Transcript Alaska Oil and Gas Activities

Alaska’s Natural Gas Potential
Mark D. Myers
Division of Oil and Gas
May 2001
Alaska Department of
Natural
Resources
http://www.dog.dnr.state.ak.us/oil/
The State Revenue Pie
Petroleum Revenue
Sources, (FY 2000):
Royalties, Bonuses & Rents1,2:
$731.9 Million
Royalties to Permanent Fund &
School Fund4:
$306.5 Million
Settlements to CBRF4:
$448.3 Million
(Includes Royalties & Taxes)
FY 2000 Unrestricted Revenue
Non-Petroleum
22%
Petroleum 3
78%
Taxes:
$910.4 Million2
(Oil & Gas Property Tax +
Income Tax + Severance Tax)
1 Includes Federally shared rentals
2 Source: pg. 25, DOR Fall 2000 Revenue Sources Book
3 Source: pg. 26, DOR Fall 2000 Revenue Sources Book
4 Source: pg. 23, DOR Fall 2000 Revenue Sources Book
dhz 01/01
Where Our Petroleum
Royalty Money Goes…
(70%)*
General Fund
(Spending)
*Year 2000 to date
(29.5%)*
Permanent Fund
(Savings)
State Spending
vs
State Income
(0.5%)*
Schools
**Production for new leases allocated
50% Permanent Fund
49.5% General Fund
0.5% Schools
dhz 01/01
Recent Dynamic Changes in Alaska’s Oil and Gas Business
mdm/mep 03/01
Proposed North Slope Activity - 2001
Improved Economics for
Commercialization of Natural Gas
a.
b.
c.
Royalty issues
Oil vs. gas in proven fields
Exploration in new areas and evaluation
specifically with respect to gas
mdm 01/01
Proved Gas Reserves
Gas Reserves (BCF)
North Slope
Badami Unit
39
Barrow
34
Colville River Unit
60
Duck Island Unit
843
Kuparuk River Unit
611
Milne Point Unit
North Star
Prudhoe Bay Unit
Other Undeveloped
TOTAL North Slope
Cook Inlet
TOTAL STATE
14
450
23,879
5,000
30,930
2,564
33,494
krb/03/01
Cook Inlet Historic Gas Consumption by Type
1998
Unaccounted
3%
5.6 Bcf
Field Operations
8%
16.9 Bcf
Liquified Natural Gas
35%
Power Generation
16%
78.1 Bcf
33.4 Bcf
Gas Utilities
13%
27.4 Bcf
Ammonia-Urea
25%
53.6 Bcf
wen/03/01
North Slope Gas Resources
Prudhoe Bay Field is the Primary North Slope Gas Resource
Mi lne Pt. Uni t
Kuukp ik Un it
C olv ill e Riv er
U nit
S andpip er Un it
Kup aru k R iv er
Un it
0
25 Miles
Duck Is lan d U nit
26
TCFPS-1
Pt. T hom son U nit
B adami U ni t
er
Deadhorse
5
TCF
Camden Ba y U nit
va
ni r
k
t ok
Ri
v
Pr ud hoe Bay Un it
ga
C
e
20
Beaufort Sea
1
TCF
r
ve
Ri
i ll
15
Sa
0.6
TCF
v
ol
10
Nor thstar Uni t
0.5
TCF
N u iq su t
5
Ca
i
nn
ng
Ri
r
ve
DO &G 4/ 99
jrc 2/99
Prudhoe Bay Field
Top Ivishak Structure
LEGEND
FAULTS
CONTOURS
GAS-OIL CONTACT
OIL-WATER CONTACT
WEST END/MAIN AREA
BOUNDARY
EARLY DISCOVERY
AND DELINEATION WELLS
CONTOUR INTERVAL 200'
ALL DEPTHS ARE TVDSS
Modified from ARCO Exhibit A-6 to PBU MGP Expansion Ap plication Testimony, DNR/AOGCC Hearing November 1991.
Generalized North Slope stratigraphic column displaying
oil and gas reservoirs and associated accumulations
LITHOSTRATIGRAPHY
SOUTH
NORTH
GUBIK FM
OIL
GAS
OIL &
GAS
QU
MU
COLVILLE GP
100
NANUSHUK
FM
GP
TO R O K
BU
RIFT
SEQUENCE
FORTRESS MTN
PEBBLE SHALE
KUPARUK C-KEMIK
LCU
KUPARUK A
JURASSIC SANDS
KINGAK SHALE
BARROW SAND
SAG RIVER FM
200
P
SHUBLIK FM
P
SAD
O
LE R
GP
Hammerhead
Kuvlum
BROOKIAN
SEQUENCE
SAGAVANIRKTOK FM
P
P
P
P
UPPER
ELLESMERIAN
SEQUENCE
2
IVISHAK FM
KAVIK FM
T
CHI
NORTH SLOPE FIELDS
AND
ACCUMULATIONS
SEISMIC
SEQUENCE
Flaxman Island, Badami
Ugnu
West Sak, Schrader Bluff
Tarn, Tabasco, Meltwater
Umiat
Gubik
Kuparuk River, Milne Point,
Pt. Thomson, Pt. McIntyre,
Aurora, Niakuk, Midnight Sun,
Kemik, Fiord
Colville Delta / Alpine, Fiord
Barrow
Prudhoe Bay, Eider, Sambucca,
Northstar
ECHOOKA FM
300
LOWER
ELLESMERIAN
SEQUENCE
PU
LISBURNE GP
ENDICOTT GP
?
