Field/project development

Alaska North Slope Projects Mush On

A trio of oil projects gears up to boost throughput on the Trans-Alaska Pipeline System.

Group of husky sled dogs running in snow
Three oil projects could add fresh barrels to the TAPS.
Source: cgering/Getty Images

Alaska's North Slope is seeing a surge of activity as companies continue to advance big exploration projects closer to the goal of turning these fields over to production in the next decade.

Several projects are in the race to be the first to add fresh oil to the Trans-Alaska Pipeline System (TAPS) and, in the process, boost its throughput, which has fallen about 75% from its peak in the late 1980s to less than 500,000 B/D today.

While the future of thelargest project—US independent ConocoPhillips' estimated $6 billion Willow Project—awaits the results of a 45-day comment period on a draft supplemental environmental impact statement to the project's master development plan, a group of global E&P players are mushing forward on a trio of Alaskan North Slope projects.

The first is the Pikka Phase 1 oil project operated by Australian oil and gas major Santos. Located east of the Bear Tooth Unit of the National Petroleum Reserve in Alaska (NPR-A), where the Willow discovery was made in 2017, Pikka is on state land.

Santos and Spanish major Repsol, its partner in the project, revealed on 17 August that a final investment decision had been secured on the $2.6 billion project.

“Global oil and gas markets are seeing increased volatility, and countries are looking to diversify their supply sources away from Russia, which, according to the International Energy Agency, currently produces 18% of the world’s gas and 12% of its oil,” Kevin Gallagher, chief executive of Santos, said in the statement.

The Pikka Phase 1 development plan includes a single small-footprint drilling pad and electrified field operations and will use existing infrastructure, including the Kuparuk transportation pipeline and the TAPS, according to the company.

Production from the Pikka field is expected to be 80,000 BOPD gross, with first oil anticipated to begin flowing in 2026, Santos said.

Pikka is in the Nanushuk oil formation on state land east of the NPR-A. The Pikka Unit contains an estimated 768 million bbl of recoverable oil.

Pikka was discovered in 2013 by Armstrong Energy and Repsol with the drilling of Qugruk 3 discovery well. Santos picked up the Pikka asset with its purchase of Papua, New Guinea-based Oil Search in December 2021.

Santos is operator of the asset, holding a 51% interest, and its share of project costs is $1.3 billion. Repsol holds the remaining 49% interest.

A Billion Reasons

Fellow Australian independent 88 Energy earlier this month reported the results of its first independently certified prospective resource estimate at its Icewine East oil project on the North Slope.

The resource estimate came in at 1.03 billion bbl of oil recoverable from multiple reservoir zones. Substantial oil volumes were noted across all mapped play fairways, particularly the Seabee–Lower Basin Floor and the Shelf Margin Delta reservoirs.

“Resources of this magnitude present our shareholders with significant upside potential and opportunity, which is why we continue to focus on our Alaskan portfolio and believe significant value exists in our Icewine East acreage,” said Ashley Gilbert, 88 Energy managing director, in a company release.

“Importantly, it is worth noting that the Icewine East acreage has been significantly derisked by the recent Pantheon [Resources] drilling and flow tests on their adjacent acreage, as well as data from the Icewine 1 well logs, and, more recently, the leased Franklin Bluffs 3D data set. This work substantially increases our confidence in unlocking the potential of the Icewine East acreage and is, by far, the most compelling data suite the company has analyzed ahead of drilling any well,” Gilbert said.

88 Energy said planning for a new exploration well in the Icewine East acreage, which is scheduled to be drilled in 2023, is under way.

Rounding the Corner

UK-based Pantheon Resources also is continuing its work in the area, with the conclusion of drilling operations at its Alkaid 2 horizontal well.

In its most recent operational update on 18 August, the company said it had reached a total measured depth of 14,300 ft, which includes a lateral length of 5,300 ft.

The Alkaid 2 well, Pantheon’s first horizontal well on the North Slope, was spud in early July using the Nabors 105AC drill rig. The well is adjacent to the Dalton Highway and the TAPS and is about 4.5 miles from its Alkaid 1 discovery well drilled in 2015.

The Trans-Alaska Pipeline System (TAPS) includes the Trans-Alaska crude oil pipeline. It is commonly called the Alaska pipeline, trans-Alaska pipeline, or Alyeska pipeline, (or the pipeline as referred to in Alaska), but those terms technically apply only
The Dalton Highway runs alongside the TAPS, which transports oil 800 miles from Prudhoe Bay to Valdez, Alaska.
Source: Gerald Corsi /Getty Images

The company said that key objectives of the Alkaid 2 well include production testing of the oil formation encountered in the Alkaid 1 well and appraisal of an oil extension discovered in the Shelf Margin Deltaic at the Alkaid 1 and Talitha 1 wells.

"We have achieved another important milestone in demonstrating our ability to successfully drill a long lateral well. Globally, conditions for drilling oil and gas wells are challenging at present, with strong oil prices driving record demand for drilling and support services, resulting in higher costs and supply chain issues across the industry," said Jay Cheatham, Pantheon Resource's chief executive.

"Each milestone that Pantheon achieves translates into a reduction in risk and increased confidence in the potential of the large resource discovered to date. As always, we must remind investors that, despite the positive results so far, a definitive assessment of the commerciality of the well cannot be made until flow testing has occurred."

Next steps for the well include rig demobilization of the Nabors 105AC drill rig to make room for a smaller completions rig to move in and complete the well. Plans to perforate and stimulate the horizontal section about every 165 ft will require about 30 stages, the company said, adding long-term production testing of the oil zone previously tested at Alkaid 1.

Alkaid 1 tested an average of more than 100 BOPD via a small "through-tubing single frac," which perforated 6 ft of the 240-ft net pay interval. Alkaid 2 will test this same zone through a long horizontal section accessing several thousand of feet of oil-bearing section.