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Point Thomson Still on Track for 2014 Production

ExxonMobil Production Co. has mobilized an upgraded drilling rig for the Point Thomson Project on the North Slope of Alaska that can be used in the deep reservoirs using extended-reach drilling technology, it said. The company also confirmed that despite setbacks in 2008, first production from the play is still on track to begin by year-end 2014.

The rig, owned by Nabors Alaska, has been upgraded to drill the high-pressure wells at Point Thomson. It was moved from Deadhorse on the North Slope to the drilling site in modules, some weighing more than one million pounds. Because there are no permanent roads to Point Thomson, Fairweather E&P Services Inc. and Nanuq/AFC constructed more than 30 miles of ice road. Most of the ice road follows the shore line along the Beaufort Sea.

The Alaska Department of Natural Resources (DNR) authorized the ice road permits on Jan. 27. At the same time the agency granted ExxonMobil and its partners permission to begin drilling operations on two of the 31 contested leases (see NGI, Feb. 2). The move was a surprising reversal. In August 2008 the DNR terminated the leases (see NGI, Aug. 11, 2008). At that time Commissioner Tom Irwin called it a "final decision."

"We are moving forward with drilling and development activities at Point Thomson for the mutual benefit of Alaskans and the Point Thomson Unit working interest owners," said Craig Haymes, Alaska production manager for ExxonMobil. "We are on schedule to begin production at Point Thomson by year-end 2014 and look forward to working with the state to resolve the remaining Point Thomson issues to ensure the project schedule is not impacted.

Haymes noted that construction crews recently completed the final installation of camps and support facilities at the existing gravel pad to accept the rig. He added that more than 250 people will work on the drilling operations, with an average of more than 500 people at year-end 2014.

The initial phase of the project will process approximately 200 MMcf/d of Point Thomson natural gas in order to produce approximately 10,000 b/d of liquid condensate into the Trans Alaska Pipeline System by year end 2014. The remaining gas will then be recycled into the Point Thomson reservoir. The Point Thomson Unit working interest owners committed $120 million to the drilling and development activities in 2008, with additional investments of about $250 million expected in 2009.

ExxonMobil has said that its current plan will allow Point Thomson gas to be ready for a gas pipeline project from the North Slope, going as far as to say that Point Thomson gas is essential for a successful gas pipeline project (see NGI, May 26, 2008). The Point Thomson field is estimated to hold 8-9 Tcf of gas and hundreds of millions of barrels of gas condensates and oil.

In addition to ExxonMobil, the other major Point Thomson owners participating in the current drilling and development activity include BP Exploration (Alaska) Inc. and ConocoPhillips Alaska Inc.

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