NERUOKPUK FM
DEPOSITIONAL
UNCONFORMITY
EROSIONAL
UNCONFORMITY
Endicott, Liberty
EU
400
Lisburne
FRANKLINIAN
SEQUENCE
CRETACEOUS
SILURIAN DEVONIAN MISSIS- PENNSYL- PERMIAN TRIASSIC JURASSIC
SIPPIAN VANIAN
PALEOZOIC
M.Y.
B.P.
TERTIARY
QUAT.
MESOZOIC
CENOZOIC
AGE
SANDSTONE
SHALE
CONGLOMERATE
LIMESTONE
ARGILLITE
DOLOSTONE
P
P
CALCAREOUS,
PHOSPHATIC MUDSTONE/SILTSTONE
DO&G 12/00
Oil and Gas Trapping Mechanisms
Anticline
Normal Fault
ock
pR
a
ock
C
rR
i
o
v
ser
Re
k
oc
eR
c
r
u
So
Gas
Oil
R
oi
rv
e
es
k
oc
R
r
Cap Rock
Reservoir Rock
Source Rock
k
Roc
Cap
Gas
Oil
Reservoir
Rock
Source
Rock
Thrust Fault
Stratigraphic
Cap Rock
Gas
Gas
k
Roc
Cap
Oil
Reservoir
Rock
rce
Sou
k
Roc
Cap
R
Oil
ock
Unconformity
oir
erv k
k
s
oc
Re Roc
R
ce
ur
So
Gas
Oil
Cap Rock
Reservoir
Rock
Source Rock
North Slope Foothills
Cretaceous Depositional System Study
Area Permitted in Square Miles
3-D Seismic Survey Miles in Alaska
3,000
2,500
2,000
1,500
1,000
500
0
1996
1997
1998
Year
1999
2000
North Slope 3-D Seismic Survey Areas
Alaska Oil & Gas Leasing Program
178°
174°
166°
170°
A R C T I C
162°
154°
158°
142°
146°
150°
H
U
130°
126°
ALASKA
DEPARTMENT OF
NATURAL RESOURCES
(1002 Area)
ve
l ill
118° 68°
122°
R
National Petroleum
Reserve Alaska
EA
134°
ORT
Prudhoe
Bay
68°
138°
O C E A N
Barrow
DIVISI ON OF OI L AND GAS
C
Arctic National
Wildlife Refuge
MARK MYERS, DIRECTOR
I
JANUARY 2001
N
North Slope Sales
Foothills Areawide 2001 May 2001
Areawide 2001
Oct 2001
Areawide 2002
Oct 2002
Areawide 2003
Oct 2003
Areawide 2004
Oct 2004
Areawide 2005
Oct 2005
Kotzebue
U
c t ic
Fort Yukon
rc
T
A
a
Al
ie
sk
a
64°
Beaufort Sea Sales
Fairbanks
Nome
r
Areawide 2001
Areawide 2002
Areawide 2003
Areawide 2004
Areawide 2005
e
Areawide 1991
Areawide 2002
Areawide 2003
Areawide 2004
Areawide 2005
Talkeetna
S
Valdez
Anchorage
E
Bethel
0
Seward
St
ra
eli
162°
158°
154°
56°
Petersburg
Ketchikan
IFIC
166°
Sitka
Kodiak
f
ko
Cold Bay
Unalaska
A
L
it
I
Sh
56°
Juneau
F
A
200 MILES
Yakutat
Homer
Dillingham
100
60°
May 2001
May 2002
May 2003
May 2004
May 2005
Base Map: Transposed from AK, DNR, LRIS, data. Albers Equal Area
Projection. Redrawn by M. Pritchard & O.D. Smith in CorelDraw.
Kenai
TO
Oct 2001
Oct 2002
Oct 2003
Oct 2004
Oct 2005
Cook Inlet Sales
Mc Grath
60°
64°
150°
146°
O
142°
138°
134°
Arctic National Wildlife Refuge
D. Houseknecht, USGS Energy Resources Program 03/01
Gas Hydrates
commonly occur in Arctic regions and
deep ocean continental margins.
is a crystalline substance composed
of water and methane gas.
