In its first major milestone in developing the Point Thomson gas reservoir, ExxonMobil commenced drilling operations on May 8, after acquiring over 40 necessary permits and spending $50 million on an ice road that is already vanishing in the spring thaw.

ExxonMobil spudded the well on one of two leases the company was allowed to continue to hold under a conditional decision in January by Alaska Natural Resources Commissioner Tom Irwin.

Governor Sarah Palin hailed the commencement of drilling operations at Point Thomson, the first there since wells were drilled in 1983. “We congratulate ExxonMobil on their successful efforts, and commend them for fulfilling their recent commitments to the state,” Palin said.

The Point Thomson reservoir, located 60 miles east of Prudhoe Bay, contains approximately 25 percent of the known gas resources on the North Slope, and will be essential to the success of an Alaska gas pipeline project. In addition, it is believed to hold hundreds of
millions of barrels of oil.

ExxonMobil, as operator, is advancing the project to produce these resources. It will be the highest-pressure gas cycling project in the world, employing world-class drill wells. The first development phase will require more than a $1 billion investment, with start-up planned by year-end 2014. Future development phases will follow after the initial phase.

The field is not only isolated and remote from other North Slope fields, its extremely challenging and abnormally high-pressure reservoir will push the limits of modern drilling technology.

“Point Thomson wells will be among the most complex ever drilled,” said Craig Haymes, ExxonMobil’s Alaska Production Manager. Speaking at an RDC breakfast forum May 21 in Anchorage, Haymes noted reservoir pressures at Point Thomson exceed 10,000
pounds per square inch, over twice as high as Prudhoe Bay.

Haymes pointed out that because of the high pressure and other reservoir characteristics, the first two Point Thomson wells will cost approximately $500 million to drill, including pad construction. The typical well at Prudhoe Bay costs between $5-$8 million.

With half of Point Thomson’s oil and gas resources extending offshore under the Beaufort Sea, the company will employ extendedreach drilling to capture the resource. Drilling will occur from an onshore insulated pad with targets more than two miles offshore and nearly 11,000 feet deep.

ExxonMobil mobilized a specially outfitted and upgraded Nabors rig for the project. The rig, taller than the Statue of Liberty, is among the most powerful landbased rigs in the world. The wells it will drill are among the top five percent in the world in terms of complexity.

Over 250 people were involved in the construction of the ice road and the subsequent hauling of materials over it to Point Thomson. It took two months to build the road along the Beaufort Sea coastline in harsh winter conditions. The heavy rig, as well as millions of pounds of materials, were hauled over the 60-mile road. A rapid and early spring thaw forced the closure of the road four weeks after it opened. The road is literally melting away and will disappear this summer under the Midnight Sun. Therefore, ExxonMobil will need to rebuild it again next winter.

The company also built an FAA-certified airstrip, capable of landing large cargo planes, on the surface of the Beaufort Sea. As with the ice road, the airstrip will also need to be rebuilt next winter.

Since the 1980s, Point Thomson leaseholders have spent over $800 million on the project and plan on spending an additional $1.3 billion to bring the field into development. Current plans call for a phased-development approach that will yield 10,000 barrels per day of liquid condensates in 2014. Gas will be recycled back into the reservoir until a gas pipeline to the Lower 48 states is in operation.

Return to newsletter headlines