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Shell Files Plans for North Slope Development With an Intent To Sell

Dutch oil major Shell has sought to extend its lease holds on its North Slope oil position in Alaska but said it will not develop the properties itself. The company’s offshore unit applied to form the West Harrison Bay Unit offshore from the National Petroleum Reserve-Alaska with plans for drilling and exploration.

The proposed unit comprises 18 leases in West Harrison Bay, approximately 34 miles northwest of the Colville River Unit. Shell holds 100% working interest in those 18 leases, covering more than 78,000 acres in the proposed unit.

After the filings were reported publicly, Shell told multiple media outlets that it intends to fully divest from the leases and only filed exploration plans to promote interest amongst potential buyers. 

Before Shell announced the plan to sell the assets, the regulatory documents it filed explained that the oil company faced difficulty in finding development partners because of economic uncertainty from the pandemic and the oil-price crash that followed as a result. Subsequently, Shell requested the initial West Harrison Bay exploration plan to be for 5 years to allow enough time to find a partner and improve its plan.

The submitted plans show the proposed wells targeting the Nanushuk oil formation that was first identified by the Repsol-Armstrong Energy partnership in the Pikka Unit. The shallow, conventional formation also forms the basis of ConocoPhillips’ large Willow oil prospect to the south of Harrison Bay and is believed by many in the industry to be prolific across much of the western North Slope.

Shell has been operating in Alaska since the 1950s when it began exploration in the Cook Inlet Basin. It acquired the West Harrison Bay leases in 2012 which expire in 2022, and redirected focus to the leases in 2017, generating five standalone prospects in the Nanushuk and multiple leads in the Torok formation and Jurassic Alpine-like plays.

Map showing Shell's Alaska acreage and the Willow and Pikka accumulations. Source: Shell
 

Other Projects in The Works

Great Bear Petroleum Ventures and Borealis Alaska partnered to form Talitha Unit south of Prudhoe Bay. In the unit application submitted in early September, the companies committed to drilling two vertical wells, Talitha A and B, over the next two exploration seasons.

The Talitha A well, tentatively planned for next winter, would be approximately 8 miles west of the Dalton and be drilled about 10,200 ft to the base of the Kuparuk formation, according to the application.

Hillcorp said in a late July application, it could have production from its Seaview 8 well by 1 October, if all regulatory requirements are met. Hilcorp drilled the 10,000-ft well in 2018, which led to a gas discovery in the Tyonek formation.

The Alaska Journal of Commerce reported the company sought permits for a short gas pipeline within the proposed unit earlier this year to tie the Seaview pad into the Enstar natural gas network.

ConocoPhillips is waiting on a November vote before going forward with any plans.

“Our capital plans will depend on our outlook for prices and the outcome of the ballot measure,” ConocoPhillips told the Alaska Journal of Commerce, referring to the Fair Share Act, an initiative to raise oil taxes in the November election.

 

 

 

Shell Files Plans for North Slope Development With an Intent To Sell

25 September 2020

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