The solid water lattice accommodates gas
molecules in a cage-like structure.
One cu. ft. of methane hydrate will contain
as much as 180 cu. ft. of gas.
represent a large world wide resource,
500 to 1,200,000 tcf of gas.
North Slope Gas Hydrates
were confirmed in 1972 at N. W. Eileen
with cores and tests.
overlie the eastern part of Kuparuk Field
and the western part of Prudhoe Bay Field.
occur in the Tertiary Sagavanirktok
Formation (Ugnu sands).
occur between depths of 700 and 3000 feet
with free gas below 3000 feet.
reserves range from 37 to 44 tcf (15 times
that contained in the Messoyakha Field).
Free gas reserves estimated at about 1 tcf.
Geologic conditions being similar to those
at the Messoyakha Field suggests Alaskan
gas hydrates may also be producible.
Prudhoe/Kuparuk Complex
W
E
GAS HYDRATES
PERMAFROST
FREE GAS
UGNU
WEST SAK
KUPARUK RIVER
PT. MCINTYRE
MILNE PT.
NIAKUK
WEST BEACH
CASCADE
Ugnu Sands
West Sak Sands
PRUDHOE BAY
NORTH PRUDHOE BAY
SEAL ISLAND
GWYDYR BAY
SANDPIPER
KUPARUK
FM
LISBURNE
IV IS H A K
SA N
ENDICOTT
TERN ISLAND
NE
D STO
RNE
LI SB U
L IM E
KEK I
STON
E
CO N G
KTU K
LOME
R AT E
Oil
NOT TO SCALE
DO&G 6/95
Pa
r ks
GRI
Houston 1
Hw
y
15
20
25 Miles
Palmer
Pioneer Unit
(Generalized Bdry)
BLT-1RE,
3 CBM Wells
Wasilla
y
10
Kn
ik
Gl
enn
Ar
m
Cook Inlet
Activity
5
Hw
0
Lewis River
Fire
Is.
Li n
Beluga River
Anadarko
Lone Creek 2
ANCHORAGE
M
ts
Ivan River
e
Stump Lake
Pretty Creek
Pr
od
uc
North Cook Inlet
Moquawkie
Albert Kaloa
Nicolai Creek
Tesoro
Tyonek Deep
Tur
nag
ain
Arm
ta
ry
S ew
ard
Hw
y
P ro d
u ct s
ne
Hope
Trading Bay
Girdwood
Li
Chickaloon
Bay
Granite Point
ili
North Middle Ground Shoal
McArthur River
Birch Hill
W. McArthur River
West Forelands
Forcenergy
Kustatan Field 1
Swanson River
Beaver Creek
Nikiski
Forcenergy
Redoubt Unit 1
Map Legend
Whittier
Middle Ground Shoal
Redoubt
Shoal
Kenai
Cannery Loop
Drift R iver
Terminal
West Fork
Sterling
Sterling
Hwy
Soldotna
Kalgin
Island
Oil Field / Accumulation
Seward
Kenai
Unit Boundary
Marathon
Cannery Loop Unit 6
Hw
y
Hwy
Gas Field / Accumulation
Selected Wells
Proposed / Active Wells
Falls Creek
et
Marathon
Grassim Oskolkoff 1
Inl
Seward
Ninilchik
Sterling
Co
ok
Platform
Pipelines
Production Facility
Map Area
North Fork
Gas-Pro
North Fork well
Homer
c
Ka
h
a
em
k
y
Ba
Gulf
of
Alaska
Seldovia
DO&G 01/01
jrc/mep 01/01
Parks
Skwentna
Highway
Cook Inlet
3-D Seismic
Survey Areas
Willow
G
len
n
Sutton
Houston
Palmer
Wasilla
Big Lake
Susitna
Eklutna
Rive
r
Knik
A rm
Kn
ik
Susi
tn
a
Beluga
Lake
Chugach
State
Park
Anchorage
et
In l
Tyonek
Seward
Chickaloon
ok
Co
y
Ba
Lake Clark
Tu rna
gain
Bay
w ay
High
Hope
National Park
ad
Tr
in
Girdwood
Arm
g
&
y
Preserve
Ba
Nikiski
Drift River
Terminal
Salamatof
Kenai
Se
ed
ou
bt
Sterling
Sterling
R
e
Riv
Soldotna
K
r
High way
Kenai
en
ai
wa
Chugach
rd
Cooper
Landing
Moose Pass
River
nai
Lake
National
Forest
Ke
S ki
lak
La ke
ay
Highw
Kenai
Kasilof
Bo
un
da
ry
National
Clam Gulc h
Tuxedni
Bay
Tu
s
tu
m
en
Wildlife
a
La
k
e
y
Seward
ary
Bou
nd
Se
aw
ard
Nikolaevsk
a
Ala
sk
Seaward
a
Anchor Point
Homer
Kachemak
Alaska
Co
ok
sk
Ala
Sterling
Inle
t
Bou nda
ry
Se aw
ard
Kenai Fjords
National Park
Resurrection
Bay
H ig
hw
a
Refuge
Ninilchik
Kachemak
Bay
Kachemak Bay
State Park
Gulf
of
Alaska
3D Seismic Survey Areas
mep 01/2001
DE
H?
