After the Sag River State well was drilled we had a lot of problems that were immediate and exceedingly necessary to solve. Among those were we had to have a permanent airstrip, we had to have some kind of air control over that airstrip.
We had to define what the workforce would be to begin development drilling.
We had to understand what our road network might be to cover the area. How much gravel would be needed in order to build roads and build airstrips?
What would be the eventual size of the workforce? How would you house them? How would you feed them?
How would you transport them back and forth? Just a million problems like that. We dealt with those things, also at the same time we were trying to deal with the fact that we had other acreage on the North Slope down to the south in the various development contracts,
and we had obligations to drill those wells too.
So there were a lot of things happening all at once and not the least of my problems was the fact that we were deluged
with requests from within the company and within Humble and within other companies.
But also the press descended upon us like a hoard of locusts;
it was unbelievable the number of press conferences we had to hold and take them up to the Slope and all that sort of thing.
So it was rather chaotic.
In 1969 I was moved to Dallas as the Alaska coordinator and at that time we initiated the process for unitization of the Prudhoe Bay Oil Field
along with BP as a joint effort, and after a short while called in all the various other companies who would likely be owners
in the participating area that we could essentially draw up on the basis of the seismic coverage in the couple of wells that we had.
The other thing, of course, was the pipeline and when could we have a pipeline, and what would be the volume that it would handle,
because you can’t drill up an oil field and just leave it sit.
There were two things going on at the same time; one was trying to really build an oil field, determine its limits,
find out what the volumes would be, design a pipeline, and consider all these things interlocking and occurring at the same time.
A very complex problem. Well at the same time what happened? We had the famous oil spill off Santa Barbara.
That started the environmental movement and a lot of opposition began to crop up almost immediately about Prudhoe Bay and particularly about the pipeline.
The other thing that developed about that same time was that the federal government had earlier issued a stop on all further leasing on the North Slope,
because of the native claims, lack of settlement.
They had never signed treaties with the United States for the dispositions of lands,
and so they had brought suit and that was another major obstacle. Actually, these two items were the major hang up in getting the pipeline under way.
If the pipeline can’t get underway then the drilling for development purposes in Prudhoe Bay can only go so far.
Then it has to stop because there’s no place to put the oil and there’s no sense in making a
major, major investment without the certainty that you’re going to be able to market your product.
So in 1970 I was seconded to the Alyeska Pipeline Service Company as manager of government relations, a far step away from a geologist.
But I had the background in Alaska to handle that sort of thing and so for two years I was in that position,
and my major accomplishment was assisting in getting the native claims settled by the Act of December 1971, which removed one of the major obstacles to building the pipeline.
That work necessitated a lot of time in Washington, D.C. and a lot of time in Juneau, but was effective eventually.
The pipeline probably would have been delayed even further, but the Yom Kippur War of 1973 came along and along with the Arab embargo,
and the gas lines at the filling stations were miles long, and the price shot up to an unheard of 60 cents a gallon.
That was a major incentive for the congress and the president to fast track the permission and legislation for the pipeline;
so it was signed in ’73 and construction began in ’74 and was eventually completed in 1977 as the largest,
private construction effort ever mounted and completed.
The pipeline was 789 miles long from Pump Station Number One at Prudhoe down to the terminal at Valdez and now Ice Free Port,
it was completed in ’77. The first barrel of oil went out in June, and was transported by the
ARCO/Juneau tanker away from Valdez to the lower 48.
So that was a successful, if long term effort. Nine years after the discovery was the first oil transported.
The Prudhoe Bay field was unitized before the first oil was transported out and that unitization was
completed just a few weeks before June of 1977. The field was developed by both BP and ARCO.
ARCO was operator in the east half, and BP was operator in the west half.
The field eventually had something on the order of 2500 conventional perforations.
There were 42 drill sites, most of the drill sites could handle a number of wells,
the Christmas trees would be maybe 20 feet apart; just far enough to move that rig to enable a clean start on a new hole.
The spacing was 168 acres with some areas being developed on 80 acre spacing.
The maximum production through the pipeline was in 1988 as I recall, right at two million barrels per day.
