two months, she added.
"What we're looking for (in the NPR-A area)," she
added, "is creative approaches to exploration."
Wanted: Something New
Dick Garrard, exploration manager-core areas for
Phillips Alaska, agreed that new ideas and approaches will be needed
to open up NPR-A.
"The biggest problem we're facing as we get more
remote is that the more conventional exploration drilling methods
have to change," he said.
The tundra in northwest Alaska has to freeze to a
depth of 12 inches to allow travel, according to Garrard. To save
time on equipment move-in, one rig is being stored on an insulated
ice pad about 120 miles west of Kuparuk.
"As we go to more distant locations we're having
to use a different technology. Up to now, we've been using conventional
ice roads," Garrard said. "On a good day -- and that's when the
temperature is minus 20 degrees Fahrenheit -- it takes about a day
to lay a mile of ice road."
considerations make the process tricky.
To get water for building ice roads, "we have to
know whether these are fish-bearing lakes, and how much water can
be taken down," he explained.
As an alternative, Phillips Alaska has experimented
with use of rollagons, all-terrain vehicles that move on large,
low pressure adjustable tires. Garrard said rollagons were used
to move Nabors Alaska's 16-E rig to the Hunter A well location inside
Rollagons can operate without penetrating the tundra
and don't require ice roads. However, time gained from direct transport
can be lost to drilling equipment disassembly and reassembly, Garrard
The short drilling season means "you're using a lot
of expensive equipment that can sit idle for six to eight months
of the year," he said.
And environmental regulations require drillers to
take exceptional precautions, including recovering and removing
all fluids, and grinding and reinjecting cuttings, according to
"Ideally, the only thing noticable when you come
back the next year is the wellhead," he observed. "I can't think
of anywhere in the world where exploration is as highly regulated
as it is on the North Slope."
Despite the challenges to drilling in the NPR-A area,
"we've come back here for three years," he added. "And if we can
get the money, we'll be back again."
'A Lot of Running Room'
Both Garrard and Emme welcomed TFE's apparent commitment
to NPR-A exploration.
"Frankly, I think it's good to see new companies
come in with their own programs," Emme said, especially since so
many wildcats will have to be drilled over such a large area.
He noted the lack of existing well control in much
of NPR-A, including vast areas that may average one wildcat per
Even in areas with more prior drilling, trap identification
and prospect generation rely on 3-D seismic and AVO or seismic-attribute
analysis, he commented.
Emme sees exploration progressing from Alpine into
NPR-A, with Jurassic targets the likeliest candidates. In the Moose's
Tooth area about 30 miles due west of Alpine, five out of the six
wells drilled have encountered hydrocarbons, all from Jurassic-level,
Alpine-like sands, he said.
"There's a lot of running room and we're looking
to extend that into NPR-A," he said. "As we step into the Moose's
Tooth area, we will find fields that will become (development) hubs
themselves, and others will become tie-backs to the Alpine field."
Long-reach horizontal drilling allows extensive and
year-round development from a hub site with minimal intrusion, and
Emme cited work at Alpine as a successful example.
"The goal there is to do something from a very small
footprint. The production facility on the surface amounts to two
pads, a total footprint of about 100 acres," he said.
Emme's outlook for the rest of NPR-A makes it clear
he's a big believer in the area's natural gas potential. A very
Noting that Anadarko also explores in Canada's Mackenzie
Bay area, Emme said he thinks the industry will need two natural
gas pipelines from the Arctic, not the either/or scenario now proposed.
He sees a gas price of $3.25 per Mcf holding the
U.S. supply steady and projects a price of $4 per Mcf to grow the
supply, since more gas will be needed in the future.
With additional potential for discoveries below the
Jurassic and "new drilling that's uncovered some new ideas and new
plays we didn't know existed," Emme is excited about the future
The biggest lesson so far:
"Good things can happen by drilling significant wildcats."