New technology has long been one of the driving forces behind oil production, and in this week’s Oilgram News column, At the Wellhead, Tim Bradner explains how a major is using new methods in Alaska with the hopes any success could be more widely applicable — and profitable — in the future.

In the search for new sources of crude, ConocoPhillips is investing a half-billion dollars to boost the production of difficult-to-access shallow onshore deposits on Alaska’s North Slope.
The so-called “viscous” deposits are essentially conventional oil that has seeped up to shallower levels. The depth makes the oil cooler and thus thicker and more difficult to flow.
Also, at shallower depths bacterial action has eroded some of the lighter ends of the crude, making it somewhat heavier.
The deposits that ConocoPhillips is targeting are in the Kuparuk River Field, where the company is already producing about 15,000 b/d.
The I-H North East West Sak, or IH-NEWS, is due to be complete by the end of the year and will add 8,000 b/d at peak production, bringing total production to about 23,000 b/d.
There is not much of a market for viscous crude. In fact, Conoco has to pay a penalty for mixing its heavier crude (about 19 API) with the lighter grades normally carried in the Trans Alaska Pipeline System (TAPS).
So why spend so much for such a small and unprofitable stream of production?
Because the potential is enormous.
Viscous oil resources on the North Slope are large, with an estimated 5.5 billion to 7.4 billion barrels of oil in place in parts of the Kuparuk River, Milne Point and Prudhoe Bay fields where viscous oil is being developed, according to state geologists.
Not included in these estimates are substantial viscous oil resources in the western part of the Kuparuk field, which are not now targeted for development because they are shallower and cooler, which makes them more difficult to produce than the resource now being tapped, according to Mike Driscoll, ConocoPhillips’ manager of the project.
Oil in place is the oil physically in the reservoir rock. The important number, however, is the estimated recovery, or the amount that can be economically produced from the in-place resource.
That is estimated at 15% to 20% in the parts of West Sak now developed, which represents the better reservoir areas, Driscoll said.
In comparison, oil recovery is much better in conventional fields, typically 40%, and even higher in high-quality reservoirs such as Prudhoe Bay, where recovery may eventually exceed 50%.
Still, development of the viscous deposits is moving forward because of new technology that solves some of the sticky problems that have plagued production.
A 2103 per-barrel tax credit that applies to all new production and is especially beneficial at times of low oil prices is also a factor, ConocoPhilips said.
“West Sak is a significant resource, and despite low oil prices, this is a project that ConocoPhillips Alaska and its co-owners believe is a viable investment,” ConocoPhillips spokeswoman Natalie Lowman said.
BP and ExxonMobil are partners with ConocoPhillips in the Kuparuk River field, which includes the West Sak viscous oil project.
Producing companies began efforts to produce the viscous oil in the 1980s, but those were plagued with difficulties.
“The sand is the No. 1 problem [at West Sak],” Driscoll said.
The sand breaks loose in the unconsolidated reservoir rock at West Sak and, entering wells, it can damage pumps and other machinery.
Another serious challenge has been waterflood “breakthroughs,” where water breaks a channel through unconsolidated producing sands.
ConocoPhillips addressed this by injecting a polymer into the holes, sealing them. Waterflood breakthroughs, called “Matrix Bypass Events” by ConocoPhillips, have been cut by about a third since the technique was introduced two years ago, Driscoll said.
The company also successfully employed a fine-mesh screen inserted into an open-hole section of the well that is now reducing sand coming into producing wells. Previous efforts to keep sand out with screens or gravel “packs” also impeded the oil flow. The new screening technique slows and stops sand inflow but does not impede the oil, Driscoll said.
While the effort to boost production employs these new techniques, they will also employ a tried-and-true method developed in the early years of viscous oil production.
The wells planned at IH-NEWS will be multilaterals with up to five producing legs.
That method involves the use of several underground production wells, or legs, drilled off one vertical well to the surface.
It was first developed by ARCO and BP, which purchased Milne Point, a field adjacent to Kuparuk, from Conoco in the early 1990s.
Just as shale and other tight oil plays were uneconomic not too long ago, if the technological and efficiency gains seen in those sectors are any indication, these new viscous deposits may provide greater returns down the road.
In addition, if success is seen in this area, then the technology may be transferable to other areas in the world where the majors may have similar acreage, and the half-billion dollar investment could be a bargain.
Source: Platts