The field has expanded dramatically with other pools in what is generally called the Prudhoe Bay field,
but there are other satellite fields in the vicinity both to the west and to the east.
All of these fields are located on or very close to the crest of the Barrow Arch, which leads you to believe that was certainly a
major controlling factor in the migration pattern and the trapping patterns that led to the ultimate accumulation that are ultimate to this day.
We still have no access or no production in Anwar to the east, but we have introduced gradually production to the west,
and primarily stratigraphic traps in younger rocks vis a vis the Alpine field overinto the Colville Delta Region of NPR
8 now, then the Naval Patrolling Reserve Alaska.
In order to understand the size and volume of Prudhoe Bay, you have to look at it from a geographical standpoint to some extent.
The area of the main reservoir, the Sadlerochit Reservoir at Prudhoe Bay occupies some 254 square miles.
That’s about 163,000 acres.
The whole structure is about 45 miles long and about 18 miles wide.
Over to the west is the Kuparuk Field and that was discovered by a Sinclair well,
the Ugnu [ph] well in 1969 and that is in the Kuparuk formation of lower cretaceous age.
It’s a much finer grain sandstone, silt stone sequence with a number of fault blocks partially stratigraphically trapped,
but basically on the Colville [ph] high. The Kuparuk Field on its own has produced over 2.3 billion of oil and is still expanding in size.
Now in contrast to what we’ve just seen, this is a slab from a core in the lower Cretaceous Kuparuk formation from Kuparuk Field and this is a rather fine grain silt stone totally oil saturated and will produce about a 22 degree gravity oil.
But being so much finer grain, the porosities and permeabilities here are in the hundreds for millidarcies and much lower as far as porosity is concerned,
but nevertheless still for a long time the second largest producing field in the United States and cumulative production of
2.3 billion barrels of oil even from that fine grain silt stone.
The Kuparuk was a sort of lost second cousin to Prudhoe for many years and even though it was discovered in ’69
which was immediately after the Prudhoe discovery.
It didn’t seem as if it would be as commercially profitable or even profitable at all to develop
one reason being that the gravity at Kuparuk is about 22 degrees wherein Prudhoe it’s about 28 degree gravity oil.
Also, there’s no gas cap at Kuparuk and it requires a lot of assistance in water flood and NGL injections in order to produce the oil.
The NGLs come from Prudhoe Bay which produces about 15 million a day and most of that is re-injected locally into
Prudhoe Bay reservoirs or a good portion’s shipped over to Kuparuk for their utilization. Prudhoe Bay actually has some 2,500 plus of well penetrations.
It’s developed with six gathering centers, three on the east, three on west originally operated separately by BP and Arco, but now all operated by BP.
There is a central gas processing facility that is capable of handling 8½ billion cubic feet per day of gas
and separating out the NGLs by lowering the temperature to minus 40 degrees Fahrenheit
and then re-injecting the gas into the gas cap as I said using some of the NGLs for miscible injectent [sp].
The other aspect of maintaining reservoir pressure at Prudhoe is determined by water flood project.
Early in the life of the field, a causeway was built out into Prudhoe Bay and at the end of the causeway
is a sea water treatment plant that can process a million barrels per day of sea water for injection
into the lower portion in the oil rim to move the oil toward the producing wells.
In addition, there’s about 500 million barrels per day of produced water that is used for re-injecting for the same purpose.
A few years ago there was also a miscible injection plant set up in the middle of the field to process NGLs and other materials for
various kinds of tertiary recover processes.
The field today has decreased in production and levels from its max of 2 million barrels per day
and is now producing, probably in the neighborhood of 450,000 or 500,000 barrels per day.
I have here a list of the cumulative production totals for the North Slope and there’s some rather interesting numbers here.
There are 9 fields and 37 pools. The major features obviously are Kuparuk.
That field, that field has five pools in it and its cumulative production to date, and this is as of July of 2014, the cumulative production is 2.556 billion barrels.
Prudhoe Bay has 13 pools. The largest by far is the Prudhoe main producing Sadlerochit reservoir which has accumulative of
11.570 billion barrels of oil.
