DNR Point Thomson Study Evaluated by Feds

Recently the National Energy Technology Laboratory (NETL) published an addendum to its August 2007 report titled “Alaska North Slope Oil and Gas, A Promising Future or an Area in Decline?” This report is often referred to by the State of Alaska and others for support in identifying the potential undiscovered reserves on the Alaska North Slope.

The April 2009 addendum made few changes to the original April 2007 Report, but one significant addition was the inclusion of a couple of paragraphs referring to Point Thomson. I have included the additional paragraphs below. The quote is from page 2-30 of the report and can be found at http://www.netl.doe.gov/technologies/oil-gas/publications/AEO/ANS_Potential.pdf.

The statement is significant because it evaluates a study commissioned by the Alaska Department of Natural Resources (ADNR) estimating the original oil and gas in place at Point Thomson and, I assume, is at least part of the reason for ADNR’s position arguing that Point Thomson oil is economic and should be produced first, prior to gas development. The federal report states that the DNR study was optimistic and that a more realistic reserve estimate would be approximately one-fifth the size stated in the DNR study.

Quote at Page 2-30

“Point Thomson is a large field, with a long and troublesome history. A study, recently commissioned by the ADNR (ADNR, 2008), provided an original gas in place (OGIP) estimate of 8.5 to 10.4 TCF, with original condensate in place of 490 to 600 million barrels of condensate (MMBC), and OOIP of 580 to 950 MMBO in the oil rim. The study suggests that under ideal conditions, with gas cycling and extended production of condensate and oil prior to gas blowdown (30 years with 22 producing wells and 8 injection wells), the field could produce as much as 420 to 515 MMBCF and 290 to 475 MMBO. The technically recoverable gas reserves produced under a scenario similar to the one above would be about 5.9 to 7.3 TCF. If blowdown were to occur early in the history of the field development, the models suggest that recovery of condensate and oil could be as low as 127 to 156 MMBC and 30 to 150 MMBO, but gas recovery would be in the 6 to 7 TCF range over a period of 12 to 15 years (ADNR, 2008). Additional scenarios were run with varying numbers of producing and injection wells, for periods of 10 and 20 years before blowdown, and results shown production ranges of: (1) 10 years of cycling – 300 to 370 MMBC, 225 to 370 MMBO, and 4.8 to 5.9 TCF, and (2) 20 years of cycling – 370 to 450 MMBC, 250 to 400 MMBO, and 4.8 to 5.9 TCF.

The findings appear to be optimistic and open to question, especially with respect to the recovery predicted for oil from the oil rim. The summary of findings (ADNR, 2008) cites the oil having American Petroleum Institution (API) gravity as high as 18°. This is the same range of API gravity as the heavy oil being produced from the West Sak and Schrader Bluff reservoirs, and recoveries are not projected to be more than 5 to 10%. The API gravity at the Kuparuk West Sak pool ranges from 22° to 10°, increasing with depth (temperature) and at the Milne Point Schrader Bluff pool it ranges from 22° to 16°. Thus a more realistic value for the oil rim at the Point Thomson field may be 58 to 95 MMBO, not the 290 to 495 MMBO theorized in the PetroTel study performed for ADNR. The Point Thomson owners “don’t believe the recovery of this heavy oil will be more than 5% --- nowhere near 50” (PN, 2008). They further state that “the oil rim is thin, discontinuous, and heavy oil --- molasses.””

The above bolding was mine and not in the original report. Additional discussion consistent with the above can be found at pages 3-98,99 where the NETL calls the ADNR study "overly optimistic."