40 Years at Prudhoe

Harnessing a Giant: 40 years at Prudhoe Bay is a special publication from Petroleum News 2 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 3 4 Harnessing a Giant: 40 Years at Prudhoe Bay

Harnessing a Giant CONTENTS Celebrating 40 years at Prudhoe Bay Released October 2008 Alaskans Remember Prudhoe Bay 28 Remembering the unsung heroes The seismic crews and interpreters who crisscrossed 10 Roger Herrera the vast tracts of frozen tundra in the mid-1960s 77 Vic Fischer deserve special recognition 99 Arliss Sturgulewski 105 Gov. Jay Hammond 29 Young geologist changed From the Editor Alaska history Lands selection officer convinced state leaders to 9 Oil field discovery of the century gain control of petroleum-rich North Slope acreage Photo Feature before Prudhoe Bay discovery PETROLEUM NEWS PO Box 231647 65-66 Indelible imagery: 40 years at Prudhoe Bay 33 Lease sales opened doors Anchorage, AK 99523-1647 Phone: (907) 522-9469 to prosperity Fax: (907) 522-9583 Stories Making North Slope acreage available to industry www.petroleumnews.com for oil and gas leasing ushers in exciting new era 11 Oil development spans Petroleum News magazine staff of challenges, opportunities more than 100 years KAY CASHMAN • Publisher & Executive Editor Prudhoe Bay field discovery follows decades of explo- MARY MACK • Chief Financial Officer 38 Richfield, others go elephant hunting ROSE RAGSDALE • Contract editor ration and production by geologists, others, on and Geologists pore over few North Slope outcroppings; ALAN BAILEY • Staff writer off the Arctic Slope California company’s team gets excited about oily SUSAN CRANE • Advertising Director sands in two locations THERESA COLLINS • Marketing Director 14 Navy targeted Arctic reserve in 1920s BONNIE YONKER • Marketing Representative Presidential order establishes expanse of tundra the STEVEN MERRITT • Production Director 42 A geologist finds the right words TOM KEARNEY • Advertising Design size of West Virginia as area designated for petrole- Young co-leader of 1963 summer field party stirs TIM KIKTA • Copy Editor um exploration ambitions of California major to find the elephant CLINT LASLEY • GM & Circulation Director lurking on the North Slope SHANE LASLEY • IT Chief 16 Mangus laid groundwork HEATHER YATES • Bookkeeper DEE CASHMAN • Circulation Representative for oil discovery 43 Prudhoe Bay or bust! Retired geologist was among the few who surveyed Accounts of cat trains, convoys and accidents illus- and mapped the Arctic coastal plain from Barrow to Main cover photo by Gil Mull. trate just how harsh North Slope working Cover design by Steven Merritt the Northwest Territories conditions were in early days Printed by Journal Graphics, Portland, Oregon 21 BP’s long road to Alaska 45 Atlantic brought Mangus back British company prevailed over 10 years of interna- Company invested in North Slope exploration from tional setbacks, obstacles on its way to becoming the Foothills to the Arctic coast, while others scoffed major U.S. oil producer at area’s oil potential Harnessing a Giant: 40 Years at Prudhoe Bay 5

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BMBTLBCQDPN 6 Harnessing a Giant: 40 Years at Prudhoe Bay CONTENTS 46 Oil field discovery saga spawns MVP workers, innovative logistics and historic equipment sealifts Geologists, others say ARCO’s Jamison is individual most responsible for California major’s exploration success on North Slope 81 Engineer recalls Prudhoe Bay early days Oil companies relied on cadre of talented individuals and contractors to 52 Prudhoe Bay discovery: A retrospective design and build unprecedented Arctic infrastructure Richfield and then ARCO district manager takes a playful look back at the way it really happened and what might have been 82 Owners work to unitize Prudhoe Bay State-approved agreement creates participating areas 56 Field discovery debate still rages for oil, gas; divides field Finding the subsurface ocean of oil known as Prudhoe Bay involved two Arctic exploration wells and spanned more than a year 85 Oilfield veteran led construction Prudhoe Bay’s first North Slope coordinator remembers challenges of 61 Hickel had role in Prudhoe Bay’s destiny building field’s petroleum production, processing facilities Former governor had uncanny interactions through two decades that contributed to the oil field’s discovery and development 88 ARCO hires naturalist to study wildlife Early 10-year commission establishes high standards for environmental 63 BP’s trail to Prudhoe Bay protection in Prudhoe Bay, North Slope oil fields

68 Talk far from cheap in early days 90 Producers weigh many marketing options Once laid-back geologists wrestled with ways to keep exploration com- Alternatives for getting Prudhoe Bay oil to market narrowed to choice munications secure during, after Prudhoe Bay field discovery between trans-Alaska and trans-Canada overland pipelines

70 Innovator from the first 92 Pipeline tops for moving oil to market Richfield tackled challenges that it faced exploring for petroleum in Companies organize unprecedented engineering feat to overcome Alaska by using latest technology to get the job done technical challenges of transporting Prudhoe Bay crude to tidewater

72 Oil rush lifts aviation fortunes 95 Fast and furious construction Exploration boom takes off with history-making airlifts to North Slope Prudhoe Bay owners tackle pre-pipeline preparations at record-setting pace; Haul Road completed in less than six months 75 Picture of field emerges Long summer of drilling in 1969 reveals impressive, complex subsurface 96 Pipeline startup brings oil to market geology Producers wade through sea of challenges to build trans-Alaska oil transportation system 79 BP, ARCO prepare to tame an elephant Initial development of the Prudhoe Bay field relies on seasoned 100 Major Prudhoe Bay oil field developments Harnessing a Giant: 40 Years at Prudhoe Bay 7 Special thanks

Editor’s Note: Petroleum News owes a tremendous debt of grati- tude to retired geologist C.G.“Gil” GIL MULL COURTESY Mull who helped make this publication possible. Mull worked alongside other pio- neers of 1960s North Slope exploration and was one of several geologists who actually “sat”on Prudhoe C.G. “Gil” Mull at Drill Stem Bay State No. 1, the discovery well in test No. 5. Photo was taken 1967 and 1968. by Bob Jacobs, Interior Airways For the past 40 years, Mull has dedicated himself to the study of the geology of Northern Alaska, working for several oil companies, the U.S. Geological Survey, the Alaska Division of Oil and Gas and the Alaska Division of Geological and Geophysical Surveys. Described by his colleagues as “a walking encyclopedia” of knowledge of Alaska geology,Mull has made contributions that span three generations and numerous industry plays. A remarkably prolific photographer, Mull has shared his valuable collection of early North Slope photographs with Petroleum News for this publication. Many of the photographs, observations and even articles within these pages are products of Gil’s unflag- ging enthusiasm and dedication to telling the true story of the Prudhoe Bay oil field’s discovery and its development. Thank you, Gil.

101 Mid-life transition for a giant 40 years after discovery the Prudhoe Bay field continues to produce oil while looking forward to future natural gas sales

107 Moving ANS syrup BP’s initial test of producing Ugnu heavy oil at Milne Point succeeds

111 Discovery fuels economic transformation Experts point to Prudhoe Bay oil field as enduring backbone of Alaska’s public, private funding sources and future economy

113 Report: Oil industry crucial in Alaska economy

116 Prudhoe discovery transforms ARCO, BP Giant North Slope field helped shape development of international oil and gas companies

118 What would Alaska look like without oil industry? Economist says 49th state would bear strong resemblance to East Coast state of Maine

119 Field fuels nation Importance of Prudhoe Bay to U.S. oil production cannot be overestimated; field will support future heavy oil, natural gas output

122 A whole different ballgame If 21st century technology had been available in the 1960s, would discovery, development of Prudhoe Bay have been different?

127 Prudhoe Bay’s legacy 8 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 9 Oil field discovery of the century Publication strives to recognize people, events that shaped Prudhoe Bay, making petroleum production in Alaska’s Arctic a reality

orty years ago, Prudhoe Bay, North name even one mem- huge Arctic reservoir, the field still FAmerica’s largest oil field, was discov- ber of the Atlantic accounts for more than 70 percent of ered on the windswept coast of Alaska’s Richfield Co. team that Alaska’s total unrestricted revenues, and North Slope.The field, located some 400 discovered Prudhoe nearly half of the state’s gross state prod- Bay, the largest oil field uct. miles from the nearest city, Fairbanks, in the Western Moreover, Prudhoe Bay’s bounty has brought worldwide attention to the new Hemisphere and a enabled Alaska policymakers to create and thinly populated state, and thrust it major source of U.S. the Alaska Permanent Fund, a one-of-a- into the forefront of United States oil and energy for more than kind mega savings account currently val- gas production. 30 years. ROSE RAGSDALE ued at nearly $40 billion. From this pot of In “Harnessing a Giant: 40 Years at How did the discovery of Prudhoe money, every Alaskan has received a divi- Prudhoe Bay,”Petroleum News has Bay come about? What events led up to dend every year since 1980, averaging sought to direct much-deserved attention this world-changing moment? Who were more than $1,000 each. to people and images of that long ago the key figures in this early period of The Prudhoe Bay field is also the back- era.We hope to share their stories and Alaska’s history? And what stories should bone of a state economy made robust by photographs in commemorating the 40- be immortalized in the saga of the field’s oil and gas investment that is directly year anniversary of the field’s discovery discovery and development? responsible for thousands of high-paying and to highlight the importance of its Prudhoe Bay, estimated to contain as jobs and tens of thousands of support subsequent development and the impli- much as 15 billion barrels of recoverable and service industry positions. cations of that development on Alaska, crude and nearly 26 trillion cubic feet of Looking to the future, the impact of the nation and the world. natural gas, has transformed the petrole- the 1968 discovery will continue to be Intense scrutiny during the past two um industry, including the companies felt by Alaskans and, indeed the nation, generations has centered on construction that found the field and others that prof- for generations to come as industry and operation of the 800-mile trans- ited from its development as well as sub- moves forward with development of Alaska oil pipeline, which transports sequent discovery and development of giant heavy oil accumulations above and hydrocarbons from Prudhoe Bay and other North Slope fields. near the Prudhoe Bay field and the field’s other North Slope fields to an ice-free In Alaska, the importance of the vast quantities of natural gas.A pipeline port in Valdez. But relatively little atten- Prudhoe Bay field cannot be overstated. carrying 4.5 billion cubic feet per day of tion has focused on the dynamic era that Taxes and royalties on the field’s petrole- natural gas to markets in the Lower 48 set the stage for the discovery of the um output have accounted for the lion’s states via Canada and to population cen- Prudhoe Bay field. share of the State of Alaska’s public rev- ters in Southcentral Alaska is on the hori- Indeed, monuments have been erect- enue for decades. Even today, 31 years zon, and some forecasters predict its ed to immortalize builders of the after the startup of the trans-Alaska oil completion by 2020 or sooner. pipeline, and yet most people struggle to pipeline and first production from the —Rose Ragsdale, editor Alaskans remember Prudhoe Bay By Nancy Pounds Most Alaskans don’t remember what Alaska’s economy looked like before the discovery and development of Prudhoe Bay. Only 14 percent of about 670,000 Alaskans today lived in the state in 1968, the year of the Prudhoe Bay discovery, according to Scott Goldsmith, economics professor at the University of Alaska Anchorage’s Institute of Social and Economic Research. So nearly nine out of every 10 residents today know little about Alaska prior to major development on the North Slope, he said. Goldsmith compared 1968 and 2008 in a recent report called, “How North Slope oil has transformed Alaska’s economy.” A few longtime Alaskans, participants and decision-makers during Alaska’s major economic changes, recently recalled events of the era.

Roger Herrera Herrera saw firsthand the changes for Prudhoe Bay.Geologists gathered data BP and Alaska resulting from oil develop- from that area, finding dry holes, even at In the late 1960s, a British Petroleum ment on the North Slope. their best looking above-ground site, geologist Roger Herrera walked the North The Prudhoe Bay find was important Herrera said. It was a big disappointment. Slope foothills and interpreted seismic on many levels, he said. “That’s the reason they didn’t drill data. He had joined the international oil BP’s early North Slope research focused (Prudhoe Bay) first even though they producer in 1960. on the Colville River area, west of were the biggest landowner.They were licking their wounds,”he said. Also, corporate officials were unwilling to spend more money and take high risks in Alaska. In 1968, geologists at Atlantic Richfield uncovered promising

geological data in the PATRICK JUDY Prudhoe Bay area, and ARCO officials proposed a deal for BP’s Prudhoe Bay land, he said. BP then swiftly pursued its own suc- ROGER HERRERA cessful Prudhoe Bay research. The next step to reap the benefit of Prudhoe Bay was construction of the trans-Alaska oil pipeline.“We now had $50 billion in hardware to build,”Herrera said. “Everyone says the pipeline was the biggest construction project at the time,” said Herrera, a retired BP executive who now does consulting work.“But obviously the development of infrastructure at where we go, Prudhoe Bay was equally significant.They .wATTE went hand in hand.” we never forget where we came from. Development on the North Slope proved to be unique, unlike BP’s work in the Middle East, he said.The company had When we began offering passenger service to Prudhoe Bay back in 1981, we had no to confront permafrost, eight-month-long idea that one day we’d be offering twice-daily service. Or converting passenger-only winters and moving huge quantities of oil, he said.“It was a brand new clean slate,” planes into combi jets to accommodate both the people and equipment vital to the see HERRERA page 12 oil industry. But a lot has changed in the more than 75 years we’ve been flying the Alaska skies. And as the industry on the North Slope continues to grow, we’re proud to be there with expanded service and schedules, as well as serve every other part of the great state that’s helped make us who we are today. COURTESY ROGER HERRERA COURTESY

Roger Herrera, a young geologist in the 1960s, fished during a break in a North Slope stream. Harnessing a Giant: 40 Years at Prudhoe Bay 11 Early days on the North Slope C.G. “GIL” MULL

Natural oil seeps near Cape Simpson, southeast of Barrow, visible for centuries, were first visited by Natives who collected the surface crude for heating fuel. The seeps first sparked the interest of western explorers in the early 20th Century. Oil development spans more than 100 years Prudhoe Bay field discovery follows decades of exploration and production by geologists, others, on and off the Arctic Slope

By Rose Ragsdale Kaktovik on Barter Island, within what For Petroleum News today is the Arctic National Wildlife Refuge. Residents of the area traveled to these iscovery of the giant Prudhoe Bay oil seeps to cut out blocks of oil-soaked tun- Dfield in 1968 near the shore of the dra to take back to their homes to use as Beaufort Sea sparked a new era in petrole- fuel.These deposits were generally

um exploration and production in North C.G.COURTESY “GIL” MULL unknown to the outside world until the America and changed Alaska forever. early 1900s. But before geologists narrowed their search to the central North Slope in the Teacher stakes first claim mid-1960s, the Arctic Slope of Alaska,that The first wildcatter to stake a claim on area of coastal plain and foothills north of the North Slope of Alaska was William Van Geologist Ernest de Koven Leffingwell spent the Brooks Mountain Range, had been a seven years surveying the Arctic coastline and Valin, a U.S. Bureau of Education teacher focus of at least modest geological inquiry mapping the geology of the northeastern Brooks from the Arctic village of Wainwright.Van for at least 75 years. Range from 1906 to 1914. Valin had heard stories of an oil lake on Indeed,Alaska oil and gas exploration covery in 1968, Cook Inlet oil production the Arctic coast near Cape Simpson south- dates back more than 100 years to wilder- was nearing its zenith. east of Barrow,so in the summer of 1914 ness locations rimming the Gulf of Alaska, Petroleum development in northern he traveled more than 500 miles to the Cook Inlet and the Alaska Peninsula. Alaska probably began when Inupiat trav- east side of Smith Bay. Discoveries include the Katalla oil field elers along the coast discovered natural oil Van Valin’s claim included seeps about a near Prince William Sound and the town seeps near Cape Simpson, 50 miles south- mile inland from Smith Bay. of Cordova in the late 1800s and the east of Barrow and 150 miles northwest of The U.S. government became aware of Swanson River oil field in the Kenai Prudhoe Bay,and at Angun (Ungoon) the oil seeps when Ernest de Koven National Wildlife Refuge in 1957. In fact, at Point, 30 miles southeast of the village of Leffingwell, a geologist on a privately fund- the time of the Prudhoe Bay oil field dis- ed expedition, spent seven years from 12 Harnessing a Giant: 40 Years at Prudhoe Bay C.G. “GIL” MULL

Sir John Franklin, the English explorer who explored this part of the northern Alaska coastline in 1825 and drew this map named Prudhoe Bay after his friend, Baron Prudhoe.

