Tapping the Exploration Potential of Offshore Arctic Alaska

Chandler T. Wilhelm¹, John Shepard¹, Jan Harrell¹, Robert Scheidemann¹, Alec Bray¹, and Thomas Homza^2
1Shell Exploration and Production Company, Houston, TX.
²Shell Exploration and Production Company, Anchorage, AK.

Since 2005 Shell has invested almost $3 billion re-entering offshore arctic Alaska, of which $2.2 billion has been spent acquiring leases in the Beaufort and Chukchi Seas. The remainder has been for three seasons of 3-D seismic and shallow hazards acquisition, environmental studies, and the assembly of an arctic drilling and support fleet.

Shell was an industry leader in the initial phase of offshore arctic drilling in the 1980’s and early 1990’s, participating in 13 prospects in the Beaufort and Chukchi Seas. The initial phase of exploration drilling was based on 2-D seismic, targeted large, obvious structures, and delivered a high technical discovery rate, but without commercial success. Shell left Alaska in the 1990’s and redeployed investment into the emerging deepwater Gulf of Mexico. Shell’s 2005 re-entry followed comprehensive multidisciplinary studies that concluded that the initial exploration phase had established the ingredients necessary for commercially viable fields, but that economic success would require the application of modern technology. This conclusion was based on: 1) the prolific petroleum systems demonstrated by the initial phase of drilling; 2) the presence of abundant large traps, though with multiple unconformity-related elements and complex reservoir distribution; 3) the availability of unappraised discoveries; 4) the availability of spare capacity in the Trans Alaska Pipeline System; and 5) open acreage that could be acquired at lease sales.

The objective of the current campaign is to build on what was proven by the initial phase of exploration and to use modern exploration concepts and technology (e.g. 3-D seismic and 3-D based AVO applications, modern paleogeographic and sediment delivery models) to find commercially viable fields that were missed by the initial phase of exploration. Much of this technology was developed for the deepwater and is adaptable to the arctic. In addition, significant advances in development technology (e.g. extended reach drilling, dynamic reservoir simulation, pipeline flow assurance, and gravity based structures) should enable discoveries to be developed more economically than in the past. Shell is currently moving forward with filing the necessary permits to commence exploratory drilling beginning in 2010.

AAPG Search and Discover Article #90096©2009 AAPG 3-P Arctic Conference and Exhibition, Moscow, Russia