Phillips' Meyers predicts 25 percent boost in North Slope output

Posted: Tuesday, November 28, 2000

ANCHORAGE (AP) -- The president of Alaska's top oil producer says things are looking up on the North Slope. Way up.

Keven Meyers of Phillips Alaska Inc. says the company's oil flow from the slope could rise by more than 25 percent by the end of the decade.

Meyers made the comments in a speech before the Anchorage Chamber of Commerce on Monday.

He said that if all goes according to plan, Phillips' oil production could increase from about 355,000 barrels of oil per day this year to as much as 450,000 barrels by the year 2010.

Under Phillips' estimates, 150,000 barrels or 33 percent of all the production in 2010 would come from unknown oil fields. Phillips is planning at least 12 exploration wells this winter, probing for oil across the North Slope and in the Beaufort Sea.

Meyers described two other components of the Phillips growth plan. One would inject more natural gas into fields like Point McIntyre and Kuparuk. Forcing the specially processed gas into the fields can boost oil flow. The other would be to continue the development of small pockets of crude from satellites around the giant Kuparuk and Prudhoe fields.

Meyers estimates that the long-term plan will mean an annual investment of more than $500 million in Alaska exploration and production.

Phillips is designing an ambitious growth plan.

Oil flow at the North Slope's two biggest fields, Prudhoe Bay and Kuparuk, is falling about 10 percent per year. As the huge fields have aged, Phillips' annual production has fallen by about 20,000 barrels a day. Keeping up oil flow while Prudhoe Bay and Kuparuk are sinking is a daunting prospect.

But Meyers was radiating optimism Monday.

''Exploration does not keep me up at night. We've got a track record that shows we can find oil,'' he said, noting that the Anchorage exploration team has discovered 1.2 billion barrels of oil since 1995.

Other things, however, are leaving him sleepless, Meyers said, namely whether new technology will work to get oil from the giant West Sak field.

The field figures prominently in Phillips' plans, accounting for 17 percent of 2010 production or 75,000 barrels a day. With 16 billion barrels of oil, West Sak is the second-largest oil field in North America.

Yet partly because it lies closer to the surface, West Sak oil is as thick as cold molasses.

This is the Andre the Giant of oil fields -- huge, heavy and slow. Investment in the field has been hobbled by low flow rates from the wells.

To boost production, Phillips plans to direct horizontal wells out from vertical well shafts to draw oil from a long horizon of rocks. The new wells are booming so far, producing about 800 barrels a day compared with 180 barrels before.

The concern is whether water will flood the horizontal well bores, clogging them with sand.

If the technology works, then Phillips plans to sink scores of wells in coming years.

''He's certainly taking the optimistic view of things,'' said Chuck Logsdon, a state petroleum economist, about Meyers' predictions.

But with exploration scheduled in the Beaufort Sea, the National Petroleum Reserve-Alaska and satellites, Logsdon told the Anchorage Daily News that the plans within reach.

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