1906 to 1914 mapping the geology of tatives to examine the seepages at Cape under the mining laws. what is now the Arctic National Wildlife Simpson.They found two flows, but com- In 1923 during President Warren G. Refuge and surveying the Arctic coastline. mercial development did not follow Harding’s administration, large areas sur- Leffingwell reported what he had learned because of more accessible finds in other rounding the seeps at Cape Simpson and from locals and sent samples to Alfred H. parts of the country,particularly in extending south of the crest of the Brooks Brooks, head of the Alaska section of the California. Range were withdrawn from oil and gas or U.S. Geological Survey,who included the “Leffingwell’s final report on the mineral leasing to become the Naval information in a 1909 USGS annual report. Canning River region, published by the Petroleum Reserve No. 4 (now National In this report, Brooks surmised that there USGS in 1919, had even more details about Petroleum Reserve-Alaska) and USGS had might be a petroleum field in northern the seeps at Cape Simpson — which was begun sending expeditions to the area. Alaska, but thought that it would be of no undoubtedly the reason Standard Oil and During this era following World War I, the value owing to the remoteness of the area. General Petroleum sent people to look at Navy had become increasingly aware of its In 1921, Standard Oil Co. of California them,”according to geologist Gil Mull. dependence upon oil to fuel its fleet and and General Petroleum Co. sent represen- By 1921, prospecting permits were filed was concerned about future supplies. ◆

continued from page 10 BP had signed an alliance with Sohio, requiring Sohio HERRERA to fund Prudhoe Bay devel- which caused much nail-bit- opment and earn a progres- ing by BP employees, sive interest in Prudhoe Bay Herrera said. ownership, he said.The cost “It turned out to be of the project almost bank- much more expensive” than rupted Sohio. originally anticipated, he “BP escaped that because said. of the side deal with Sohio,” Landownership issues he said. caused delays from 1969 to The Prudhoe Bay find 1975 and escalated costs, he added significantly to BP’s said. world oil reserves.“Prudhoe “BP was radically affect- reserves filled that void in ed.The cost of it was going world oil reserves. It was a to be gigantic,”Herrera said. lifesaver for them.” ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 13 C.G. “GIL” MULL

USGS geologists began exploring northern Alaska in the early 1900s; this map shows the route of expeditions in NPR-4 between 1901 and 1926. 14 Harnessing a Giant: 40 Years at Prudhoe Bay C.G. “GIL” MULL

Natural oil seeps like this one at Cape Simpson stirred the interest of the U.S. Navy in the 1920s when potential oil reserves became vital to national security. Navy targeted Arctic reserve in 1920s Presidential order establishes expanse of tundra the size of West Virginia as area designated for petroleum exploration

By Rose Ragsdale For Petroleum News

y executive order, President Warren B G. Harding created the Naval C.G. “GIL” MULL Petroleum Reserve No. 4 (now National Petroleum Reserve-Alaska), in 1923, setting aside nearly 24 million acres, or about 38,000 square miles of the Arctic Slope of Alaska for future petroleum needs of the U.S. government. NPR-4 amounted to about half the area of the entire Arctic Slope north of the Brooks Range, which was now off-limits to Umiat, the first oil field discovered on the North Slope by the U.S. commercial production.The reserve government, became a staging area for early geology field parties when the oil industry began exploring the region in the mid-1960s. included Cape Simpson and extended to the Colville River on the east and south to the crest of the Brooks Range. For a peri- (See attached map.) major exploration program that lasted od of four years following the establish- Test drilling and other exploratory nearly a decade. ment of NPR-4, the U.S. Geological Survey work by the U.S. Navy and the U.S. Marvin Mangus, a USGS geologist who sent a series of geological field parties to Geological Survey during the next 30 worked on the North Slope for nine field explore the area and begin initial explo- years, though not extensive, produced no seasons from 1947 to 1958 and later for ration of the new petroleum reserve. commercially significant discoveries. Atlantic Refining Co. and then Atlantic These field parties were headed by some In 1943 during World War II, the entire Richfield Co., said USGS mounted expedi- famous names in the USGS — John North Slope was withdrawn from public tion after expedition to explore the area. Mertie, Jim Gilluly,and P.S. Smith, who entry under Public Land Order 82, and the “I first went up there in 1947. … We later became the director of the USGS. Navy,again with the USGS, initiated a made maps; we set up all the geological Harnessing a Giant: 40 Years at Prudhoe Bay 15 nomenclature and the geologic history of 7,500 offers it received to lease the 4 mil- result, Richfield acquired more land than the North Slope.The Navy in 1923 set lion acres in the offering.This was the any other company. aside that petroleum reserve … because it first sizable area to become available In 1976 Congress placed NPR-4 under looked excellent for petroleum produc- from lands withdrawn 15 years earlier the management of the U.S. Department tion.At that time, the U.S. Navy drilled during World War II. of the Interior and renamed it the about 23 holes looking for oil. During the summer of 1958, Sinclair National Petroleum Reserve-Alaska, or “Unfortunately, we did not do too Oil Corp. began surface geologic work on NPR-A, in the Naval Petroleum Reserves well.We found a field at Umiat; that field the North Slope with a field party based Production Act. had estimated reserves of about 30 mil- at Umiat for the three-month season. During 1975 and 1976, the federal lion to 100 million barrels of oil.At the British Petroleum, interested in reduc- government still demonstrated its ongo- time, a 6-inch pipeline from Umiat to ing its dependence on the Middle East, ing interest in exploring the North Slope Fairbanks would have cost $2 million, so formed a partnership with Sinclair Oil with an extensive program of seismic it was not considered commercial by any and Gas Co. to explore the North Slope surveys and exploration. Five or six wild- means.What (the Navy) needed was one of Alaska. cat wells were drilled in the Foothills well to produce 3,000 barrels a day to province of the North Slope and one at make it commercial on the North Slope. Ongoing interest evident Cape Halkett in NPR-4 by the U.S. Navy. “Some 50 years ago, it was so far dif- In December 1960, the federal govern- All of these tests were dry holes, but ferent than how we do things today, so ment established the Arctic National they did have some significant shows of that it’s hard to compare,”Mangus Wildlife Range covering nearly 19 million gas, with minor oil shows and provided a observed. acres from the Canning River east to the large amount of additional data on the Between 1945 and 1952, the govern- Canadian border and including the geology of NPR-4.Areas believed to con- ment conducted 45 shallow core tests Brooks Range on the south to the tain multiple oil and/or gas reservoirs on and drilled 36 test wells within and Beaufort Sea on the north. the continental shelf northeast of the immediately adjacent to NPR-4.The The creation of the wildlife range and Point Barrow-Cape Simpson; in the results included one oil field, Umiat, and the continued existence of NPR-4 limited Beaufort Sea, from Prudhoe Bay to the two small gas fields, Gubik and Barrow; industry entry to just the acreage lying Canadian border; and the coastal plain three prospective gas fields, Meade, between the Colville and Canning rivers. area north of the Sadlerochit and Square Lake and Wolf Creek; and two In a 1964 simultaneous filing, Richfield Romanzof Mountains to the Arctic Ocean minor oil deposits near Cape Simpson Oil Co. acquired a large number of leases within the Arctic National Wildlife Range and at Fish Creek. and bought leases from others.As a (changed to Refuge in 1980.) ◆ Uncle Sam departs By 1953, the federal government effectively ended 30 years of exploration activity in NPR-4 having spent an estimated $50 million to $60 million in an unsuccessful effort to find worthwhile petroleum resources. “Being that there were no big finds found in the oil wells there, they shut it down (in 1953),”Mangus recalled.“They ran out of money; and Congress wouldn’t appropriate any more.” After the close of the NPR-4 program in 1953, the USGS continued mapping the geology and studying the stratigraphy of the Brooks Range and adjacent areas as part of its long-range objectives. In 1958, the federal government opened parts of the North Slope outside NPR-4 to simultaneous filing of oil and gas leasing, and several major oil companies began conducting extensive geophysical and geologic studies throughout northern Alaska. This development would turn out to be more than important for the future of the oil companies, according to geologist Gil Mull. That September, after a 60-day simultaneous filing period, the Bureau of Land Management held a drawing from the 16 Harnessing a Giant: 40 Years at Prudhoe Bay Mangus laid groundwork for oil discovery Retired geologist was among the few who surveyed and mapped the Arctic coastal plain from Barrow to the Northwest Territories

By Rose Ragsdale For Petroleum News Geologist Marvin Mangus, working for Atlantic Richfield Co., looks at geological features in the central Sadlerochit Mountains in the arvin Mangus first came to Alaska’s Arctic National Wildlife Refuge with Howard Sonneman and Don

Bebout of Humble Oil Co (now Exxon Mobil) in July 1966. C.G. “GIL” MULL M North Slope in 1947 with the U.S. Geological Survey and spent nine field seasons mapping the geology of the area, from the Brooks Range to the Arctic Ocean and from the U.S. border with Canada in the east to Cape Simpson near Barrow in the west. Mangus, who grew up in Western Pennsylvania, earned bachelor’s and mas- ters degrees in geology from Pennsylvania State University, before pursuing a career in petroleum geology. “I’d always wanted to do field work in Alaska, so I put in my resume with the Survey in 1946 and was hired in 1947 to put in the Navy oil MARVIN MANGUS unit,”Mangus recalled in a recent interview. ing and Congress wouldn’t appropriate northern Canada. During this period, longtime USGS any more funds for the work. “I did surface work in the northern Yukon Territory and Northwest geologist George Gryc led one of the A new era of exploration first field parties for the Survey on the Territories and found some big structures North Slope, then known as the Arctic In 1958, the industry took over where some 180 miles east of Umiat in what coastal plain, Mangus said. the government left off. today is (the Arctic National Wildlife “We knew the area had one of the Before then, companies were not Refuge),”he recalled. largest and thickest suites of Cretaceous allowed to prospect north of the Brooks “We mapped all the way from Banks rocks, comparable to the Rocky Range for hydrocarbons and minerals Island, Northwest Territories to Cape Mountains foothills,”Mangus said. because it was set aside for the govern- Lisburne and Point Lay.That’s 1,200 Mangus said the Navy had built and ment in case of emergency, by Public miles.We would move camp by boat.We maintained a small camp with a full-time Order No. 41. usually had two geologists, two field cook at Umiat in the reserve.Ten to 50 The federal government rescinded assistants and a cook. I wore out my USGS geologists did field surveying each that order in 1957 and 1958, and private knees scrambling around over the rocks,” season, depending on annual congres- industry moved in and started prospect- Mangus recalled. sional appropriation. ing for oil. “It all tied in very nicely.The area had “We went into the Brooks Range By then, Mangus had left the USGS the same outcroppings, and same age because when we got out to Umiat, we and gone to work for Philadelphia, Pa.- rocks as the Richardson Mountains and started losing the outcrops.They had to based Atlantic Refining Co. in Central Mackenzie Mountains.At Norman Wells, use seismic north of there,”he said. America. He spent two years doing field NWT,we found unconformities and Disappointed by the lack of big oil dis- work in Guatemala, before Atlantic trans- structural traps. Now they are doing coveries, the federal government backed ferred him to Calgary,Alberta in 1960. quite well with gas fields up at Inuvik, away from Arctic exploration in 1953, Mangus then spent two field seasons NWT,”he said. shutting down the USGS exploration pro- mapping the Richardson and Western “If you thought the North Slope was gram when the agency ran out of fund- Mackenzie and Franklin mountains in sparsely populated, you should have Harnessing a Giant: 40 Years at Prudhoe Bay 17 gone to the Northwest a lot of pertinent ideas,”he Territories back then,”he warned. added. Mangus said everyone In 1962, Mangus returned whom he worked with both

to Alaska as regional senior at the USGS and in the oil ROSE RAGSDALE surface geologist in charge of industry were good geologists the Arctic Slope of Alaska. His and hard workers. But a lot of mission: to conduct Atlantic them didn’t come back after Refining’s geological field pro- working one summer on the gram. North Slope because of the “We started mapping the harsh living conditions, espe- North Slope from Umiat to cially for the USGS, he said. the Canning River, which was “We never lost anyone in the western boundary of that rough country because ANWR.We did the geologic you had to be very careful,” mapping in there.We com- Mangus recalled. Marvin Mangus, an accomplished and celebrated artist, painted this piled the maps, and then we Though he did not use a memorable scene from a photograph of geology pioneer Alfred H. came up with some recom- helicopter to do field work Brooks, for whom the Brooks Range was named, and a colleague, as mendations for drilling wells, until 1960, Mangus said he they surveyed the Alaska Range in the early 20th Century. but we had to wait for the definitely recommends their geologic seismic maps to use because of all the walking come out because there were he had to do in Alaska and in no outcroppings in the north- Central America. ern part of the coastal plain. “You can’t land helicopters We tied those maps together, in a lot of places. But another which took a couple more good thing about helicopters years.Then in 1964, we if you saw something late in worked the Brooks Range the season, and you remem- from Umiat to Feniak Lake. ber it four or five weeks later, “Everything was confiden- you can go back and look, but tial.We didn’t trade maps if you’re walking, or floating unless we were partners with in boats, you sure as hell can’t a company. Even then there go back,”he said.“You also was some secrecy,”he said. can re-fly areas you’ve already worked.You can go back and Helicopters check.You can’t do that when changed the game you’re walking.” During the 1950s and Still, helicopters came with 1960s, helicopters trans- their own set of difficulties formed geological field work because landing areas on the in the Arctic, providing a North Slope are very nebu- mode of transportation that lous, said Mangus, who was made surveying and mapping involved in five helicopter a far more efficient process. crashes in the latter part of “In the Navy oil days, we his career. walked and we moved camp The geologist’s wife, Jane by boat.There is no compari- Mangus, recalled a night in The art of the 1960s when her hus- son to doing field work by transportation Carlile has been solving complex band’s colleague, John Sweet, boat,”Mangus said. transportation challenges for more “Helicopters are a much came to her house and want- than 27 years. Like creating a work better way of getting around ed to pray because Marvin’s of art, it takes ingenuity, expertise to look at the rocks in the helicopter had gone down. and the right equipment to deliver field as long as you take “Nobody was in it, and that seamless service from point A to point notice.To really look at rocks, made me feel like he might B, every time. No matter what it is or it is better to walk for a few be alright,”she said.“Marvin where it’s going, Carlile Delivers. years.” built an enormous bonfire That’s especially true for and a commercial airplane young geologists fresh out of saw it. So he was rescued.” school, he said.“Don’t come Industry brought right out of college and go only to the helicopters resources to field work www.carlile.biz l 1.800.478.1853 because you over fly and miss Working for industry ROAD - RAIL - SEA - AIR ALASKA I HAWAII I UNITED STATES I CANADA 18 Harnessing a Giant: 40 Years at Prudhoe Bay offered other advantages, too. “We had no supplies.With Geologist Marvin Mangus, who spent industry, we had a lot of nine field seasons studying the geology of northern Alaska, pauses at things we didn’t have with

Monument No. 1 on the U.S.-Canada C.G. “GIL” MULL the USGS such as communica- Boundary at the Arctic Ocean while tions.We also had better exploring the North Slope for Atlantic tents, and we could carry a Richfield Co. in July 1966. lot more field gear. If you go in and do a good job of reconnaissance, then you can go in and take a better look next year.With the helicopters, you can work the inner stream areas, while you were limited to within 15 miles of the river with the boats.Walking more than 30 miles in that country was something else.Walking was just tougher than hell,” Mangus recalled. However, the North Slope’s barren landscape allows one to see long distances.Thus, outcrops were better exposed, and not hidden by vegetation, he said. When Atlantic Refining and Richfield Oil Co. merged Atlantic Richfield Co. He since Richfield had partnered because it was a sub-surface in early 1966, Mangus became shared an office with Humble with ExxonMobil’s predeces- clay.We took it to manage- senior field geologist for Oil Co.’s geologist Gil Mull sor company. ment, and they said go ahead. The newly combined “We were all in favor of ARCO had to take over the drilling it — Charlie Selman, drilling operation and carry head of geophysics; Rudy out all of Richfield’s commit- Berlin, Gil Mull, John Sweet ments. So ARCO drilled the and Harry Jamison,”he Susie No. 1 well. recalled.“When we put it all “We went down about together, from geophysics to 14,000 feet and it was dry,” geology, Prudhoe Bay State Mangus recalled.“By that No. 1 was our discovery.We time, government regulations discovered it using geologic came along and we had too field work and seismic work.” much acreage and had to release some of it.” “X” marks the spot A convergence of ideas In August 1966, Mangus ensued involving joint field- was chosen to travel to the work and mapping parties North Slope and actually with Humble Oil, he said. mark the surface location Up until that time, industry where Prudhoe Bay State Well had spent $250 million and No. 1 would be drilled. come up with nothing but “We put a 10-foot iron rod, dry holes, Mangus said. painted international red, “We consolidated maps where the well was to be between the three organiza- drilled. It was a joint effort to tions and came up with the pick that location; I was just big structure.We figured one asked to mark it. I was the more hole after Susie. senior man, and they asked Prudhoe Bay State No. 1 me. would probably have been “When we finally hit oil the last hole if we hadn’t there, well, we were real found oil.We figured this would be a good place see page 20 Harnessing a Giant: 40 Years at Prudhoe Bay 19

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excited because we knew it was really big,”Mangus said.“We had to stop drilling in the spring of 1967 and that fall we went back. In December, we hit the oil but they did not call the official discovery date until February or March of 1968.You didn’t want everyone to know.We didn’t finish Prudhoe No. 1 until about June 1968.” The confirmation well also was drilled in June 1968. “We used a different drill rig at Sag River State than at Prudhoe Bay.We used a Nabors Drilling rig for Sag River,” Mangus recalled.“When we hit that, we couldn’t believe it. It was just loaded with oil.That’s the one that was estimated at (9 billion barrels). Sag River had no gas cap. It was all oil, and oil was worth a lot more than gas. “We were just elated.We couldn’t believe it.When you find the biggest oil reserve in North America, you are happy. Everyone gets into the act. Finding that was like finding a $100 gold piece in your Christmas stocking instead of a lump of coal,”he added.

