Alaska’s famed North Slope is estimated to contain several billion barrels of viscous, heavy oil and now there seems to be an affordable way to extract much of it from the ground.
That’s according to recently shared details of a 2-year polymer flooding project led by University of Alaska Fairbanks (UAF) petroleum engineering researchers and Houston-based independent Hilcorp technical staff.
Launched in 2018 at Hilcorp’s 35,000-acre Milne Point heavy oil field, the enhanced oil recovery (EOR) approach was a first for the North Slope.
The scope of the project was to inject a mixture of polymer and seawater into the heavy oil reservoir (called the Schrader Bluff sandstone) via two existing horizontal injection wells. Two existing horizontal wells were used for production.
The public-private collaboration reports that the polymer flood generated twice the recovery compared to the flood operation which started 2 years before. This was achieved with what the researchers describe as a low polymer utilization rate.
While water flooding is estimated to achieve a recovery rate of 19-21%, polymer flooding is expected to return up to 39% of the oil in place by 2050.
By 2035, modeling by private company Hilcorp showed that by 2035, the EOR project could result in a gradual increase of 5.9 million barrels from the 2.9 million barrels expected under the flood.
Late last year, a Hilcorp executive informed the Alaskan media that the polymer flooding had resulted in approximately 630,000 barrels of crude compared to what was expected under flood conditions.
Polymer economy outperforms water injection
In EPS 210000Presented earlier this month at SPE’s annual technical conference and exhibition, authors from UAF and Hilcorp shared an economic evaluation of the pilot test.
Based on their baseline economics, the Milne Point polymer flood is expected to result in an additional 15% salvage factor, which translates to nearly $43 million in added value over the life of the project.
“Additionally, each dollar invested returns $5.05, and each barrel of oil produced over the life of the project costs approximately $8.35 to produce,” the newspaper read.
The authors then explain that the economic model used “is very sensitive to the price of oil” and that a wide range of prices going from 20 $/bbl to 80 $/bbl was tested. They said that even at prices of $40/bbl, all economic simulations projected a “positive and robust” net present value as a result of the polymer flood.
One input that the authors say is much more predictable is his model’s cost inputs, which include purchasing and transporting the polymer for about $1.50 per pound. Other project costs include an additional $100,000 annual maintenance expense compared to a traditional water injection operation and a one-time charge of $3 million for polymer injection equipment.
The models show that during the first period of the EOR project, each pound of polymer should produce an additional barrel of oil. At the end of the period, or around 2050, additional oil production is expected to drop significantly, in which case approximately 6 pounds of polymer will likely be required for each additional barrel.
One of the other highlights of the project is that after polymer injections began, the water cut-off of the test pad dropped from 70% to less than 20%.
A beacon of hope for a region in decline
Hilcorp became Alaska’s largest operator after buying all of BP’s Alaskan business in 2019 for $5.6 billion, a deal that included acquiring a 100% stake in the field. Milne Point.
Under the management of Hilcorp, which began in 2014 with BP still holding interests, the Milne Point field has been seen as a beacon of hope for the depleting North Slope region.
In 2018, the field averaged around 21,000 B/D, but in early 2019 production increased to 32,000 B/D. Months after the polymer flood began that year, Hilcorp announced that its 2020 target for Milne Point was 40,000 B/D.
Now, after establishing clear success, UAF researchers have recommended that polymer flooding be extended to the North Slope to exploit the region’s vast viscous and heavy oil reserves.
Such expansion may already be underway.
The results of the pilot project were so good initially that a competing operator, Italian supermajor Eni, launched its own polymer injection project after monitoring the progress of Milne Point’s business.
This is according to a 2019 project progress report which stated that the outcome of the Eni polymer injections was unknown. The update from 2 years ago added that Hilcorp had already implemented plans for additional polymer flooding at three other well pads.
Several North Slope fields are estimated to contain a combined total of 30 billion barrels of heavy oil, which is only 6% of the state’s average production of about 448,000 bpd. Production in the state peaked in 1988 at just over 2 million B/Ds.
It is in this context that the development of the heavy oil fields has found support from the Alaska State Government which this year announced new funding of $5 million for the next phase of the flooding project. polymers from Milne Point. Over $7 million in funding from the US Department of Energy was used to launch the pilot phase.
For further reading
EPS 210000 Economic Evaluation of a Polymer Flooding Field Test in a Heavy Oil Reservoir on the Alaskan North Slope by Cody Keith, Xindan Wang, Yin Zhang and Abhijit Dandekar, University of Alaska Fairbanks; Samson Ning, Reservoir Experts, LLC/Hilcorp Alaska LLC.