PT
Coalbed Methane
Potential in Alaska
?
EN T
T
X
MATUR
IN E
ITY?
BAS
PER
MEA
BILIT
Y?
S?
N
O
I
S
EN
NT?
NTE
OIR DIM
V
O
R
E
C
S
RE
GA S
CL E
TE
AT D
CT
EVE
ON
LOP
IC
ME
RE
NT?
GI
ME
?
Bituminous
Subbituminous
Lignite
COAL BASINS and
OCCURRENCES
After Merritt and Hawley, 1986
Alaska contains
nearly 1/2 of the United States coal reserves
or hypothetical resources that exceed
5.5 trillion short tons
Alaska’s Coals
Are mostly Cretaceous and Tertiary in age.
Underlie about 9% of the land.
Consist of 55% bituminous rank,
40% subbituminous, and 5% lignite.
AK CBM-1 Well rig
Shallow Gas Exploration
tns
Conclusions from AK-94CBM-1
Multiple seams encountered.
Shallow reservoir targets.
Increasing gas content with increasing depth.
Excellent desorbed gas contents exceeding
245 cf/ton DAF.
Coals are fractured and cleated.
Alaska’s coals could contain as
much 1,000 TCF of gas
Proposed
- Division of Oil and Gas Studies•Public Consultant Studies
•Address Four Key Issues:
•In-State Demand
•Royalty Gas Valuation
•Prudhoe Bay – Pt. Thomson Reservoirs
•Potential Undiscovered Resources
Alaska’s Onshore Basins
Prudhoe
Bay
Barrow
CHUKCHI
Chukchi
Sea
NPRA
ANWR
COLVILLE
TAPS
MIDDLE
TANANA
YUKON-KANDIK
Fairbanks
Nome
MINCHUMINA
HOLITNA
COPPER
RIVER
Anchorage
Valdez
COOK
INLET
Juneau
Gulf of Alaska
0
500 Miles
Shallow Natural Gas Leasing
Statewide Program
 Allows drilling down to a depth of 3000 ft.
 Excludes areas included in Oil & Gas Leasing Program
 Purpose
-- Provide energy supply to rural areas
-- Encourage exploration in remote areas
-- Supplement declining Cook Inlet reserves
Incentives
 Reduced rents -- 50 cents/acre
 Reduced royalty -- 6.25%
 First-come, first-served
 No bonus bid, $500 application fee only
 Exempt from c-plan
 Exempt from Best Interest Finding
 Reduced financial responsibility requirement
 Exempt from waste discharge permit during drilling
Applications to Date -- 302
 Northwest Arctic - 8 (Red Dog Mine)
 Interior - 100 (Nenana, Fairbanks, Big Delta)
 Railbelt - 194 (Talkeetna to Homer)
jjh 01/01
Shallow Natural Gas Lease Applications
l ill
ve
N. P. R. A.
Arctic National
Wildlife Refuge
Red Dog Mine
Kotzebue
Fort Yukon
T
a
Al
ie
a
sk
Nome
Fairbanks
r
Mc Grath
e
Townships Containing
SNG Applications
Talkeetna
Valdez
Anchorage
Bethel
Kenai
Seward
Dillingham
Homer
Exploration Licensing
Issued -- Copper River Basin





State's first license: Issued October 1, 2000
Anschutz Exploration Corp
318,756 Acres
Exploration commitment: $1.42 million
Term of license: 5 years
Proposed -- Susitna Valley






Forest Oil Corp (Forcenergy Inc.) submitted two proposals
474,240 Acres each, located west of the Susitna River
Exploration commitment for each: $3 million
DNR will determine terms of licenses & final configurations
Preliminary Best Interest Finding (BIF) to be issued in April
Final BIF and Decision to be issued in October
jjh 01/01
In-State Demand Study
DEMAND
Competing Energy Sources
by region (Cook Inlet)
Delivered Price of Gas
in various regions
of the State
Royalty Gas Valuation Study
ANS Oil – Valued by Settlement
ANS Gas – Valued by Lease (“Major Gas Sale”)
Study Will Examine the Netback Price of Gas
 Markets
 Netback Mechanisms
 Value Drivers
Royalty Share: In-Value vs. In-Kind
End