Geologist captures ROSE RAGSDALE Pioneering geologist Marvin Mangus painted the Prudhoe Bay State No. beauty of the Arctic 1 well in 1968, while “sitting” on the well during drilling. Mangus, an accomplished and celebrated artist, captured many images of the dra- civil construction remediation barge services matic Arctic landscape on canvas during his years of field work in the far North. One memorable painting depicts the Loffland Bros. rig that drilled the Prudhoe Bay State No. 1 discovery well. Mangus painted it while sitting on the well as the For over well site geologist for ARCO. “Every night I’d go out and look at the samples and gawk at the Northern Lights and come back inside and slap on a few years, more brush strokes,”he recalled. 40 After the Prudhoe Bay field was discovered, Mangus stayed on with ARCO until 1969 when he formed a consulting firm we’ve been with two geologists from Phillips Petroleum, he said. “After I left ARCO, we tried to get a building couple of the oil companies to pursue drilling at Alpine but had no luck,”he said. Mangus said his last mapping job for Alaska. ARCO was a detailed study of the Sadlerochit Formation. In addition to Prudhoe Bay, Mangus basalt quarry arctic construction Prudhoe Operations played a significant role in Pan American’s Fairbanks Office: P.O. Box 70668 • Fairbanks, AK 99707 Kavik gas discovery and mapped the Phone: 907.452.2512 • Fax: 907.452.5018 Alaska Peninsula from Port Moller to Anchorage Office: 1577 C Street, Suite 106 • Anchorage, AK 99501 Kamishak Bay, the Talkeetna Mountains Phone: 907.277.2002 • Fax: 907.277.2003 and the Kandik and Copper River Prudhoe Operations: Phone: 907.659.2330 • Fax: 907.659.2329 basins. ◆ www.bricecompanies.com Harnessing a Giant: 40 Years at Prudhoe Bay 21 BP’s long road to Alaska British company prevailed over 10 years of international setbacks, obstacles on its way to becoming major U.S. oil producer

Petroleum News British Petroleum brought years of experience s one of the seven major interna- developing oil fields in the Middle East to Alaska A tional oil companies, BP’s strength when it began exploring the North Slope in the early 1960s. Here, tents of a geology field camp had always been in the Middle East. Its ROGER HERRERA dot the Arctic tundra in summer. vast reserves of oil in Iran, Kuwait and Iraq were greater than those of any other single company, over a fifth of the total reserves of the whole world in fact. This was strength but also a weakness, for while the other big companies were developing their marketing outlets throughout the world BP was content to rely mainly on its profitable oil production, selling any crude oil that it could not market itself to other companies who had the markets but not the production.As far back as the mid-1930s, BP had thought about entering the United States, the world’s most lucrative oil market.Then after World War II, when BP decided it really did want to go into America, the big problem was Britain’s Smooth.

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exxonmobil.com Harnessing a Giant: 40 Years at Prudhoe Bay 23 adverse balance of payments and the corresponding shortage of dollars. It would have been an immensely costly investment either to buy up existing ROGER HERRERA companies or to start from scratch with all the production and refining and marketing operations required.And BP was doing very well as the biggest producer of Middle East crude oil and possessor of the lion’s share of its reserves. In 1951, Iran suddenly nationalized her entire oil industry and BP was com- pelled to withdraw 50 years after first entering the country. It was the first major act in the tide of nationalism that was beginning to sweep across nations previously dominated by foreign industries. The Iranians were unable technically to run such a complex industry, and during the ensuing legal battle, an embargo was placed on any country accepting Iranian oil. In 1954, BP returned to Iran Vital supplies like aircraft fuel, heating oil and diesel were stockpiled in barrels at various North Slope to operate as the major partner in a con- sites once exploration got under way in the mid-1960s. Companies barged in or flew in such supplies at the beginning of the season and meted them out to support the work of geological field parties. sortium of American and European oil companies. But it had been a traumatic shock, jogging the company’s manage- for BP’s entry into the United States.The Kenai Peninsula south of Anchorage in ment out of its rather complacent atti- Suez Canal crisis of 1956 convinced BP’s 1957.The U.S. Navy also had published tude toward marketing and proving the board of directors that the company the results of its oil exploration on the need to develop oil production in other needed a substantial presence in North North Slope. parts of the world. America’s profitable and stable oil indus- Sinclair suggested the possibility of Some observers said it was the best try. looking for oil in Alaska, specifically the thing that ever happened to BP,resulting But the cost of entering the U.S. mar- Cook Inlet Basin where many American in determined expansion in place of a ket directly was higher than ever.The oil companies had focused exploration. tendency toward self-satisfied stagnation. British government owned 56 percent of But BP,recalling its world survey in BP at that time. 1952, was more interested in the North World survey identifies Alaska The answer seemed to be to find a Slope, where there was a better chance company which was already marketing of finding a large field. Within weeks of being forced out of in the United States, but which was During a plane trip, BP geologist Peter Iran, a group of BP geologists, led by short of crude oil, and come to a joint Cox flew over the North Slope and went Alwyne Thomas, C.A. O’Brien, Frank agreement whereby BP would supply it home impressed.“There is a similarity Slinger and Harry Warman, got together with oil. BP developed such a relation- between the foothills of the Brooks to prepare a world survey of oil ship with Sinclair Oil Corp. But the BP- range and the Zagros mountains in Iran,” prospects, based on their knowledge of Sinclair agreement was frustrated from he told colleagues. the sedimentary basins in various the outset. Shortly after the companies The North Slope, in fact, got its name regions.These were graded according to joined forces, the U.S. government, from the way the foothills sloped gently the likelihood of oil being present. alarmed by the threat of low-cost foreign toward the Arctic Ocean. It was similar When the survey was completed in oil flooding the market, imposed at the in many geological respects to the early 1952,Alaska was near the top of beginning of 1959 rigid controls on deserts of the Middle East — except for the list.The north of Alaska was included crude oil imports. Only those companies the difference of about 150 degrees of because of the oil and gas discoveries with domestic production could import temperature — and the annual 4 inches made there by the U.S. Geological foreign oil.This rule effectively excluded average of precipitation on the North Survey in the 1920s and during and after BP. Slope was even less than in most World War II. But the harsh arctic condi- Unable to market Middle Eastern oil deserts. tions as well as a shortage of exploration in the United States, BP and Sinclair Cox also reportedly told BP executive funding pushed Alaska to the bottom of turned to the other part of their joint Robert Belgrave that the North Slope the list.The closest BP got to the area operation, which was to explore for new was one of the few places in the world was in 1953 when the company took domestic sources of oil. where there might be a chance of find- over Canada’s Triad oil company, operating a Kuwait-sized oil field. ing in Alberta. Geologists see similarities to Iran Shortly afterward, Cox became a man- It was another political leader in the aging director at BP and in February Middle East, the late President Nasser of By this time, Richfield Oil had made 1959, it was he who accepted the rec- Egypt, who provided the final impetus its discovery at Swanson River on the 24 Harnessing a Giant: 40 Years at Prudhoe Bay ommendation of a report to London in So, BP hired a retired Pan American Oil sleeping bags all day. Because of the which BP geologists wrote: “The areas executive to apply for leases in its name weather, flying in the mountains was of sedimentary basins are very large.That at the land office in Fairbanks.The 70 very tricky. Fog and low clouds could of the Arctic Slope measures 105,000 separate forms, all in quintuplicate, were suddenly seal off a whole valley. square miles, larger than our entire typed confidentially in a local bank.They Everyone had to carry emergency rations Iranian concession. … It contains a were filed April 1, 1959. and the orders were to stay put if you wealth of drillable anticlines on the The first step for BP and Sinclair was were cut off until you could be rescued. Iranian scale with lengths of the order of to conduct geological surveys on the Shortage of water was a problem, 20 miles. … Overall, prospects are of a North Slope. strangely enough. People could become high order. …” In 1959, BP opened its first office in badly dehydrated if left out in the moun- But the tide of industry opinion was Alaska in downtown Anchorage and a tains with no rations. against the move. BP geologist Frank year later, the company’s first team of “It could get pretty rough, especially Rickwood, who later became head of BP geologists arrived. in the mountains.There we’d sit, our Alaska in New York, recalled that he was Geoff Larmanie, a BP geologist who heads in the sky, our backsides in the always embarrassed when American became the company’s area manager in snow for days on end. Living cheek by companies said to him,“What in God’s Alaska, recalled those early days in Alaska jowl with people under these cramped name are you doing in that wilderness?” – The Last Frontier, published in 1972. conditions could result in certain psy- “I remember when the North Slope “We started work in 1959 in the chological tribulations, when we might first came up, I had to send a girl down Richardson Mountains and went to the all run out of both work and reading to find a map of Alaska to see where the North Slope the following year. By 1966, matter. bloody place was,”he told author Bryan we had covered it back to the Brooks “Usually the camp would wake up Cooper in the early 1970s. Range.The geological work had to be about six o’clock. Someone would make done in summer because you’ve got to breakfast, then the first helicopter would The hunt begins let the snow melt so that you can see be away with the first team — we nor- Being the only company interested in the rocks.We gradually worked north- mally worked in parties of two. It would the North Slope turned out to be a big wards as the snow melted, setting up come back for the second team, and so help to BP,enabling the company to pick camp alongside lakes so that our float on, until we were all out scouting the up oil and gas leases cheaply in the planes could land.The weather was terri- hills and valleys.” foothills of the Brooks Range near the U.S. ble sometimes.There were days when Roger Herrera, now retired from BP, Navy’s discoveries at Umiat and Gubik. we were stuck in our tents, unable to fly, was a member of the company’s first Secrecy was critical to the maneuver. and had to keep warm by staying in our team of geologists in Alaska. At 78° N, Safety comes first

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“There were very few maps available in 1960 for those parts of Alaska,” A Sinclair Oil & Gas Corp. geologist takes a stroll in the snow Herrera said.“Those that were available near the Shale Wall rig where Sinclair and BP drilled an explo- were of poor quality so we relied heavily ration well in the mid-1960s. The companies drilled at least half

a dozen dry holes together before Sinclair lost interest and later ROGER HERRERA on aerial photographs.” was acquired by Atlantic Richfield Co. BP went on to become a Herrera said their assignment was to major owner and operator of the Prudhoe Bay oil field. define the geologic structures more exactly and to identify more promising reservoir rocks and develop a picture of the regional, geologic trends.They lived in tents, moving by float plane from site to site and landing in the numerous small lakes that dot the Slope Sometimes they would travel by helicopter. “We’d go out in the morning to get rock samples, and since we had many miles to go, we only carried essentials — a map, compass, rock hammer, good hik- ing boots, plenty of mosquito repellent and, in the event of bad weather, patience,”Herrera said.“I recall many nights spent out on the tundra because the weather was too poor for pilots to fly.”

California production here that the Kern Oil properties in pumped at a rate of five to 10 barrels finances exploration California that BP acquired in 1957 from per day each. For each group of about The costly Alaska exploration program Rio Tinto proved particularly valuable. six wells, a steam engine drove a huge was draining BP’s already lean financial These wells, discovered and devel- flat wheel from which wire cables were resources, both in terms of cash flow oped in the 1920s, did not flow under attached to individual wells.As the and Britain’s balance of payments. It was their own pressure and had to be wheel turned, the wires would jerk the Business In Stock

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907-659-2550 I 907-659-2650 fax I colvilleinc.com/brooks.html 26 Harnessing a Giant: 40 Years at Prudhoe Bay pump at each well in succession and a tion surveys in permafrost.With Slope then barged it down the Hay River into glug of oil would emerge and trickle into permafrost thickness at some 2,000 the Mackenzie River, to the Beaufort Sea a gutter dug in the ground.The oil was feet, it was feared the readings would coast, west to the Colville River and thick, almost solid, but was particularly be severely distorted. New methods of finally upriver. useful in California for making asphalt, interpreting seismic logs would prove With Canadian crews, BP drilled six selling at a profit of about a dollar a bar- beneficial in BP’s early exploration wells fairly quickly under difficult and rel. Production had declined to almost efforts. unfamiliar conditions. In addition to the zero and BP was seriously considering BP management in London accepted thick permafrost, the mercury dipped disposing of the properties. the team’s recommendations to pro- so low that steel equipment fractured Then Tidewater Oil Co., which also ceed with exploration drilling. By the and normal lubricants solidified. owned leases in the Kern River field, end of 1963, BP and Sinclair had BP geologists had made a mistake became interested in the possibilities of acquired options to lease about 150,000 about the foothill folds north of the secondary recovery, which could greatly acres. Brooks Range.They looked promising, Though BP was the first company to increase production.Tidewater negotiat- but did not go down to any depth.As a extensively explore the North Slope, ed an agreement with BP and took over result, the company’s drilling in the Colorado Oil and Gas was the first to operation of the field, paying BP a share foothills of the Brooks Range and the actually drill a well.The independent of the profits. Enhanced recovery result- Colville River delta proved to be unpro- spudded a shallow well in July 1963 ed in production increasing to the point one mile from the Gubik gas field, using ductive — to the tune of $30 million where BP received $2 million to $3 mil- a small rig left behind by the U.S. Navy and nine dry holes. Dreams of an lion a year. It was this money that when it completed its exploration pro- Eldorado in this northern frontier enabled the company to finance Alaska gram in 1953.The well was only drilled quickly faded. exploration, a program that cost $3 mil- to 2,000 feet and the company aban- “It’s remarkable how little notice lion a year out of BP’s total worldwide doned it as a dry hole and showed no people take of you when you’re drilling wildcat exploration budget of $10 mil- further interest in the North Slope. dry holes,”said Mike Savage, a senior BP lion. Since the area was isolated from the executive at a 1987 ceremony in rest of the world, transporting drilling Anchorage that commemorated the Early drilling proves fruitless equipment there was a major logistical 10th year of Prudhoe Bay oil produc- When BP began seismic work on the challenge. BP brought its first drilling tion.“The odds of success in an entire North Slope in 1963, geophysicists had rig by rail from Calgary,Alberta to the new exploration area were at least 20 little or no experience in seismic reflec- Hay River in the Northwest Territories, to 1 against.” ◆

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28 Harnessing a Giant: 40 Years at Prudhoe Bay Remembering the unsung heroes The seismic crews and interpreters who crisscrossed the vast tracts of frozen tundra in the mid-1960s deserve special recognition

By C.G “Gil” Mull Eskimos who had long known of their pres- For Petroleum News ence. However, subsequent exploration programs by the Navy and the oil industry eismic crews who collected critical sub- began with surface geological mapping and C.G. “GIL” MULL S surface data and the specialists who then quickly continued with acquisition of interpreted this information are the unsung geophysical data. heroes who led to the discovery of the After the federal government released giant Prudhoe Bay oil field and most of the the first North Slope lands to exploration in subsequent discoveries on the North Slope. 1958, many companies, including British Only in the Brooks Range foothills belt are Petroleum, Sinclair Oil & Gas, and Richfield outcrops continuous enough that anticlines Oil, sent surface parties north to evaluate A seismic shot hole drill operates on the tundra and major faults can be mapped solely on during seismic surveys on the North Slope in the the lands. BP and Sinclair, in partnership, the basis of surface data, but even there, early 1960s. mobilized a United Geophysical Co. seismic seismic data is needed to resolve structural United States Geological Survey and Navy crew in 1962, and then drilled several rela- and some stratigraphic details in the subsur- geologists who mapped the structure on tively shallow wells on foothills anticlines. face. The small Umiat oil field, which was foot.They mapped the area after hearing of The 1963 Richfield surface field party discovered by the U.S. Navy in the mid- the small oil seeps at the base of Umiat also realized that seismic data would be needed to explore the lands beneath the 1940s in the southeast corner of NPR-4, was Mountain from the nomadic Nunamiut found on the basis of surface mapping by coastal plain north of the foothills outcrop belt, and this resulted in Richfield’s first seismic crew in the winter of 1963-64. This crew from United Geophysical was supervised by Charlie Selman, Richfield’s district geophysicist in Anchorage, and shot three north-south reconnaissance lines from the foothills north onto the coastal plain. In addition to the crews from United Geophysical, other oil companies, including Atlantic Refining, also had seismic crews from National Geophysical Co. and Western Geophysical Co. operating in the winter of 1963-64. In the spring of 1964, Richfield added a second seismic crew,contracted from Western Geophysical. Yet a third crew,from United Geophysical, was mobilized in the winter of 1964-65 to provide coverage to the north on lands to be selected by the State of Alaska following a partnership agreement with Humble Oil in the fall of1964. This crew shot the first lines across the Prudhoe Bay structure for Richfield-Humble, although other companies also saw the feature in their seismic data. Map interpretations of the structure by geophysicists Paul Bolheimer, Rudy Berlin, and Pete Clara led to the final interpretation that was used for the 1965 state sale in which Richfield-Humble acquired its leases across the top of the Prudhoe Bay structure. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 29 Young geologist changed Alaska history Lands selection officer convinced state leaders to gain control of petroleum-rich North Slope acreage before Prudhoe Bay discovery

