Alaska operators start Alpine field, take more leases

Dec. 4, 2000
Two US international oil companies started up Alpine oil field in mid-November on Alaska's North Slope, with one calling it "the standard by which all future Arctic developments will be measured" because of attention to technical and environmental detail.
Alpine field development is sequestered on 94 acres on two drill pads (first one shown). Areal extent of the oil reservoir is 62.5 sq miles. Photo courtesy of Phillips Alaska Inc.
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Two US international oil companies started up Alpine oil field in mid-November on Alaska's North Slope, with one calling it "the standard by which all future Arctic developments will be measured" because of attention to technical and environmental detail.

The other called Alpine the first in a "succession of new, important Alaskan oil and gas fields."

Ultimate recovery is expected to be 429 million bbl from Alpine field, 8 miles north of the Inupiat community of Nuiqsut on the Colville River. The field is to reach peak gross production of 80,000 b/d by Dec. 31. Working interests are Phillips Alaska Inc. 78% and Anadarko Petroleum Corp. 22%.

The field is the largest onshore discovery in the US in terms of ultimate recovery in more than a decade.

Alpine is the North Slope's westernmost oil field, lying just east of the National Petroleum Reserve-Alaska. It lies 50 miles west of the center of Prudhoe Bay oil field and more than 100 miles west of the Arctic National Wildlife Refuge, off-limits to operations.

Discovered in 1994, Alpine was declared commercial in 1996. Early wells flowed high-quality, 40° gravity oil from the Alpine formation, a sandstone at a true vertical depth of about 6,850 ft (OGJ, Oct. 7, 1996, p. 44).

Elevated twin pipelines were set up to carry sea water from Kuparuk River field to Alpine and produced crude to Kuparuk River field for transshipment through the 798-mile Trans-Alaska pipeline to Valdez.

Meanwhile, Alaska sold 149 tracts for $10.6 million at a North Slope areawide oil and gas lease sale Nov. 15.

Technology, environment, jobs

From the start Alpine field is under miscible gas injection, a form of enhanced oil recovery begun in 1983 at Prudhoe Bay field and late 1996 at Kuparuk River field.

The companies have completed 16 production and 14 injection wells at one drill site. Eventually more than 112 horizontal wells will have been drilled. The first site has equipment to generate miscible injectant from produced gas.

Alpine is a zero-discharge facility. The waste generated is reused, recycled, or properly disposed.

The field has no permanent road; ice roads are built in winter for transporting equipment and drilling supplies. The roads melt in spring, leaving the field's only access to small aircraft and no trace on the tundra, the companies said.

Environmental studies begun before discovery allowed positioning of drill sites and facilities for minimal effect on wildlife, waterfowl, or the Nuiqsut subsistence lifestyle.

Alpine is the first significant commercial oil production on lands conveyed to an Alaska native corporation under terms of the Alaska Native Claims Settlement Act. Under that law, 70% of the net revenues realized by Arctic Slope Regional Corp. are distributed among all regional corporations in Alaska, who share half of their receipts with the village corporations and their at-large shareholders.

Alpine construction took 3 years and 6 million man-hr and created 650-1,200 jobs/year in Alaska. Development cost will exceed $1 billion, more than $800 million of which went to Alaska contractors. The state is to receive more than $1 billion in taxes and royalties.

The field will provide Nuiqsut the opportunity to substitute cheaper natural gas for diesel as a fuel for village power generation.

Phillips, through its acquisition of ARCO's Alaska assets, earlier this year revealed the Meltwater North discovery a short distance from Alpine. It appears to be a 50 million bbl find. The discovery flowed 4,000 b/d of 37° gravity oil.

More leases sold

The state Department of Natural Resources said bidders filed 158 valid offers at the areawide sale, exposing $10.9 million.

A consortium of Phillips Alaska, AEC Oil and Gas Co., and Chevron USA submitted the sale's high bid, $669,024, for tract 0577. That was $116.15/acre, also the high for the sale. The minimum bid was $5/acre.

A partnership of Anadarko and AEC led the sale, submitting $1,454,668 in high bids for 42 tracts. Phillips, AEC, and Chevron exposed $5,788,396 for 32 tracts. Anadarko offered $382,649 in high bids for 15 tracts, BP Exploration (Alaska) Inc. $881,894 for 13 parcels, and AVCG LLC $754,560 for 11 tracts.