Huge Offshore Potential Reported in Alaska’s Arctic

By MarEx 2015-06-12 14:40:46

Alaskan crude oil production has been slashed down to nearly a quarter of what it was two decades ago. However, the state’s Arctic offshore regions potentially hold tremendous stores of recoverable crude oil on par with or exceeding other major U.S. regions, according to a new U.S. Energy Information Administration (EIA) report.

The Bureau of Ocean Energy Management estimates that the Chukchi Sea, off the northwest coast of Alaska, contains 2 to 40 billion barrels of unproved technically recoverable crude oil resources. Additionally, the area is estimated to hold between 10 to 210 trillion cubic feet of unproved technically recoverable natural gas resources.

Technically recoverable resources include oil and natural gas that can be produced based on current technology, industry practice, and geologic knowledge. More than half of Alaska’s unproved technically recoverable crude oil resources are in the North Slope Offshore. However, other areas such as the Central North Slope have historically been the most exploited.

The 23.8 billion barrels of potential, recoverable crude oil in the North Slope Offshore is also on par with or exceeds unproved technically recoverable crude oil resources in other oil-rich regions in North America. The Bakken formation in North Dakota comes is estimated at 22.8 billion barrels, and the Eagle Ford formation in Southern Texas is believed to have around half the resources of the North Slope Offshore at 10.3 billion barrels.

Royal Dutch Shell has begun to exploit the potential of the North Slope Offshore by obtaining drilling leases in the Chukchi and Beafort Seas. Just today Shell sent the Arctic Challenger to Dutch Harbor in preparation of exploratory drilling beginning July.The EIA estimates that Shell’s efforts may help to offset future declines in crude oil production from other state and federally managed resources in the region.

Current Alaska oil and natural gas activity is concentrated in three main regions: North Slope Offshore, Central North Slope, and South Alaska.

• The North Slope Offshore encompasses the Chukchi and Beaufort Seas. Except for the Northstar field, which spans both federal and state waters in the Beaufort Sea, most of the production, including the Nikaitchuq field and other smaller producing fields, is located in state waters in the Beaufort Sea.
• The Central North Slope includes the Alpine, Kuparuk River, Milne Point, Prudhoe Bay, and West Sak fields, as well as the National Petroleum Reserve-Alaska (NPR-A) and the Arctic National Wildlife Refuge (ANWR). According to the Bureau of Land Management (BLM), there are 212 oil and natural gas leases in the NPR-A but no producing units. Oil and natural gas exploration and production are not allowed in the ANWR.
• In South Alaska, ongoing oil and natural gas activity is located in the Cook Inlet area