By Rose Ragsdale Arctic National Wildlife Range (now the For Petroleum News Arctic National Wildlife Refuge) in 1960. A year later,Alaska, as part of its land ike so many other young adventurers, entitlement under the Statehood Act, L Tom Marshall came to Alaska in 1958 C.G. “GIL” MULL selected more than 1.8 million acres of to homestead on federal lands. the Arctic coastal plain bordering the Marshall, a young geologist from Beaufort Sea between what is now the Wyoming, also was eager to get in on the National Petroleum Reserve- Alaska and ground floor of the Cook Inlet oil explo- ANWR. ration boom touched off by the Swanson It was an area the federal geologists River discovery in 1957. had declared impossible to survey and “I also wanted to see if Alaska was the estimated it would take 100 years to magnificent place that my grandfather accomplish the task. Marshall said it was,”he told members of Marshall, who had been promoted to the Alaska Geological Society in April state land selection officer, enthusiastically 2008.The elder Marshall had traveled to recommended the swampy lake-covered Alaska decades earlier as a member of the area, which contains no surface rock Royal Canadian Mounted Police. exposures, be included in the state’s land From his first days in Alaska,the selections because he found general geo- younger Marshall recalls clearing land at a logical similarities of the Arctic Slope to cost of about $1,000 per acre. petroleum-bearing areas in the Rocky “Homesteading was very hard on per- Mountains. sonal finances,”he said in explaining his “Regional geology is what I used in my decision to accept a position with the A diagram illustrating the various sedimentary selection criteria because it had meaning very young Alaska state government as an strata on the North Slope; large black dots indi- to me. I transferred my Rocky Mountain cate potential oil or gas reservoir units. Diagram assistant lands selection officer. by Irv Tailleur, US Geological Survey. oil and gas exploration experience,”said “It looked very appealing as a means to Marshall. He also observed that the same get me through the winter,”he said. U.S. Geological Survey,which were USGS publications he studied were avail- Marshall, a University of Colorado- crammed with lots of information about able to the Bureau of Land Management trained geologist, was asked to evaluate a the Navy’s exploration program in the and the oil companies,“but they had their federal opening for land selection on the 1940s and 1950s. own ideas.” North Slope in 1958. Ironically,the state Division of Lands Similarities to Rocky Marshall said his principal source of polled seven companies and none of them Mountain areas information in preparing for the selections recommended the Prudhoe Bay area for was professional papers published by the The federal government established the lease. 30 Harnessing a Giant: 40 Years at Prudhoe Bay

The oil companies wanted to drill in Richfield Co. announced discovery and the area around the Colville basin, not on confirmation of the Prudhoe Bay oil and the Arctic coast. gas field, which 40 years later, remains During his investigation, Marshall said North America’s largest petroleum reser- he noticed the 2,000- to 2,500-foot C.G. “GIL” MULL voir. In a matter of months,“Marshall’s Lisburne Limestone over a broad area folly” had changed the course of history, with all sorts of porosity. becoming the single-most important “It excited me because back in source of revenue for the State of Alaska. Wyoming, we had the geologic equivalent of the Lisburne Limestone in our Madison Wrong theory, right location Limestone, which had been in many areas Marshall, who retired from the state in of Wyoming, including Casper where I 1978 as chief petroleum geologist for the lived for many for years,”Marshall said. Division of Oil and Gas, continues to He said the Lisburne Limestone was an work as a consulting geologist. unattainable 20,000 feet deep in the “I don’t want to sound too smart Colville Trough, and the limestone was about the discovery, because frankly, I was probably at that latitude in the Umiat oil dead wrong. I had read reports about the field. Tom Marshall included the barren tundra where the Sadlerochit Sandstone and the Ivishak “This was definitely considered an Prudhoe Bay oil field lies in land selections for the Formation.They were described as being uneconomic depth,”Marshall said.“But State of Alaska four years before the discovery. primarily quartzite, which has to be zero regional geology to me means there Others who participated in the porosity. I couldn’t see outcrops of these would be a rise from the Colville Trough Ivishak Sands in the information I had up to the Barrow Canyon Arch on the Prudhoe Bay discovery say about the region across the broad Slope, Beaufort Sea shore. It would be a terrific Marshall deserves considerable and it didn’t seem to impress the USGS gathering area for petroleum and maybe credit for the state owning the geologists who studied them in the there would be a big oil field there.” Foothills area,”he explained.“But as we acreage where the Prudhoe Bay know, the Prudhoe Bay discovery was pri- Leaders believe in “big banana” field is located. marily in the Ivishak sands of the Marshall recalled that he might have Sadlerochit Formation, which I did not gotten “a little overdramatic” when he navigable streams in upland areas. If the even consider. I thought it was going to told Alaska Natural Resources surrounding lands were state lands, it thus be the Lisburne. Fortunately, it’s in both of Commissioner Phil Holdsworth and state became unnecessary to define the limit of them. But the Lisburne is a far distant lands director Roscoe Bell that “there navigability of streams flowing into the third or fourth largest reservoir on the could be a big banana up there on the Arctic Ocean. North Slope.” coast.” The lands thus selected included Marshall’s modesty notwithstanding, Marshall’s selections were the first ever Prudhoe Bay. the significance of his contributions can- made by the state that had no known sur- not be underestimated. face uses. Trail leads to Prudhoe Bay Doing his job as a state employee, Luckily for Alaska,Holdsworth and Bell By October 1964, the state received Marshall essentially shaped a critical com- had faith in Marshall’s judgment. tentative approval for its land selections ponent of Alaska’s destiny. Other Alaska leaders were skeptical. from the federal government, and sched- Others who participated in the Marshall said he received calls from uled for December its first competitive oil Prudhoe Bay discovery say Marshall politicians in Juneau wanting to know and gas lease sale on the North Slope. deserves considerable credit for the state what the basis was for “Arctic waste land In this sale, the state took in a total of owning the acreage where the Prudhoe selection.” $5.6 million in bonus bids for leases cov- Bay field is located. Other taunts included “Marshall’s ice- ering acreage in the Kuparuk-Ugnu area “Tom Marshall deserves a monument box” and “Marshall’s folly.”Fellow home- of the North Slope.Though it wasn’t a for persisting in getting the state to select steaders dubbed the land selections huge sum, it was enough to cover the the acreage where the discovery of “worthless tundra.” state’s land selection filing fees and com- Prudhoe Bay was made. He fought tooth Perhaps the cruelest taunt came later pensate for its loss of highway funds for and nail from his appointment in 1960 after some very disappointing dry holes the entire North Slope. until he convinced the governor in 1963 were drilled on the Colville and at Union’s Marshall was ecstatic. to make the selections on the North Kookpuk well from those who had wit- Richfield Oil Co. picked up more than Slope,”said John Sweet,Alaska district nessed Marshall’s earlier enthusiasm and 71,500 acres of land covering the crest of explorationist for Atlantic Richfield Co. at who suggested that “there might be just a subsurface geological structure on the the time of the discovery. the ‘banana skin,’up there,”Marshall shores of Prudhoe Bay in the July 1965 The Alaska Legislature has honored recalled. sale. Marshall for his work, and Sweet told the It turned out that selection of the British Petroleum, following theories Alaska Geological Society in April that it coastal plain area offered an additional developed by its geologists, acquired near- should ask the geosciences department at advantage because it eliminated potential ly 82,000 acres lower down the flank of the University of Alaska to name a per- future disputes between the state and fed- the Prudhoe Bay structure. manent chair in honor of Tom Marshall. ◆ eral governments over the definition of Nearly three years later,Atlantic “He deserves it,”Sweet added. Harnessing a Giant: 40 Years at Prudhoe Bay 31 32 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 33 Lease sales opened doors to prosperity Making North Slope acreage available to industry for oil and gas leasing ushers in exciting new era of challenges, opportunities

By Rose Ragsdale For Petroleum News

n 1960, the federal govern- I ment established the Arctic C.G. “GIL” MULL National Wildlife Range (now the Arctic National Wildlife Refuge), covering the entire eastern end of the Arctic Slope and Brooks Range from the Canning River to the Alaska-Yukon border. The State of Alaska,as part of its land entitlement under the Statehood Act, selected more than 1.8 million acres of the Arctic coastal plain bordering the Beaufort Sea between NPR-A and the wildlife range.This swampy lake-covered area contained no surface rock exposures but was recommended for selection by the state’s only geologist,Tom Marshall, who recognized some general geological similarities of the Arctic Slope to petroleum- bearing areas in the Rocky A map showing the lease blocks acquired by various oil companies at the first sale of leases on the North Slope in Mountains. December 1964. BP and Sinclair bought most of the leases on a large structure near the Colville River delta. Selection of the coastal plain 13, offering state-owned lands on the North Sale 14, covering the crest of a subsurface area had an additional advantage because it Slope, near the mouth of the Colville River geological structure adjacent to Prudhoe eliminated potential future disputes east of NPR-4.The sale also included some Bay.At that time, the only information avail- between the state and federal governments tracts in Cook Inlet and offshore Kodiak able was seismic data combined with geo- over the definition of navigable streams in Island. Of the total $5.5 million in bonuses logical predictions on the nature of the sub- upland areas. If the surrounding lands were that the state received from the sale, some surface rock types projected from the out- state lands, it became unnecessary to $4.3 million was from tracts on the North crops in the Brooks Range, 80 to 130 miles define the limit of navigability of streams Slope.The highest amount per acre to the south and east.The nearest flowing into the Arctic Ocean. received by the state of Alaska was $31.96 exploratory well was in NPR-4, 75 miles The lands thus selected included per acre on tracts U-3-5-42 and U-3-5-43 west of Prudhoe Bay.British Petroleum, Prudhoe Bay,an obscure geographic feature submitted by British Petroleum and Sinclair with lower bids, acquired nearly 82,000 named more than 130 years earlier by Oil and Gas Corp. (This sale did not include acres located lower down the flank of the Arctic explorer Sir John Franklin for his tracts above the Prudhoe Bay structure.) structure. friend, Capt.Algernon Percy,Baron of In July 1965,Alaska held Sale 14 and The bonuses paid by the oil industry for Prudhoe and later Fourth Duke of took in a relatively modest amount in total North Slope leases in these two sales held Northumberland in the first penetration by bonuses. In this sale, tracts C14-123 and by the State of Alaska were said to have white men along the Arctic coast west of C14-124 both brought $93.78 per acre, a pleased then-Gov.William “Bill”Egan, who the Mackenzie River in Canada. record high. It was on these relatively had taken the risk and allowed the industry Alaska offers first North Slope acreage expensive tracts that three years later, to come in. ARCO and Humble would drill Prudhoe In late 1964, the state received tentative Bay State Well No.1 and make their historic ARCO acquires critical offshore tracts approval for its land selections from the fed- discovery. On Jan. 24, 1967,Alaska held Sale 18 in eral government, and in December held its Richfield Oil and Humble Oil as partners which 15 tracts mostly offshore in Prudhoe first competitive oil and gas lease sale, Sale acquired more than 71,500 acres of land in People who know Crowley know it takes more than a little ice to break our spirit.

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Bay were offered to industry along with acreage in the Katalla area near Prince William Sound. A memo from Pedro Benton C.G. “GIL” MULL to Charles Herbert through Roscoe E. Bell on Dec. 16, 1966 held the following paragraph: “The Arctic Slope area is the same area we recommended originally,which was approved by Mr. (Phil) Holdsworth. Almost all of the area is offshore, however, according to the protraction diagrams, which check very closely with recent (Bureau of Land Management) surveys in the area, several of the tracts include small projec- tions of uplands or small islands. I suggest we include these uplands parcels to maintain a solid and logical lease pattern.” Bids of only $1 per acre by T. A map showing the leases acquired by various oil companies at the second sale of leases on the North Slope, in Miklautsch on C-18-1 and C18-2 July 1965. At this sale, Richfield and Humble bought most of the leases on the crest of the Prudhoe Bay structure, were the only bids for these BP acquired many leases on the flanks of the structure. tracts and thus the high bids. The only other bidders in Humble Oil Co. company bid a total of Within a year, those two tracts the sale were British Petroleum On tracts C18-10 and C18- $885,293.The next highest bid would bring a tidy return on and a partnership between 11, which adjoin two tracts that in the sale was a modest investment. Atlantic Richfield Co. and ARCO acquired in Sale 14, the $5,029, and BP did not even bid 36 Harnessing a Giant: 40 Years at Prudhoe Bay on C18-10 and C18-11. C18-10 brought $121 per acre, while C18-11 drew $233 per acre from ARCO. The highest bid from BP in the entire sale was $53.77 per acre.

The lease sale that made Alaska rich Some say that Sept.10, 1969, was the day Alaska got rich. It was the day Alaska held its most famous and lucrative oil and gas lease sale, netting more than $900 million in bonus bids for state coffers. (This was the first sale of North Slope lands after the Prudhoe Bay discovery.) In the days leading up to the sale, oil WARD W. WELLS COLLECTION, OF ALASKA ARCHIVES STATE industry scientists and executives from around the globe converged on Anchorage, crowding hotel lobbies and motels to over- flowing. Former ARCO Alaska President Harold Heinze recalled how he spent the days leading up to the sale helping to generate the information that would form the basis of the company’s bids. “I got a transfer to Alaska in February 1969. I was the youngest of the young.Very “The day Alaska got rich.” Gov. Keith Miller holds the microphone at the State of Alaska 23rd Oil and shortly I found myself in Dallas where I Gas Lease Sale in the Sydney Laurence Auditorium in Anchorage on Sept. 10, 1969. Alaska Department worked in a closet for most of the summer of Natural Resources Commissioner Tom Kelly stands at far right. with one other engineer.We did the evaluation for ARCO of the 1969 sale.I had a The world comes to Anchorage to bid to prevail in getting the acreage it chance to see things from the perspective In the days leading up to the sale, wit- particularly wanted.The only thing for cer- of the lowest of the low.Because of the nesses said big raw-boned Texans rubbed tain was bidding would be high. secrecy,we had to do everything ourselves, shoulders with nattily suited businessmen For the State of Alaska,the stakes also read all the charts and do all the interpreta- from Japan and smooth-talking executives were high. Of the bonuses collected from tion ourselves. I coded all the stuff.ARCO from New York and London, all seeking a all 22 lease sales held during Alaska’s 10- already had a tremendous acreage position.” piece of the action in what had become year history,including the three previous Heinze said amazing stories about the the hottest oil play in the world. sales on the North Slope, the state had net- behavior of various sale participants sur- Groups of company men — directors, ted a total of $97.6 million. faced. accountants and geologists — huddled Speculation leading up to the sale sug- “We heard that Hamilton Brothers got a together in corners to plan their strategy, gested that Alaska could attract as much as train in Western Canada and they rode up those already operating on the North Slope $1 billion in bonuses and trounce the previ- and down the track and everybody jealously guarding the geological informa- ous U.S. record of $603 million paid in involved in their bidding group had to stay tion they had obtained, while others had to 1968 for 363,000 acres off the California on the train whenever it stopped,”he said. guess at what were the best locations and coast in the Santa Barbara Channel. But “Several wells were drilled on the Slope what they might have to bid to get them. some Alaska officials played down the sale’s that summer and people went to great Rumor and counter-rumor ran riot as indus- prospects, talking in terms of an expected lengths to find out about them.” trial spies tried to break through the tight $100 million in bonuses. Even that amount Episodes of industry espionage became cordon of security around the North Slope would have been welcome, considering rampant. Company scouts would land and drilling operations. that the state’s total annual budget that year creep about the tundra with binoculars, On offer were 451,000 acres of previ- was $150 million. Heinze said. ously unleased land around Prudhoe Bay Drama, humor and huge bonuses “There times when things got really bad, and the Colville River. It was the fourth when there were three helicopters circling time that the state had put up North Slope On the morning of Sept. 10, representa- in a tight pattern around the drilling rigs. land for lease since selecting 2 million acres tives of oil companies, state officials, FAA traffic control was out of Fairbanks at in 1964 of former federal land on the North investors and journalists filed into the 350- that time, so it wasn’t a good scene,”Heinze Slope. seat Sydney Laurence Auditorium. In the recalled. Though 37 wells had been drilled by 23 presence of armed guards and state troop- It was then that many of the company active rigs within the area and thousands of ers, bidders handed over sealed envelopes, “scouts decided that it wasn’t worth killing square miles of the region had been each envelope marked with the number of someone over the information”and settled mapped by 24 different seismic crews, no the tract it concerned. down to”pretty civilized”behavior, he company knew what the others might bid In an almost festive atmosphere, the sale added. for leases offered, nor what it would have began promptly at 8 a.m.The very first bid Harnessing a Giant: 40 Years at Prudhoe Bay 37 opened brought gasps of aston- announced a bid of $72.3 mil- The sale also had its early policies toward the oil ishment, then wild cheering lion, or $28,233 an acre, from moments of humor.Almost all industry. from the audience.This set the Amerada-Getty. of the tracts drew joke bids of a “I’m not anti-oil company,” pattern for the rest of the day’s The audience stunned with few cents an acre. On one Boyko said.“They are in busi- excitement, witnesses said. sheer disbelief lapsed into a whole parcel, in fact, the sole ness to get the most they can, What immediately became moment of total silence before bid was $1, entered by locals and we need them here. But we apparent was that many compa- erupting in pandemonium. Not who were very upset when the must not let them develop our nies formed new alliances to only was it the highest bid ever offer was rejected. country on their terms.” improve their chances of suc- offered in a U.S. lease sale, it The entry into the auditori- After the big lease sale, cess in the sale. Gulf Oil joined also was incredibly close to the um of a mysterious figure Boyko tried to file an injunction BP,while Shell teamed with previous bid. Had there been a dressed as an Arab, complete against the state issuing some of Texaco. Mobil, Phillips and leak? Why had the Amerada with flowing robes, head-dress the leases, but the effort failed. Standard Oil of California also group bid alone this time when and dark glasses, caused a buzz Most Alaskans were delight- mostly bid together. Many small- most of the day,they had bid of speculation that a rich ed with the way the sale had er companies also banded with Louisiana and Land Middle Eastern sheikh might be gone and with the sudden together to improve their odds - Exploration, Marathon Oil and entering the fray — until it windfall. However, a group of Amerada-Hess and Getty Oil; H.L. Hunt interests? turned out that a local humorist Alaska Natives and their sup- Hamilton Brothers, Union and There had never been any had donned the disguise. porters held a protest during Pan American; Continental Oil, doubt that Tract 57 contained the sale and occasionally inter- Sun Oil and Cities Service. oil. One estimate put its recov- Natives protest state leases rupted the proceedings in the BP-Gulf bid $15.5 million for erable reserves at 200 million Not everyone was delighted auditorium.While seemingly one of six lots on the Colville barrels. with the results of the sale. insignificant, the protest proved River delta, 100 miles northwest Standard Oil had purchased Some economists at the to be a symptom of deeper dis- of Prudhoe Bay,or more than seismic results from the area University of Alaska argued that content among Alaska Natives, $6,000 per acre. from BP and thus, had a good the state had shortchanged and portend of challenges yet Excitement mounted when idea of the parcel’s potential. itself by selling so much North to be faced and overcome in BP-Gulf won the second lot out Standard had been involved Slope acreage so quickly. the future of North Slope oil of 21 separate bids, for an aver- with Amerada Hess in joint bid- Edgar Paul Boyko, former development.What looked so age of about $8,000 per acre. ding for Louisiana leases some Alaska Attorney General during promising in the fall of 1969, a The third parcel went even months earlier, so each group the Hickel administration, also year later was beset with prob- higher, selling for $12,000 an was familiar with the other’s voiced doubts about the state’s lems and uncertainties. ◆ acre. By the time the BP-Gulf way of thinking. partnership had swept the Observers theorized that board, taking all six of the lots they had placed a similar value offered in the Colville River on the oil, related it to their delta, the companies has joint experience in the offered a total of $97.7 million Louisiana sale and added a bit in bonuses. for luck.The resulting closeness When the bidding moved to of the bids likely was a coinci- the leases that were available dence. around Prudhoe Bay,prices “Some of the bids in the went so high that even the BP- 1969 sale were squeaker close,” Gulf coup paled to relative Heinze said.“That’s when you insignificance.The most spec- start checking your security.” tacular moment of the sale In the end, the sale netted came when bids were opened just over $900 million, or an for Tract 57, the closest parcel average of $2,180 an acre.A to the oil discoveries at plane had been chartered to Prudhoe Bay.Atlantic-Richfield transport the checks to the Co. bid $26 million. BP-Gulf bid Bank of America in San $47.2 million, which remained Francisco, while bankers were the high bid as offers of $36.8 on hand to cancel the checks million and $36.6 million were from unsuccessful bidders. announced from the Hamilton Not all of the bids were group and Continental-Sun- record-breaking. One block, Cities Service.The next bid, tract 36, was close to BP’s dis- however, drew a roar of shout- covery well and thought to ing and cheering from the have been really hot. Mobil- crowd that shook the auditori- Phillips-Standard picked it up um.The Mobil-Phillips-Standard for $18 million, double the only group bid $72.1 million.A other significant bid from moment later, the state Humble. 38 Harnessing a Giant: 40 Years at Prudhoe Bay Richfield, others go elephant hunting Geologists pore over few North Slope outcroppings; California company’s team gets excited about oily sands in two locations

