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Alpine oil field producing better than expected

Posted: Sunday, January 14, 2001

ANCHORAGE (AP) -- Phillips Alaska Inc.'s Alpine oil field is performing better than expected, reaching peak production months ahead of schedule.

''The wells are performing,'' said Mark Ireland, Phillips' subsurface development manager for the western North Slope.

Managers expected the 429 million-barrel field to be producing 60,000 barrels a day by the first week of January. Instead the field is producing 80,000 barrels a day, a mark company managers expected to hit months from now.

Ireland credits the strong early production on near perfect drilling during development into the reservoir 7,000 feet below the North Slope.

Alpine is the westernmost oil field on the North Slope. After four years of construction, Alpine began production Nov. 15, about five months behind schedule.

Many consider Alpine a model of oil field development in sensitive environments. The field is the largest onshore U.S. oil discovery in the past 15 years. The reservoir lies beneath the environmentally sensitive Colville Delta and near the village of Nuiqsut. Arco Alaska Inc., which developed the project and did most of the construction before Phillips bought the company in April, engineered two production pads totaling 96 acres to produce oil from a reservoir sprawled across 40,000 acres.

To reach the oil requires drilling wells sideways through a horizon of oil-bearing rock.

Ireland said that drillers hit 99 percent of their targets, better than the 95 percent managers anticipated.

High production early in the life of the field is positive for Phillips, allowing the company to more quickly recover the more than $1 billion it spent to build the field.

Construction is under way on a second drill site, four miles west.

State officials originally expected that Alpine would bring the state about $110 million during the 2001 fiscal year, said Dudley Platt of the state Department of Revenue.

But because the field came on line late, the state will get only $60 million this fiscal year, which ends June 30.

Ireland said that completion of construction at the field was slowed because modules came to the North Slope needing more work than expected.



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