By the OGJ Online Staff
HOUSTON, Nov. 15 -- Alaska's Department of Natural Resources (DNR) has approved an expansion of the North Slope Point Thomson Unit (PTU), which under the current plan of development should result in production by 2008.
ExxonMobil Corp., the operator, estimates the high-pressure Thomson reservoir has reserves of more than 8 tcf of gas and 200 million bbl of condensate.
Gov. Tony Knowles said, "We are very pleased that the owners are advancing this exciting oil and gas project at this time. In addition to producing oil and liquids, the gas resources of this field could play an instrumental role in the development of a gas pipeline from the North Slope."
DNR said the proposed expansion leases were due to expire and their inclusion in the unit extends the lease terms for so long as they are committed to the unit. DNR required firm commitments to explore the expansion area and proceed with development of the underlying oil and gas reservoirs as conditions for approval of the expansion application.
The lessees agreed to drill an exploration well by 2004, begin drilling development wells by June 2006, and complete seven development wells by June 2008. Failure to fulfill the drilling or development commitments would result in the surrender of the expansion acreage and payment of compensation to the state. The royalty rate was increased to 20% from 16 2/3% on the most valuable leases included in the expansion.
Exxon discovered the reservoir in 1977 and drilled 14 wells by 1983. Between 1983 and 2000, development scenarios were studied and additional seismic data was acquired. BP also drilled several other prospects in and near the unit and announced the Sourdough discovery.
DNR said advances in drilling technology for high-pressure gas injection played a role in making the development of Point Thomson feasible.
The major PTU owners, ExxonMobil, BP Exploration (Alaska) Inc., Chevron Corp. unit Chevron USA, and Phillips Alaska Inc., plan a gas cycling project, stripping the liquids and then reinjecting the dry gas for pressure maintenance. There is a possibility of future gas sales and satellite oil field development.
ExxonMobil plans to ship the produced fluids west through the Badami sales pipeline and then into the Trans-Alaska Pipeline System.