By Rose Ragsdale For Petroleum News Richfield Oil Co. geologists examine an outcrop in the foothills of the Brooks Mountain Range in the early 1960s. The California major n the early 1960s, Richfield Oil Co., with poured resources into North Slope explo- I other companies that were operators, ration, gambling that field parties supported participated in the discovery of oil and gas by helicopters could find an elephant. fields across Cook Inlet, racking up success after success with such finds as Middle Ground Shoal, Granite Point, McArthur River and North and South Cook Inlet. Richfield’s emphasis was on large promising structures beneath the Upper (ALASKA) INC. OF BP EXPLORATION COURTESY Cook Inlet, but the events taking place in the far north on some 88,000 square miles of nearly treeless tundra would have greater significance and far-reaching con- sequences for both Richfield and Alaska. In the summers of 1963 and 1964, at least six oil industry helicopter-supported field parties were fanned out across the central and eastern North Slope and into ANWR.The abandoned Navy camp and airstrip at Umiat, located on the Colville catering company had opened a kitchen small amount of field gear on the side River in NPR-4, served as a base of opera- for meals. racks.The ship could cruise at about 60 tions; at the time, this was the only Most of the companies started off in mph and without the extra fuel, had a improved airstrip on the North Slope mid-June working out of Umiat; the heli- range of about 2 1/2 hours of flying time. other than the airstrips at Barrow and copter of choice was the Bell 47G2, a The limited fuel range meant that most Kaktovik, which were too remote from small machine with a piston engine field parties soon ran out of work that the outcrop belt to be of use to industry mounted behind a fish bowl-shaped bub- could be done within the fuel range from geologists. Umiat was a beehive of activity. ble for a cockpit, and an open tail boom. Umiat, thus after a week or so, most of the Wien Airlines had a station agent and sev- The main rotor blade was wood, with a field parties then moved to widely dis- eral bush pilots based there, as well as stainless steel leading edge and a steel persed tent camps located on river bars or three-day-a-week scheduled flights from spar down the center of the blade. The lakes. Fairbanks on its route to Barrow.Aviation G2 held the pilot and two passengers, an Richfield Oil’s 1963 field operation was fuel was available for purchase, and a extra 10 to 20 gallons of fuel in cans and a similar to that of many of the companies, with the exception that in addition to the helicopter, Richfield had chartered a single engine Cessna 180 to work with the field party for the summer. Early in the season the Cessna was equipped with wheel-skis so that it could operate on the frozen • Environmental Assessment • Homeland Security lakes as well as on the gravel strip at and NEPA Permitting • Engineering, Design, and Umiat. In mid-June 1963, Richfield moved • Natural Gas Pipeline Permitting Construction Services its camp to Peters Lake in ANWR;the 180 • Worldwide Technology-Based Pipe • Natural Gas Pipelines and Fabrication Facilities LNG Facilities ferried camp equipment, a large amount • Environmental Data Quality • Hydroelectric and Fossil Fuel of aviation gas, and passengers to the Management Services Power Plants campsite on the lake shore.After camp • Contaminated Sites Closure—Innovative, • Reﬁning and Petrochemical Facilities was established, the plane was used to Technical Solutions 7D ferry fuel caches to other lakes, and fly 00 2

www.shawgrp.com 06 back and forth to Umiat to mail in reports, M 2000 W. INTERNATIONAL • AIRPORT RD. STE C-1 • ANCHORAGE, AK 99502 P: 907.243.6300 29 ship rock samples, and pick up food ship- Harnessing a Giant: 40 Years at Prudhoe Bay 39 ments that came in on Wien Airlines.After field seasons without break until the end the lake ice melted in early July,the plane of August, when they migrated back into was switched to floats and the pilot con- Umiat. tinued his routine, flying between the tent camp at Peters Lake, a subsequent camp C.G. “GIL” MULL Field party report makes impact at Cache One Lake near the Echooka In 1963, Richfield sent geologists River, and a small lake at Umiat. Garnett Pessel and Gil Mull, two young- Most of the tent camps consisted of a sters with several years of experience, to large wall tent as a cook tent, an office the North Slope to build on the data tent, and several sleeping tents. Most field acquired by field parties in 1959 and 1960 parties consisted of four to six geologists, and U.S. Geological Survey reports from and the most important people in the the 1940s and 1950s. camps were the pilots, helicopter mechan- Late in the season after two months of ic, and of course the cook.A good cook This outcrop on the Sadlerochit River in the Arctic exploring, Pessel wrote a letter to Ben was the key to a happy camp. Besides the National Wildlife Refuge shows interbedded black shale with a high content of organic material and Ryan, conveying their conclusions and pilot, the mechanic was the key to a safe bentonite, or altered volcanic ash. It is in a formation describing an outcrop he had seen on the operation — he spent most evenings called the Hue Shale, which is one of the rich oil banks of the Sagavanirktok River. working on the ship, inspecting, tuning, source rocks on the North Slope and in ANWR. At a banquet held by Gene Rutledge in repairing, and balancing the rotor blades, When Richfield Oil Co. geologists C.G. “Gil” Mull and Gar Pessel saw these rocks during the summer of 1988, in honor of the men featured in his which soaked up water during every rain- 1963, they realized that there were good oil source book,“Prudhoe Bay Discovery,”Charlie storm. Field operations consisted of flying rocks widespread on the North Slope. Selman, Richfield’s division geophysicist, the geologists, two at a time, out to creek recalled events leading to the decision to rate locations and operating independent- or river bluffs or mountain top outcrops continue exploring the North Slope. ly,it was not uncommon for two or three to walk traverses, describe the rocks, and “It was Cretaceous sand that just crum- helicopters and field crews to end up on map the geology on aerial photographs or bled in your hand,”Selman said.“He the same outcrops at the same time — all topographic maps.At the end of a traverse (Pessel) got all excited and wrote,‘If we trying to be secretive and proprietary or the end of the day,the helicopter pilot can’t find an oil field in something like about what they were seeing and inter- would return to ferry the crew to a differ- this, I give up.’” preting. Evenings in camp were spent ent location or back to camp. Selman added to Pessel’s letter, recom- compiling data and updating the mapping. Though it was a big country and most mending that Richfield send a seismic And so it went for the summer — most of of the field parties were camped in sepa- crew up north. Ryan attached a cover let- the field parties had 2 1/2- to 3-month 40 Harnessing a Giant: 40 Years at Prudhoe Bay ter simply stating that he concurred with Pessel and Selman’s recommendation and sent it to Harry Jamison, Richfield’s Alaska district manager in Los Angeles. “As luck would have it,”said Selman,“a C.G. “GIL” MULL drilling operation had been canceled somewhere else, so ... Jamison got the funds to put a seismic crew on the North Slope.”

Great deal for Humble Despite Richfield’s growing enthusiasm for North Slope exploration, limited budgets In early August 1963 at Cache I Lake, Richfield Oil Co. geologists Gar probably would have quashed the compa- Pessel and C.G. “Gil” Mull worked out of a tent camp, using a Bell G2 ny’s oil hunting efforts in the Arctic were it helicopter and a Cessna 180 floatplane on the lake for transportation. not for a strategic partnership it entered Cache I Lake is a small lake near the Echooka River, close to the north- with Humble Refining Co. ( predecessor to eastern Brooks Range mountain front. Pessel discovered an oil saturated sandstone on the Sagavanirktok River near this location. ExxonMobil) in preparation to bid on leases in the State of Alaska’s first lease sale for North Slope acreage in December 1964. It and a lot of federal leases Richfield had pre- Atlantic Refining Co., another ARCO prede- was the first of many joint agreements viously acquired) — all for $1.5 million in cessor, acquired leases that were to between the two companies in the 1960s cash and an obligation to pay for another $3 become part of the Kuparuk River field. that led to an enduring and lucrative part- million worth of seismic data. So for $4.5 Most of the 600,000 acres that the State nership on the North Slope. million, Humble got onto the North Slope of Alaska offered for bid in the Colville area, “That partnership has to have been one after most of the other major oil companies west of Prudhoe Bay,were purchased by of the all-time great deals for Humble (now already had surface mapping and seismic Sinclair and BP.The bids averaged $32 per ExxonMobil),”Mull said.“It bought into half data and had already gotten a land position acre. of everything Richfield had done to that up there.” The next lease sale, for Prudhoe Bay,was point (which included the preceding years In the 1964 sale three other companies, held just over six months later in July 1965. of surface field mapping, two seasons of Sinclair Oil & Gas Corp. — a predecessor of Richfield and Humble were determined to seismic data (winters of ’63-’64 and ’64-’65), ARCO, its partner, British Petroleum, and outbid BP for this acreage, wrote author One More Way to Fly

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Jack Roderick in Crude Dreams. Five people the Prudhoe structure’s flank, too, which Richfield’s merger with Atlantic made selected the tracts: Harry Jamison,Armand likely would have landed them ownership sense because Richfield “was somewhat Spielman, Ben Ryan, George Shepphird and of virtually all of the Prudhoe Bay oil field, cash poor,”which is one of the reasons that Charlie Selman, according to Roderick. Mull told Petroleum News. Humble was able to buy in to Richfield’s “Actual bids were worked up by the Los A third lease sale in 1967 covered off- interests on the North Slope, Mull main- Angeles land group under Frank shore leases in Prudhoe Bay that were not tained.The merger of Richfield and Atlantic, McPhillips.” included in the first sale of leases in the Roderick said,“catapulted the new organiza- “We decided we had to bid at least three Prudhoe Bay area. tion into seventh in size of all oil companies times what BP bid in 1964 to get the tracts,” in the United States.” Selman told Roderick. Richfield and Atlantic It was a momentous decision that would Refining join forces Frustration and hope lead the company to riches. Atlantic Refining also picked up 28 tracts Richfield’s Jamison was appointed as At $94 per acre, Richfield outbid BP, in the July 1965 lease sale. Later that year, ARCO’s first Alaska district manager after Atlantic Refining, Chevron, Shell, Mobil and Atlantic purchased Richfield and the two Anderson directed senior ARCO executive Phillips for the crestal tracts — those companies merged in 1966 to become Mo Benson to put the smartest geologist he parcels located on the crest of the Prudhoe Atlantic Richfield Co., or ARCO.The two could find in charge of the Alaska explo- Bay structure. men who led the merger talks were Atlantic ration program. “We bid higher on the crest and then Chairman Robert O.Anderson and Richfield The last half of the 1960s was both a lower on the flanks,”according to Richfield Chairman Charles S. Jones. frustrating and trying time for oil compa- geologist Harry Jamison.“That’s exactly why The two companies needed each other, nies exploring northern Alaska. we got the crest — the gas cap — and a according to Roderick’s description in For example,ARCO and Humble spent portion of the oil. BP got the oil rim.” Crude Dreams. Richfield, he said, had come more than $4.5 million (in 1968 dollars) on BP did end up with more than half the under scrutiny from the U.S. Justice the Susie No. 1 well, just north of the oil in the Prudhoe Bay field “by spreading Department because the company was Brooks Range foothills before finally aban- its bids across the entire structure,”said partly owned by Sinclair and Cities Service doning the well on Jan. 9, 1967. Roderick, who, at the time, was an individ- Oil, and Atlantic hadn’t been able to drill Still, from that great loss came one of the ual investor in Alaska oil and gas leases. any wells on the North Slope. biggest triumphs in business history:The Ironically,Humble wanted to put anoth- Mull said the Justice Department was discovery of oil at Prudhoe Bay. ◆ er $1 million into the sale, but Richfield looking at Richfield for possible antitrust demurred. If Humble had prevailed, the violations.“In fact, all three companies com- Former Richfield geologist Gil Mull con- partnership might have won the leases on peted vigorously in many places,”he said. tributed to this report. 42 Harnessing a Giant: 40 Years at Prudhoe Bay A geologist finds the right words Young co-leader of 1963 summer field party stirs ambitions of California major to find the elephant lurking on the North Slope