The total North Slope oil production number is 16,498,144 barrels – 144,000 barrels I should say.
Add to that the NGLs that have been produced on the slope and you have 3 fields and 11 pools.
The fields are Endicott, Kuparuk, and Prudhoe and Kuparuk is relatively small as is Endicott, but Prudhoe has eight pools
and to date has produced 652 million and the North Slope total is 681 million which makes the North Slope total as of July
17,180,000 barrels of oil.
The ultimate production at Prudhoe Bay will probably be in the neighborhood of between 14 billion and 15 billion barrels of oil.
I say probably because the drawdown of the last few hundred million or maybe even billion barrels of oil is in question for two reasons.
One, is the throughput of the pipeline is a limiting factor. If you don’t have enough oil going through the pipeline and it in effect becomes too slow so that the water – there is always some residual water –
will settle out of the pipeline and migrate to the bottom by gravity and then eventually corrode and in effect write an end to the ability to transport the oil.
Th other thing is is what’s going to happen to the price of gas – natural gas. If the economics of gas production at Prudhoe eventually outstrip the
economic benefits of remaining oil production, by then they might shut down the oil and produce the gas.
Now that depends on another thing, you have to have a gas line. You can’t transport the gas down through the Trans-Alaska Pipeline
and there have been many, many efforts and many, many roadblocks thrown up to making a viable gas line construction project supported by the federal government,
the state government, and the various major producers.
It’s seldom realized that there is probably on the order of, oh, 32 to 35 trillion cubic feet of gas available on the slope for eventual transport and marketing.
There is something on the order of 24 TCF in Prudhoe Proper and then at Point Thompson
or by Flatsman Island at the mouth of the Canning River right at the northwest corner of Anwar is the Point Thompson Field
being developed currently by Exxon Mobile and actually building a pipeline to transport NGLs
from Point Thompson to an offshore production facility at the Badami Field, which has a line that goes into the eastern half of Prudhoe Bay.
The Point Thomson Field has an estimated 8 TCF and about
an estimated 200 million barrels of NGLs. In addition to the gas on the North Slope has already been proven to exist,
there is approximately the same amount of gas proven in the Mackenzie Delta on the other side of the Canadian border to the east of Anwar.
So if a gas line were to be built south form the north slope through Fairbanks and east
to the Yukon and through Canada, then tie a line from the Mackenzie Delta, both on offshore to produce that gas could go down through
Canada. There is some talk about LNG production and shipping to foreign markets. That would probably be a pipeline would go down to say Anchorage
or Valdez to treatement facilities for transport. Primarily to send to the Far East.
It was awful. I kid you not. Is exciting and a lot of fun but it was so chaotic it's just unbelievable. I mentioned some of the things that descended upon
us. It was unending. Everybody had to come to Alaska and then everybody had to go to the North Slope and everybody had to go have their picture
taken and then they had to come and visit me for an hour or two and tell me about it.
One thing I neglected to mention, this brought it to mind.
One of my visitors after the discovery was Loren Ware. Loren Ware was the exploration manager for Sinclair and he had been the leading light in getting
Sinclair into Alaska, and I’d gotten to know him when we were in joint operations down in the Katella-Yakataga area. Loren got Sinclair the first
field party doing geology on the North Slope in ’58. He got the first seismic crew on the North Slope in ’62. He got them to drill the Colville Well which
unfortunately was dry and after that the powers that be in Sinclair lost all enthusiasm for Alaska. Of course, they drilled those six or seven dry holes
down in the foothills as well and there’s a long record of failure. Well, when it came time to
analyze and act upon the 1965 lease sale over Prudhoe Bay, BP and Sinclair were still partners and Lorin wanted to bid on Prudhoe Bay and his
management said no and in effect that was the end of Sinclair on the North Slope except for the acreage they still held over to the west. Well after the
discovery, Loren came by to see me one day. He’s a very gracious
person and we were friends. I personally liked him very well and I’ve often thought that almost there, but for the grace of God go I you know it’s sort of
that just that one more step and they would have been right in with BP and in the guts of the oil rim.
Absolutely. He would have been a hero.