By Rose Ragsdale level-headed district geologist, For Petroleum News Ben Ryan, wholeheartedly agreed with Pessel and Mull. ar Pessel’s introduction to Ryan later said Pessel’s letter C.G. “GIL” MULL G Alaska had nothing to do was perfect for getting manage- with oil. ment to spring loose money for The Richfield Oil Co. geolo- a seismic survey. gist, who wrote a letter that set Pessel also helped destiny in motion a chain of events along when he and Mull gave leading to the discovery of the Humble executives a presenta- Prudhoe Bay oil field, traveled tion on their findings during to the state in 1959 to look for the winter of 1964-65. coal for U.S. Steel. “Humble came in with us Pessel, a California that next summer,”he recalled. Technology Institute graduate Pessel, meanwhile, switched student who was raised in from geology to geophysics Hawaii during World War II, after Richfield’s merger with spent that first visit studying Atlantic Refining Co. the geology of the Gulf of “I had an extensive mathe- Alaska. matical background and also Two years later, the experi- geology,and interpreting geolo- ence likely earned him a shot at gy and geophysics put them a return trip to Alaska,this time together,”he said.“I kept doing to look for petroleum for geophysics and I switched back Richfield Oil. In 1963, Richfield to geology the last year I was sent Pessel to the North Slope with Richfield.” as co-party chief with another In 1971, Pessel got a job young geologist, C.G.“Gil” Mull, with the Alaska Division of Oil of a summer field party and Gas, which included the assigned to study the area’s Division of Geological and geology. Geophysical Surveys.A year Toward the end of that first Gar Pessel, the young geologist who sparked a fever in Richfield Oil. Co. senior managers to intensify exploration of Alaska’s North Slope, poses beside a dis- later, when the state created the season, Pessel sat down in his play of Prudhoe Bay core samples. Alaska Geological Survey,he tent and penciled out the now was drafted to serve as senior famous note. Bay field discovery site. geologist. “Gil was looking over my shoulder the “We were hopeful all along, but it con- Pessel continued to work for the state entire time, and we were conversing back solidated our opinion about the potential for 20 years. During this period, he and forth on the phrasing in the letter,” of the area. It had the Big Three: source worked in the Brooks Range, and Chugach Pessel said. rocks, reservoir rocks and structures,” and Talkeetna mountains, and served as He and Mull had spent the summer Pessel said. section chief and deputy director. prowling across the Slope in a Bell G2 The letter Pessel wrote conveyed the When he retired from the state in helicopter. hopefulness that the two young geologists 1991, Pessel began teaching field geology “We knew we were in a petroleum felt, but it also conveyed an underlying and computer applications for geology at basin and we started seeing some poten- excitement about the possibilities. the University of Alaska Fairbanks. He also tially good sands,”he recalled in a recent “We have a good section of excellent ran the geology department’s student labs. interview. reservoir possibilities, and positive proof After six years, he finally retired. Until that point, Pessel said he had of the petroliferous nature of these sands. “I kept telling them that when your been discouraged by the structures they If one cannot get an oil field out of these computer expert is 63 years old, some- saw in the Foothills. conditions, I give up,”wrote Pessel. thing is wrong,”he quipped. He and Mull actually identified two oil- H.C.“Harry” Jamison, Richfield’s district Today,Pessel, an accomplished pilot filled sandy outcrops, one on the manager, said the missive was brief, to the and flight instructor, divides his time Katakturuk River in the Arctic National point and said all the right things. between summers at a cabin at Sheep Wildlife Refuge and another one on the It also didn’t hurt that the man to Mountain and winters in Oregon. He also Sagavanirktuk River south of the Prudhoe whom the letter was addressed, Jamison’s helps out with a small air taxi service. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 43

A big tracked vehicle pulls seismic equipment along its designated path during a 1969 “shoot” on Alaska’s North Slope. Cat trains were used in winter to transport equipment and seismic crews in the Arctic as early as the 1950s and on the North Slope, beginning with John C. “Tennessee” Miller’s historic venture in 1964. ATLANTIC RICHFIELD COMPANY COLLECTION, RICHFIELD COMPANY ARCHIVES ATLANTIC ALASKA OF STATE

Prudhoe Bay or bust! Accounts of cat trains, convoys and accidents illustrate just how harsh North Slope working conditions were in early days

By Rose Ragsdale For Petroleum News The newly formed Atlantic Richfield Co. moves the Loffland Bros. drill rig from the Susie well north to drill Prudhoe Bay State No. 1 with a cat train in February 1967. he 1964 cat train expedition from Bob Jacobs, a pilot for Interior Airways, took the photo. T Fairbanks to the North Slope has the honor of being the first overland transport of seismic exploration equipment for hunting for oil on state lands. Other cat trains OF C.G.COURTESY “GIL” MULL had made their way north in the mid- 1950s in connection with the military Distant Early Warning Line operation west of Prudhoe Bay,but the cat train of 1964 was the first conducted for the oil industry. Spearheaded by John C.“Tennessee” Miller, founder of the Frontier Companies of Alaska Inc.,the 1964 operation stemmed from Miller’s desire to prove that it was possible to transport men and equipment shack, bunkhouse and three D-7 Cats, or weeks staging everything for the cat train overland for oil industry work. In early Caterpillar tractors, to plow the snow and at the Dunbar railroad siding near 1964, Miller approached Charles Selman, pull all of the supplies on logging sleds. Fairbanks.Among the crew making the trip then division geophysicist for Richfield Oil Miller convinced Selman to use his cats was land expert, cook and handyman Don Co., with the idea of running a cat train to on the condition that he loaded all the nec- Simasko. the Arctic coast. essary equipment and supplies and that he Simasko headed back to Fairbanks to Selman had one geophysical crew on ran the train all the way to Sagwon. pick up supplies.There he learned a the North Slope and wanted to set up After several weeks spent organizing Cheechako’s lesson. another one.The crew would need a cook the expedition, Miller then spent two “One time we had to go back to 44 Harnessing a Giant: 40 Years at Prudhoe Bay

Fairbanks and it was 65-70 below,”Simasko said in an interview published in Renergy in 1984.“I was saying,‘Gosh, it isn’t so bad. Back at Dunbar, it’s only 38 below.’ Everyone started laughing when they C.G. “GIL” MULL found out we had a mercury thermometer. You see,mercury freezes at 38 below.The thermometer was frozen solid.They told me to get an alcohol thermometer and then we found it was 68 below.So then we were cold!” In addition to frigid temperatures, the cat train crew battled frequent equipment breakdowns, numerous mishaps, desperate- ly inadequate clothing, poor morale, and dangerous river crossings to get to the North Slope via Anaktuvuk Pass. The hardware hero of the cat train was Caterpillar Tractor Co.’s D7 model.Why? It had the horsepower to pull the sleds and higher ground clearance than the D6 model. It also had an angle blade to move Workers unload a D-7 Caterpillar tracked vehicle from an Alaska Airlines Hercules C-130 airplane in March 1968 after Atlantic Richfield Co. and Humble Oil Co. realized that had a discovery at Prudhoe Bay and snow,good weight distribution in the would need a lot more equipment. Both vehicles were the work horses of the era, the D-7 because of its tracks that could bridge the tundra and versatile size and durability and the C-130 because of its cargo capacity. Alaska Airlines was a major cargo available parts, according to Boyd Brown, hauler on the North Slope during the era. who managed the train crew from Livengood to the North Slope. More trains followed Miller and others during the famous 1964 Further use on the North Slope enabled as conditions improved cat train, which transported seismic exploration equipment to the North Slope. No the D7 to prove itself.The heavier D8 After the discovery of the Prudhoe Bay road was actually built — only a simple made river crossings more hazardous, field, the rush to get drilling equipment to path cleared across the tundra. while the lighter D6 model was a little the North Slope encompassed every “We had a tractor with us to pull us mode of transportation, including cat over the ice ledges we met along the way,” trains and truck convoys. Roper said.“These ice steps were more In a 1970 interview with an inter- than two feet high.We had radios in our nal British Petroleum publication, cabs, and though we were alone, we could truck driver Burn Roper vividly talk to each other and to the convoy described the weather conditions as leader.” ground-based crews scrambled to deliver BP’s critically needed drilling High rate of accidents BP EXPLORATION (ALASKA) INC. BP EXPLORATION equipment. “We needed almost as much fuel Still, the furious activity that immediate- to keep warm as to run the rigs,” ly followed the discovery of Prudhoe Bay noted Roper.“The temperatures took its toll on human life.Thirty-two men were something fierce, running were killed on the North Slope in 1969. down to minus 65 degrees Most of them were killed in 10 aircraft British Petroleum used tracked vehicles like this one, begin- Fahrenheit.At this temperature, steel crashes, including a Hercules transporter ning in the early 1960s, and throughout its early explo- was as brittle as candy; human flesh lost with all of its crew.Three men were ration of the North Slope. The company partnered with froze in 30 seconds. Engines had to killed when a hovercraft crashed during Sinclair Oil and Gas Co. in 1963 and drilled its first explo- an experiment, and two men walked into ration wells (all dry holes) in the region in 1964. be kept running round the clock — from fall to spring, they never helicopter blades.Another was crushed stopped.” between a forklift truck and its load.Two small for pulling sleds, Brown said. Roper drove a 20-ton transport truck in workers were drowned in the cement It took 40 days, though only 18 days a convoy that in 1968 made the 11-day, they were pouring to erect a building, and were spent actually traveling.The rest of 600-mile trip up the winter Arctic Ice another was killed during a seismic sur- the time was spent making repairs and Road from Fairbanks to the North Slope. vey. addressing other unforeseen setbacks. This road was sometimes called the In addition, there were many serious During the trip, the Good Friday earth- “Hickel Highway,”named after then-Alaska accidents on drilling rigs and the Arctic quake devastated Southcentral Alaska and Gov.Walter J. Hickel, who spurred the cold took a further toll in snow blindness overshadowed their efforts. road’s construction. and amputations due to frostbite. Oil But Miller’s cat train succeeded in what The Hickel Highway followed old drilling was a dangerous enterprise 40 it set out to do, blazing a trail for others to Native trails and much of the route was years ago, and the harsh weather made follow. bulldozed by Boyd Brown,Tennessee the North Slope especially hazardous.◆ Harnessing a Giant: 40 Years at Prudhoe Bay 45 Atlantic Refining brought Mangus back Company invested in North Slope exploration from the Foothills to the Arctic coast, while others scoffed at area’s oil potential

Petroleum News Post-merger collaboration But this time instead of find 500 million or 600 million barrels of oil.’His implication n 1963,Atlantic Refining After the merger with a boat, Mangus was that it would be impossi- Co. began to supplement Richfield, Gil Mull worked with I conducted his field ble to find a field that large. what was known about the Mangus, as did Hank Repp of Humble in 1966. surveys with the aid of How wrong he was about geology of the North Slope that.” from work done years earlier “In 1964, (we) shot our first his fixed-wing and line across the Prudhoe struc- On the other hand, statis- by the U.S. Geological Survey helicopter air support. tics were on his side, Mangus when the federal government ture,”Mangus said.“Lonnie Brantly and Jack Carlisle were observed.“With what was explored the National Club,”Mangus said.“A contem- making maps as the data known and given the industry Petroleum Reserve–4. porary geologist with Union arrived from the field crew.” history and experience at that Marvin Mangus, a former was deriding Atlantic Refining Richfield was also shooting moment, it was very unlikely USGS geologist, returned to for exploring on the North the area and had its own inde- we would find something his former haunts as chief Slope. He said with great sar- pendent interpretation on large enough to be commer- geologist for Atlantic Refining casm,‘Why, you would have to ◆ which Prudhoe Bay leases cial,”he added. in charge of Alaska explo- would actually be acquired. ration. Concurrently,Larry Pipes on But this time instead of a Atlantic Refining’s Dallas staff boat, Mangus conducted his was also making an interpreta- field surveys with the aid of tion.Atlantic had as partners his fixed-wing and helicopter for some of the geophysical air support. work Pan American and Sun Geologists Don Jessup and Oil, but the two companies lost Louis Cramer along with Bob interest and did not participate Tabbert from the Geosciences in bidding for leases at Sale 14 group in Dallas assisted in July 1965 when the leases Mangus during that first sum- that Richfield and Humble ulti- mer. Elder Lebert was Mangus’ mately became part of the faithful cook and camp hand Prudhoe Bay oil field, Mangus for all the years he worked for said. Atlantic and ARCO. In 1964, Gerald “Jake” If only he could Thomas served as Mangus’ eat his words field assistant and in 1965, it was William C. Penttila and “I remember one day at Richard Moore. lunch at the ‘Bull’(community) table at the Petroleum

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H.C. “Harry” Jamison, Alaska district manager for Richfield Oil Co. and later Atlantic-Richfield Co., looks over the Sagavanirktok River and outcrops of the Sagavanirktok Formation near Sagwon in June 1964. Jamison says credit for the discovery of the Prudhoe Bay oil field should go to the talented team of explorers and dedicated support staff, both in the field and the office, which spent arduous years and considerable effort chasing the dream on the North Slope. Oil field discovery saga spawns MVP Geologists, others say ARCO’s Jamison is individual most responsible for California major’s exploration success on North Slope

By Rose Ragsdale involving a number of people and events gram that saw the young geologist “sitting” For Petroleum News over a period of time — all of which had to on 15 wells his second day on the job. occur.“And in some ways the same thing Jamison’s boss on that first job in 1950 f the discovery of the Prudhoe Bay oil was true for the Prudhoe Bay oil discovery. was an engineer named Mo Benson, who I field on Alaska’s North Slope was a team But, without Harry,a number of the critical became a pivotal figure in his future in effort, then H.C.“Harry”Jamison, a young, events for Richfield would not have Alaska. mid-career geologist out of California, was occurred. Richfield — and thus ARCO — At first, Jamison spent three 24-hour unquestionably that team’s most valuable would not have had its position at Prudhoe days on the rig and six days “off”in the player. Bay had it not been for his push and man- company’s offices working eight-hour “Without Harry Jamison, there is no agerial expertise,”he explained. shifts. For 18 months,he held that position, question in my mind that Richfield Oil Co. working with petroleum engineers, rough- and later Atlantic Richfield Co. would not Educated in California oil fields necks and toolpushers. He then spent six have had its position at Prudhoe Bay.I con- Jamison, who attended high school in St. months doing subsurface work in the San sider Jamison the most important single Louis and Beverly Hills, served in the U.S. Joaquin Valley. individual in the position Richfield had at Navy during World War II and saw combat “I was a total greenhorn,”recalled Prudhoe Bay,”said C.G.“Gil”Mull, a field in the Pacific as a second-class radio techni- Jamison recently.“I had never been on a rig geologist who had worked for Richfield and cian, had earned his geological credentials before. It was a great education.” later worked for Humble Oil & Refining Co. at the University of California, Los Angeles, Richfield then transferred Jamison and when the oil field was discovered in 1968. and in Richfield Oil Co.’s Cuyama Valley oil his boss to a two-person office in Olympia, In an exploration program, Mull said field in central California. Wash. He spent three years there, including there is usually no way to say that any one Richfield hired Jamison two years after 18 months alone, studying the geology of person was responsible for a discovery — the 1948 discovery of the 400-million-barrel Washington State. because these things are a team effort field during an intensive development pro- “I did (plenty of) tough field geology, Harnessing a Giant: 40 Years at Prudhoe Bay 47

Geologists H.C. “Harry” Jamison and Ben Ryan visit one of Richfield Oil Co.’s exploration well sites C.G. “GIL” MULL in the Katalla-Yakataga area in July 1961.

mapping areas that had never major integrated oil company, been mapped before. By the was working offshore in Cook time I finished, I had a lot of Inlet. Besides its 1957 discov- field experience.That’s because ery of the Swanson River oil the western part of the state field on the Kenai Peninsula — was like a rainforest and as you the first commercial discovery go into the mountains, the in Alaska — the company had Cascades, it’s more like a high participated with other compa- desert environment,”he nies in several successes, includ- recalled. ing the Beluga River gas field. Jamison returned to Los Another critical piece of the Angeles as an administrative puzzle fell into place some geologist, where he worked for months later when Richfield’s a couple of years before gaining district geophysicist Charles another broadening position as “Charlie”Selman began to work administrative assistant to directly with Jamison and Ryan. Mason Hill, Richfield’s manager “It was a very positive of exploration. change. Charlie was a math major from Arkansas State, a Jamison journeys to Alaska good ole Southern boy and a It was 1960 before Jamison damn good geophysicist. He made his first trip to Alaska.He understood the ramifications of was asked to do troubleshoot- physics but he was an excellent ing on the Katalla-Yakataga pro- interpreter. Most people would ject for Richfield with partners be lost, but Charlie was able to Sinclair and British Petroleum. convey what he did in maps In early 1961, Richfield and words,”Jamison said. decided to reorganize its Alaska Selman, Ryan and Jamison operation and put Jamison in became the prime movers in charge as exploration supervi- Richfield’s exploration program sor for Alaska and the Pacific on the North Slope. Northwest and posted his good “Ben was close-mouthed, friend Ben Ryan to Alaska as dis- terse, factual and solid in con- trict geologist. trast to Charlie, who could tell “Ben and I were very close. really good stories,”Jamison He worked with me in Cuyama recalled.“I think our friendship for several months and we and ability to work together worked together in Bakersfield. had a lot to do with what hap- I knew him to be blunt, forth- pened on the North Slope.” right, and very honest in his Spurred by the promise of opinions and a sound geologist more federal land becoming of few words. So when he said available for exploration, something, I listened,”Jamison Richfield sent a geological field said. party to the North Slope in Richfield, a moderate-size 1963. 48 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 49

Earlier, Richfield has as many as eight ery that it may offer more profound geological field parties scattered across insights into how organizations work. Alaska during the summers of 1958, 1959 “If a team works well together, some- GAR PESSEL and 1960.These field parties included two times you can come up with successful parties on the North Slope in both 1959 ideas that move from the bottom to the and 1960, which had given Richfield the top.Any interruption or block along the general framework of the region’s geology. way would have resulted in failure,”he Now the company needed to fill in the observed. details between the Colville and Canning But failure wasn’t in the tea leaves for rivers, where BLM was promising to offer Richfield. acreage in 1964. Charles “Charlie” Selman, Alaska district geo- Jamison said Richfield shot a line of seis- “We wanted to zero in on that area, physicist for Richfield Oil Co., confers with Ben mic from the foothills to Prudhoe Bay, though it was expensive. But it was not as Ryan, Richfield’s district geologist for Alaska, dur- across the Prudhoe Bay structure. It also expensive as putting together a seismic ing a visit to the company’s first seismic opera- shot a closed anticline, and drilled the Susie crew,”Jamison said. tion on the North Slope in December 1963. State No. 1 well, trying to find the sand that Gar and Gil had been so enthusiastic about. executive vice president of exploration and Fateful summer field work During this multiyear effort, costs began production. to mount and Richfield needed a partner. The results of the 1963 field work “My job was to convince them that this Jamison said Hill suggested that Richfield would reverberate through the years was an opportunity we could not afford to approach Humble Oil & Refining Co. (pre- Jamison, who visited Alaska every two or pass up,”Jamison said. decessor to ExxonMobil), saying Humble three weeks, sent two young geologists, Richfield hired the United crew. would be a good partner. C.G.“Gil”Mull and Gar Pessel, to the North “There is no doubt that was the turning Jamison called Humble and J.R. Jackson, Slope as co-leaders of the summer field point,”Jamison recalled.“Without that deci- Dean Morgridge and Ken Fuller came party. sion, we would most certainly have become across the street to meet with Hill and Excited by oil shows in sandy outcrops a minor player on the North Slope.This Jamison. he and Mull ran across near the Sag River, chain of events illustrates that no one per- “I showed them our seismic results, Pessel penned a letter to his bosses, son can take credit and say I found which at that time did not include data extolling the potential of the rocks they Prudhoe Bay.” from the Prudhoe Bay area, and the samples had seen. Jamison said the teamwork aspect so that Gar and Gil had sent back from the Sag When Ryan and Selman got the letter, pervades the story of Prudhoe Bay’s discov- they passed it along to Jamison with their River.Those samples had 2 Darcies of per- endorsements. When Jamison read Pessel’s letter, he decided to attach a longer missive, outlining the company’s options and recommending seismic coverage of the area. He also warned his bosses that if Richfield did not follow up on the field party’s findings, the company “would be out in the cold.” “Both Ben and I knew Gil and Gar very well.They knew good rocks when they saw them, and if they had the guts to stand behind their observations, then we could stand behind them,”Jamison said. Richfield’s managers had just begun to consider possibilities when Selman and Ryan phoned to alert them that a seismic crew would be available if the company moved quickly to secure their services.

Richfield managers become believers Jamison encountered a certain amount of resistance in pushing for more investment in northern Alaska exploration among higher management at Richfield, not only at this point, but throughout his tenure as Alaska district manager, according to Mull. Richfield’s manager of exploration, Mason Hill, was traveling when Jamison got the call about the seismic crew,so he went to Frank McPhillips, the general manager of land and exploration, and Bill Travers, the 50 Harnessing a Giant: 40 Years at Prudhoe Bay meability.You could practically blow After the merger, Jamison was again Jamison said. through them, and they had oil stain,” tapped to manage the Alaska district. It was a Union Oil explorationist who Jamison recalled. In addition to his reputation at Richfield, told Jamison during a plane ride back to Persuaded, the Humble trio traveled east Jamison said he believes the impression he Los Angeles that “he would drink all the oil to company headquarters in Houston and made on Louis Davis,Atlantic Richfield Co.’s that anyone finds on the North Slope.” recommended to their board of directors vice president of exploration, during a As outrageous as his attitude sounds that Humble partner with Richfield and three-hour, one-on-one meeting gave him a today,it was understandable at the time. leave Richfield as operator of the North leg up in securing the appointment. “The general knowledge of logistics, Slope venture. But it was his first boss, Benson, who drilling, expenditures, climate and weather Humble’s board agreed. made the final decision to re-appoint of Alaska was virtually nil, even in Alaska,” “They paid us quite a bonus and Jamison as Alaska district manager, after Jamison said.“Very few people, even resi- became our 50 percent partner,”Jamison ARCO Chairman and CEO Robert O. dents of Fairbanks, had knowledge of the said. Anderson told him to find the “brightest” North Slope. It was really telling that once For that simple act of faith and a few person he could to run the Alaska opera- you flew over Bettles, you would not see a million dollars, Humble (later Exxon) tion. single light all the way north to the coast. If would reap billions. As district manager, Jamison was the the Prudhoe Bay well hadn’t come in or point person for merging the Richfield and been encouraging, it would have written Richfield merges Atlantic Refining organizations. ‘finit’ to the (industry’s North Slope explo- with Atlantic Refining “That time was like walking on ration) effort at least for a number of years.” Jamison continued to lead the charge as eggshells. It was tough, putting two groups But Prudhoe Bay State No. 1 did find a Richfield cleared more hurdles in the years together,”he said. big oil field, and the rest, as they say,is his- leading up to the oil field’s discovery.These Atlantic Refining was a larger organiza- tory. included hiring a second seismic crew for tion with procedures in place, so “it was a After Prudhoe Bay the winter of 1964-65, acquiring more fed- steep learning curve for us Richfield guys,” eral acreage from BLM, drilling the disap- Jamison recalled. Jamison continued to serve as Alaska dis- pointing Susie well. Fortunately,Atlantic’s people were just trict manager for ARCO during the tumul- “Everybody had basically given up, going as enthusiastic about the North Slope’s tuous months after the discovery in 1968 into the period in 1966 when Richfield was potential as Richfield’s staff. and 1969. He was then transferred to Dallas acquired by Atlantic Refining,”he recalled. “We had good vibes between us.We had and became Alaska coordinator. “We were shaking in our boots. I was really discovered the Trading Bay field in Cook In 1970, Jamison was seconded to concerned. I had seven children.” Inlet that summer after the merger,” Alyeska Pipeline Service Co. for two years,

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907.278.2208 | 800. 277.5516 | chiulista.com Harnessing a Giant: 40 Years at Prudhoe Bay 51 where he worked to gain congressional That work continued for the next eight on the North Slope. passage of the Alaska Native Claims years and included a couple of special pro- • “Again, he did an admirable job of sell- Settlement Act. jects on the North Slope for the U.S. ing the idea to management at the proper In 1973, he returned to Dallas to Department of Energy,Jamison said. time. It was that seismic crew that the fol- become vice president and chief geologist lowing winter ran the first seismic survey in ARCO’s North American producing divi- Jamison’s role key to ARCO’s success for Richfield across the Prudhoe Bay struc- sion. “I greatly enjoyed that job.We had lots Despite his quiet exit from ARCO many ture and that influenced the bidding that of activity,good budgets and good people,” years later, Mull and others say Jamison Richfield and Humble did in the first he recalled. remains the guiding force behind the fate- Prudhoe Bay oil and gas lease sale, in which In 1980,ARCO asked Jamison to take ful events that culminated with the giant oil the two companies in partnership acquired over as district manager for the Rocky field’s discovery. the leases across the highest part of the Mountain District in Denver and to super- Mull lists Jamison’s major contributions Prudhoe Bay structure. (This was before the vise exploration for the central and western as follows: merger with Atlantic Refining Co.) United States. He said he found the hybrid • “It was Jamison who personally • “Harry also played a role in arriving at job a challenge, especially trying to put pushed to get the second Richfield surface the successful bids that Richfield/Humble together an exploration group by drawing geological mapping field party on the submitted for those leases.The Atlantic on the resources of other districts. North Slope in 1963 — against some Refining Co. bids on the same tract were Then in May 1981, he was promoted to amount of resistance in the company,from way,way low,and if it were not for the senior vice president of Atlantic Richfield people who thought that Cook Inlet was Richfield/Humble leases, the merged Co., and appointed president of a new com- the only place to be working.And it was on Atlantic Richfield Co. (ARCO) would not pany he was charged with creating — that summer field party that we found two have had its large position in the field. ARCO Exploration Co. oil-saturated sandstone outcrops that had Instead, British Petroleum and other compa- “I stayed for four years, and we found a never previously been seen. nies would have had the majority of the number of modest-size oil fields scattered • “Harry then took the information field, and ARCO would have been a minor around the country,”he said. about the oil-saturated sandstone that Gar player in the area. In 1985, the oil industry underwent a Pessel found and other favorable indica- • “ARCO senior managers would have major retrenchment and Jamison was tions, and at the proper time convinced had nothing to sell when they sold ARCO, a offered a golden parachute to retire at age high-level management that the company profitable company out from under the 60 with the same benefits he would have needed to have a seismic geophysical employees in 2000, if it had not been for enjoyed at age 65. He took the offer and exploration crew that coming winter if we things that Harry Jamison did 40-plus years immediately began working as a consultant. were going to be successful in exploration ago,”Mull concludes. ◆ Innovative Building Solutions

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COVER-ALL AND VIPERSTEEL ARE REGISTERED TRADEMARKS OF COVER-ALL BUILDING SYSTEMS INC/GATORSHIELD IS A REGISTERED TRADEMARK OF ALLIED TUBE AND CONDUIT 52 Harnessing a Giant: 40 Years at Prudhoe Bay Prudhoe Bay discovery: A retrospective Richfield and then ARCO district manager takes a playful look back at the way it really happened and what might have been

Editor’s Note:These remarks are Armand Spielman, Leo Fay, Gar Pessel, excerpted from a paper written for the Pete Clara, Rudy Berlin, Milt Norton, and Alaska Geological Society Technical yes, Gil Mull, all played vital roles. Conference, April 19, 2008 Then there were fellows from Humble’s (Los Angeles) office, who we By Harry Jamison convinced in 1964 to buy into a very risky program. J.R. Jackson, Dean irst of all, let an old man of 83 years Morgridge and Ken Fuller were the first F tell, for the first time, the unvar- believers. nished truth. I found it! I alone had the OF H.C.COURTESY “HARRY” JAMISON After the merger with Atlantic genius and persistence that led to suc- Refining in 1966, I once again was privi- cess! leged to lead the combined company The problem is that it didn’t happen H.C. “Harry” Jamison, Alaska district manager for office in Anchorage as district manager. like that. It was a team effort from the Atlantic-Richfield Oil Co. when the Prudhoe Bay This time we were drilling the Susie Unit beginning. oil field was discovered in 1968, hikes through No.1 with a Loffland Bros. rig that we It was my privilege to lead the explo- the rocks on a trip in southern Utah. flew to the North Slope in Hercules ration group within Richfield (Oil Co.) all stratigraphic and structural analyses cargo planes on lease from the Air Force. that did the geological field work, the that convinced us we had viable play. The (Susie) well was dry. So we took the recon and detailed seismic and the over- Fellows like Ben Ryan, Charlie Selman, rig some 60 miles north over the tundra Harnessing a Giant: 40 Years at Prudhoe Bay 53 to PB in early 1967 and spudded the tests immediately and know you’ve hit Prudhoe Bay State No. 1 well before the big time jackpot! breakup, only to shut down in early May. What a rush! To have your company We had great construction foremen, executives, the politicians and the press expediters, drillers and tool-pushers C.G. “GIL” MULL hailing you as the new heroes of pros- under the overall supervision of my perity for the company,Alaska and the drilling and production superintendent nation.What an ego trip! Lee Wilson. Names like Benny The problem is: It didn’t happen like Laudermilk, Joe Dunn,Wray Walker, Ernie that. Arp, Bill Congdon, Joe Mann, John Ruosi In reality, it was a very slow, gradual and Jim Keasler come to mind as well as awakening.We had shows all the way our chief pilot, Marv Meyer, who ran our down the well.We had good, solid forma- aircraft operation and Roland Champion, tion tests in the Sadlerochit and the district landman. Lisburne.We had test rates that were The well was drilled, cored, tested spectacular anywhere else. But were and evaluated in an absolutely first-class they good enough to make us believe fashion.These geologists and engineers we had a billon-barrel oil field? Not real- who designed and carried out the pro- ly. gram gave us the foundation for expan- We had a thick gas column on top of a sion on which to build the future devel- relatively thin oil sand in the Sadlerochit. opment of the field. Everyone knew what gas was worth John Sweet was my exploration man- in Alaska, especially on the North Slope. ager and Don Jessup, Bill Pentilla, Marv H.C. “Harry” Jamison, Alaska district manager for Yes, there was excitement and enthu- Richfield Oil Co. and later Atlantic-Richfield Co., Mangus,Woody Kingsbury and Jerry examines sandstone and conglomerate in the siasm within ARCO and certainly in the Rochon are a few key names. Tertiary Sagavanirktok Formation near Sagwon in news media. But the Eureka moment did Why do I get so specific as to name June 1964. not arrive until we had drilled the confir- these Alaskans? To emphasize that it was mation well, Sag River State No.1.That a team effort and to give some degree of Reality intrudes on rosy recollection was in July 1968, about a month after recognition to those who might not be Man, was it exciting to drill into the the completion of the Prudhoe Bay well. remembered. Our ranks grow thinner, Sadlerochit and the main Lisburne objec- The first drill test in Prudhoe Bay No. 1 year by year. tive and have the great shows, cores and was in December 1967 and the confir-

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3695 Springer St. • Anchorage, AK 99503 907-561-6501 x225 • www.tse-ak.com 54 Harnessing a Giant: 40 Years at Prudhoe Bay mation well was drilled in July 1968. Secondly, I was ecstatic that we could That was really a gradual process, at last be credited with real success, a especially when you spend your time commercial discovery on the North fending off constant inquiries about Slope of a world-class oil field.A lot of what you found and you really don’t people then and later, for whatever rea- C.G. “GIL” MULL know the answer. son, attributed the discovery to luck. Of course, I knew we’d been lucky Discovery reflects hard work but that our luck was based on 10 years My feelings then were two-fold. of exploration, land acquisition efforts, First, I was very proud of my team and logistical operational know-how and the accuracy of that interpretation that management level support all the way to led us to the discovery, followed by a suc- the top at both ARCO and Humble. H.C. “Harry” Jamison, Richfield Oil Co.’s exploration cessful step-out seven miles from the dis- We gave ourselves the opportunity for supervisor for Alaska confers with Ben Ryan, serendipity through hard, intelligent, per- Richfield district geologist for Alaska, during a visit covery. None of us had ever heard of to the company’s first seismic operation on the such a thing. It took a lot of science, engi- severing work and guts and judgment North Slope in December 1963 neering and management guts. and it paid off. Discoverers bask in glory of find. Not! After all that science and engineering and good luck, what resulted for us was a leisurely round of congratulatory ban- quets and awards ceremonies, big promo- tions and public adulation. It was fulfill- ing and satisfying to be part of it. The problem is: It didn’t happen like that. What really happened was CHAOS. It was like being caught completely unawares in a monstrous avalanche.We were deluged with orders, directives, requests, demands, obligations and bureaucratic nonsense. First, we had to meet the immediate demand for action on the Slope, extension wells, air strip construction and controls, camp expansion, construction equipment, additional aircraft, fuel supplies, seismic crews, drilling rigs, security measures and a hundred other things. And we had to begin the series of findings for long-term development and production and pipeline segments. What about housing several hundred, then several thousand workers? What about flying them in and out? What about finding them in the first place? You get the idea, hundreds of operational questions and problems were facing us every day. Then we had the equally immediate need to vastly expand our staff in Anchorage in all disciplines. My bosses decided to provide me with managerial level help. So we added legal, business operations and employee relations departments and managers during the next few months. But no local help was forthcoming with government and public relations.We were left to our own devices and that was largely my baili- wick. And we had visitors, did we ever have visitors! Harnessing a Giant: 40 Years at Prudhoe Bay 55

I know personally that any- who bought the rifle (Lee one in ARCO at all,who had an Harvey) Oswald used to kill excuse, had an urgent need to Kennedy) landed on our come to Alaska.Folks also need- airstrip at Sag River State. He ed to cross the Arctic Circle, to debarked from the plane and be in a photo at the discovery was met by Bill Congdon, who well or at least, the Sag River was our rough and ready,surly site, and have a personal visit and imposing tool-pusher. with the district manager, me. King asked how far up the We had folks from Humble, rig he and his party could go. including auditors, who wanted Bill growled,“You’re there to know why I rented Cats right now.” from Tennessee Miller’s Frontier Congdon also told King he Rock and Sand, rather than was on a private air strip with- using company equipment out permission. John climbed (which we didn’t have). back aboard and left with no We had the board of direc- further discussion. tors from Union Oil, including FRANK H. WHALEY,WIEN COLLECTION, THE ARCHIVES ALASKA OF STATE Chairman Fred Hartley,who Discovery still satisfying during the oil spill in Santa Besides all the furor and Barbara, was rumored to have View of a test hole drilled through permafrost for oil drilling operations at frustration, there was a lot of Prudhoe Bay. said,“What’s a few damn birds?” satisfaction, too.After all, we’d And we had a delegation of found what was acknowl- about 50 from the United edged as the largest oil field in Nations in New York, accompa- North America and had done nied by the president of ARCO, it in an efficient and profes- Thornton F.Bradshaw. sional manner. And we had enumerable Thirteen billion barrels of members of the media, includ- recoverable oil doesn’t go ing Time, Oil & Gas Journal, unnoticed. Bakersfield Californian, Life, Oil My impression at the time: World,Los Angeles Times, San It was a damn good job of Francisco Chronicle, National exploration in a remote, for- Geographic, Reader’s Digest bidding, harsh part of Alaska. and many,many others. It was an adventure and a lot Our first visitor, however, of fun.The folks I had the was Alaska Gov.Walter J. Hickel, privilege to work with were who was accompanied by Phil and are my personal heroes. Holdsworth and Roscoe Bell, To borrow a familiar, partial and we had a group of Humble quote from Dickens:“It was managers along. During the UN the best of times ...” ◆ visit, one of the diplomats was a small, slender East Indian lady dressed in a bright orange sari. At the time, we were beginning construction of the base camp, which required drilling a large number of 18-inch-wide eight- and 10-foot-deep holes in the permafrost to set pilings and foundations for the camp modules. The Indian lady was very active and curious, and I remember being petrified that she would wander off and fall into one of the piling holes and disappear. Another incident occurred, when, contrary to all flight and ground control rules, John J. King [the independent oil man 56 Harnessing a Giant: 40 Years at Prudhoe Bay Field discovery debate still rages Finding the subsurface ocean of oil known as Prudhoe Bay involved two Arctic exploration wells and spanned more than a year

By Rose Ragsdale For Petroleum News Workers burned the crude oil that flowed out of the Prudhoe Bay State No. 1 discovery well during Drill Stem Test No. 5, which flowed 1,162 barrels of oil per orty years after a team of explorers first day March 12, 1968. Atlantic Richfield Co. had no tanks F drilled into North America’s largest oil available to contain the flow. C.G. “GIL” MULL field, the actual date of discovery remains a subject of debate, even among the geologists, engineers and others who participated in the world-changing event. The problem is that Prudhoe Bay’s discovery,like most great endeavors, didn’t happen in a moment of brilliant inspiration. Instead, it took months of gritty toil, frustration and uncertainty to unleash the elephant locked beneath Alaska’s North Slope. “It was about as exciting as watching a tree grow,”recalled John Sweet, then district explorationist for Atlantic-Richfield Co.

Pivotal event in question Sweet, who was an integral part of the Prudhoe Bay discovery team, said he is convinced the Prudhoe Bay oil field wasn’t actually discovered until the Sag River No.1 most people point to 1968. They reportedly asked Louis Davis, ARCO’s vice president of exploration in well was drilled in the summer of 1968. Getting a decision to drill “The first well provided the leadership, North America, to commit to the well pro- but if that had been all we’d found, it would The discovery chronology was compli- ducing at least 500 barrels per day of crude not have been commercial,”Sweet told cated by many factors, including the harsh before they would agree to the project. Petroleum News. working environment and the constraints Davis subsequently told colleagues that H.C.“Harry”Jamison, then ARCO’s Alaska on drilling during the Arctic summers. he had no idea what Prudhoe Bay State No. exploration manager, disagrees. Jamison, In retrospect, the Prudhoe Bay well has 1 would find, but he quickly assured the who led the Prudhoe Bay discovery team, been described as a last ditch effort as the accountants that the well would produce at said the oil field’s date of discovery was the entire oil industry,smarting from the least 500 barrels per day. date the well was completed. expense and disappointment of 14 dry E. M.“Mo”Benson Jr., who was Harry Alaska Oil and Gas Conservation holes, seemed ready to abandon the North Jamison’s boss and the ARCO executive Commission records show that date as June Slope as a frontier for petroleum explo- who reported to CEO Robert O.Anderson 24, 1968. ration. on the North Slope project, told author “I’ve worked all over the United States, ARCO and Humble Oil Co. pooled Gene Rutledge in the 1980s that a major and I’ve always heard that conventional wis- resources to drill the Prudhoe Bay State No. factor in convincing skeptics in Dallas was a dom is that the date of discovery is the date 1 well in April 1967, after the daunting fail- provision in the contract that the company the well was completed,”Jamison said. ure of the Susie No. 1 well to the south and had negotiated for a rig to drill the Susie “Otherwise, you’ll get dates all over the an impassioned plea to try again from then No.1 well. place. One guy will say,‘It was when we got Gov.Walter J. Hickel. Benson said the rig’s owner, Loffland first oil shows,’another one will say,‘It’s C.G.“Gil”Mull, who “sat on the well”as a Bros., required ARCO to pay the cost of when we first hit the Sadlerochit (forma- geologist for Humble Oil during the shipping it back to Fairbanks. He said ARCO tion), and another will say,‘No, it’s when we Prudhoe Bay field’s discovery,said ARCO’s President Thornton F.Bradshaw argued that drilled the Mississippian.’You get the idea.” exploration department unanimously voted since the rig was already on the North People, in fact, can’t even agree on the to drill in the Prudhoe Bay structure. Slope,ARCO could essentially drill a second year in which the oil field was discovered. Number-crunchers in the Dallas head- well for relatively little additional cost. Some still say it happened in 1967, though quarters, however,were skeptical. “According to Brad, he used that argu- ment to support drilling the Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 57

State No. 1 since, in effect, he flowed to the surface. A worker uses considered it a free well as we a blowtorch to “This was an encouraging would have had to spend the thaw a thread sign, but again not terribly signifi- same money to fly the rig out in protections link cant, because other wells previ- lieu of drilling,”Benson said. of casing pipe ously drilled on the North Slope during early “Be that as it may,Bob Prudhoe Bay also had recovered small Anderson’s support never exploratory amounts of oil from rocks of wavered. My personal role in drilling. Cretaceous age — those deposit- the decision to drill Prudhoe ed some 65 million to 140 mil- Bay was purely in support of the lion years ago,”Mull said.

exploration people who were COLLECTION RICHFIELD COMPANY ATLANTIC On Dec. 27, 1967, the explor- enthusiastic about the ers encountered strong gas prospect,”he said. shows during drill stem test No. 2 Benson said the list of those in the Triassic Ivishak Formation who supported drilling at of the Sadlerochit Group, and the Prudhoe Bay included Rollin well flowed with a high volume Eckis, former president and for- of gas, which marked a signifi- mer exploration manager of cant gas discovery. Richfield, Mason Hill and the entire Alaska Prudhoe Bay State No. 1 well April 22, 1967. Mull said this was the first significant exploration staff of Richfield as well as the After a couple of weeks,ARCO shut down production of hydrocarbons from what has exploration staff of Atlantic Refining,includ- the well for the summer due to breakup become the main reservoir of the Prudhoe ing Julius Babisak, the exploration manager. conditions. Bay field, but no oil was encountered in this All of the persuasion apparently worked. The explorers re-entered the well in part of the section. “The location of the Prudhoe Bay State November 1967, and soon had small oil Eyewitnesses recall that the gas rushed No. 1 well and of the confirmation well, shows in drill cuttings from thin sandstones out of the well roaring like a jet engine with Sag River State No. 1 were picked by our in the upper part of the well in late such force that it shot 50 feet into a 35-knot explorationists, including Harry Jamison, a November and early December 1967. wind. geologist and Alaska district manager of After drilling resumed Feb. 1, 1968, oil ARCO,”Benson told Rutledge. Early oil shows encouraging shows were seen in the drilling mud and in Benson said others involved in selection “This, however, is not uncommon on the cores from the lower 40 feet of sandstones of the well sites included former Richfield North Slope; almost all wells drilled there in the Sadlerochit Formation, but were not Chairman Charles S. Jones, Ben Ryan, encounter some shows in the Cretaceous evaluated until logs were run on Feb. 8, Charlie Selman, Bill Bishop and Bob Specht sandstones, thus seeing small oil shows in 1968. from the Richfield side and ARCO Vice this part of the section was not particularly “Evaluation of these logs along with the President of Exploration Louis F.Davis, significant,”Mull said. core data indicated that the formation had James A.Savage, chief geologist and John A. On Dec. 8, 1967, a drill stem test run on sufficient porosity and contained enough Thomas, chief geophysicist as well as an interval of thinly inter-bedded oil that it could be considered a discovery,” Marvin Mangus, John Sweet and Don Jessup Cretaceous age sandstones and shale from Mull says. on the Atlantic Refining side. 6,876 feet to 6,998 feet deep flowed with The opinions of all of these professionals some natural gas and recovery of a few bar- Field discovery announced came together when drillers spudded the rels of oil from the drill pipe, though no oil ARCO sent out a news release Feb. 16, 58 Harnessing a Giant: 40 Years at Prudhoe Bay

1968, announcing the discovery of oil, though no flow tests had been conducted. Two days later, the explorers conducted drill stem test No. 3 in the top of the C.G. “GIL” MULL Lisburne limestone. It flowed with a large amount of gas and an estimated 100 barrels per day of oil, but at least part of this oil and gas flow probably came from the over- lying Sadlerochit Formation rather than the Lisburne, according to Mull. The first actual measured oil flow from The Loffland Bros. rig that drilled the Prudhoe Bay State No. 1 well viewed from the air in January 1968. Atlantic-Richfield the Prudhoe Bay well came in Drill Stem Co. spudded the discovery well in April 1967, but actually dis- Test No. 5 in the Lisburne on March 12, covered oil in early 1968. The smooth area to the left is the 1968. It measured the flow at 1,152 barrels snow and ice winter airstrip that served the well location. per day of oil and produced headlines March 13, 1968. “However, this oil was produced from Lisburne limestone and dolomite that underlies the sandstone and conglomerate of the Sadlerochit Formation, and showed that there are multiple reservoirs in the Prudhoe Bay area,”Mull said.“This had the effect of increasing the likelihood that the Prudhoe Bay field could be economically viable.” By May 1968, several drill stem tests had measured the flow of oil from several inter- vals in the Sadlerochit Formation. About a month later — June 25, 1968 — explorers drilling the Sag River State No. 1 well encountered oil in the Sadlerochit Formation, seven miles away and 400 feet deeper than crude found by Prudhoe Bay State No. 1. On July 18, 1968,ARCO and Humble announced that the Prudhoe Bay field probably contained 5 billion to 10 billion barrels of recoverable oil.

Support for winter discovery So when was the Prudhoe Bay oil field discovered? “As you can see, there was a succession of events that built to the realization that the Prudhoe Bay State No. 1 well was a commercial discovery,”Mull said in a letter to author Gene Rutledge in 1998.“But, if I had to pick a date at which one could say Serving the Oilfield in Alaska and the Rocky that oil was discovered in the Prudhoe Bay Mountains with Quality Products and field, I would pick Feb. 1, 1968, when the Innovations Since 1966 first oil saturated sandstone was encountered in what has become the main reservoir in the field.” 303-659-3339 BRIGHTON ,CO. Not so, says Marvin Mangus,ARCO’s well 970-263-8402 GRAND JUNCTION, CO. geologist for Prudhoe Bay State No. 1. “Oil was discovered at Prudhoe Bay in 505-327-0486 FARMINGTON ,NM. December 1967,”Mangus told Petroleum 307-472-3110 CASPER,WY. News.“We decided not to make it known 907-563-8999 ANCHORAGE, AK. until we drilled the confirmation well. So, the top brass decided to hold off making 907-659-9449 PRUDHOE BAY, AK. the announcement until February 1968. But all of us on the well had decided that we Harnessing a Giant: 40 Years at Prudhoe Bay 59

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Call us at 713-674-3163 or Kevin Durling at 907-273-1273 and let us tell you about our newest camp buildings for the Slope. Or visit us at portakamp.com. 60 Harnessing a Giant: 40 Years at Prudhoe Bay had something. It should have been right around Christmas 1967. Various aircraft cargo planes supported Atlantic Richfield “You just don’t have oil shows that big Co. and Humble Oil Co. when they drilled the Prudhoe Bay State No. 1 discovery well and Sag River State No. 1 unless it’s really good.We felt that it was a

confirmation well in 1967 and 1968. Here a WW II vin- C.G. “GIL” MULL discovery,”Mangus said. tage C-46 cargo plane waits in an unloading area near the Prudhoe Bay State No. 1 well. Frigid weather hampered progress Garnett “Gar”Pessel, a geologist who worked in ARCO’s geophysical department at the time on core samples coming in to Anchorage from Prudhoe Bay State No. 1, said one possible reason for the conflicting views on the discovery date was the huge amount of uncertainty that loomed over the operation that winter. Frigid temperatures “The drill had been progressing at a foot No. 1 May 3, 1968 and by July,ARCO and caused equipment to malfunction and an hour,”Sweet recalled.“When it hit the Humble geologists had tested the bogged down the pace of exploration. Sadlerochit, the drill rate went … to about a Sadlerochit Formation and confirmed the “During the early testing, the engineers foot a minute.We ran a test and we had gas presence of the Prudhoe Bay oil field. were unfamiliar with working in the cold. to surface at 1,250 Mcf/d. Mull said an interesting aspect of the Sag The equipment kept freezing up and giving “On Feb. 4, 1968, we reached … part of River well was the reservoir quality that the bogus results, and the guys kept arguing the Sadlerochit and what came out was geologists saw in the cores.“Normally,a about it,”Pessel said.“But Don Jessup, the aggregate, loose sand and oil, some of core that comes out of a core barrel con- district geologist for ARCO kept looking at which ran through the rig floor. sists of solid rock that you hope will have the cores and getting excited.” “I received a core analysis on Feb. 7, and oil or gas in the pore spaces. But in one of Sweet agrees that the cores looked it was one of the most dramatic things the cores from the Sadlerochit in the Sag promising.“I had never seen oil shows like you’d ever want to see.With that we made River No. 1 well, what came out was just a that before in my whole career,”he told the first reserve calculations,”he said. pile of loose sand, gravel and oil — which members of the Alaska Geological Society at immediately ran down through the derrick its annual technical conference in April Incredible signs, caution floor into the cellar below. 2008. Still, those tantalizing glimpses of Sweet said those first calculations were In an effort to keep findings confidential, something big did not an economic discov- based on reservoir characteristics such as ARCO had erected a sheet on the rig to ery make, according to Sweet. porosity upward of 30 percent, permeabili- screen off the area where the geologists examined core samples from the drilling Geologists aimed for Lisburne ty in Darcies up to 3 (when permeability in oil fields is usually expressed in millidarcies) crew. Part of the problem was that the initial and 65 percent oil saturation. Sweet’s fig- “What we were seeing in the samples target for the Prudhoe Bay well was the ures yielded 223 barrels per acre foot with was supposed to be a secret from the Lisburne Formation. However, Richfield 20 sections of proven, 17 sections of proba- drilling crews, but they generally had a pret- geologists had been eyeing the Sadlerochit ble and 33 sections of possible crude ty good idea of what we were finding, and Formation since doing field work in the reserves for a total of 2.3 billion barrels of particularly so, after seeing that oil running Brooks Range in the early 1960s, Mull said. oil. “That’s the number we called in to through the derrick floor,”Mull said. In fact, when Susie No. 1 reached its pro- Dallas,”he said. On June 25, 1968,Atlantic Richfield Co. jected total depth in the Jurassic Kingak at “In March 1968 what we had was an said in perhaps the most understated new 13,500 feet and ARCO and Humble’s geolo- unbelievable reservoir, a little oil value but release in oil company history:“The Sag gists flew to Barrow to telephone in their with good flow of oil and lots of gas. It was River State No. 1 — a joint venture with report, they made a pitch for “taking the exciting but with many questions,”he said. Humble Oil & Refining Co. — has encoun- Susie well on down another 2,000 feet or “Almost immediately,everybody’s minds tered oil in the same Triassic formation as so to the Sadlerochit to see what it looked turned to a confirmation well.We had to the initial well.” like,”Mull said. determine the oil column, if any,the water Anderson,ARCO’s CEO, said,“We believe A lack of casing at the well site prompt- table and the continuity of the reservoir and this is a significant oil and gas discovery,the ed company executives to “wisely”nix the an all-season location, which required tons extent of which must await further testing idea, he said. and tons of gravel.” and exploratory drilling.” Though the “Dallas people”pored over Significant isn’t even close to describing Dramatic breakthrough all the seismic maps, there was no drama the find that would change the company’s At 8,700 feet, the drillers got 150 barrels and little politics involved in selecting the — and Alaska’s — history forever. Just a per day of oil, but when they dipped below location of the confirmation well, Sweet month later,Anderson announced that the 9,500 feet, gas flowed for 3 minutes and oil said. find was potentially “one of the largest at 1,152 barrels per day , Sweet said. “It had to be a long step-out and near a petroleum accumulations known to the The period was frustrating because the source of gravel.That put the location near world today.” oil shows were in shale with very little the Sag River where geologists determined Says Sweet:“The statistical chance that sandstone.After the drill bit penetrated there was lots of gravel,”he explained. the Sadlerochit (formation) would occur in other formations in the well, it reached the The explorers spudded Sag River State conjunction with the Prudhoe Bay structure Sadlerochit formation at 8,200 feet. boggles the mind.” ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 61 Hickel had role in Prudhoe Bay’s destiny

Former governor had uncanny interactions through two decades that contributed to the oil field’s discovery and development

By Rose Ragsdale When asked by Taft how much land For Petroleum News Alaska would need as a young state, Hickel said he had no idea how many

ormer Gov.Walter “Wally” Hickel tells PATRICK JUDY acres there were in Alaska,let alone how F a great story about the Prudhoe Bay much the would-be state should have, so oil field discovery. he just blurted out “100 million acres.” “I flew to the Slope to meet with When he later learned that Alaska had (Atlantic Richfield Co.) Alaska district 365 million acres, Hickel said he should manager Harry Jamison,”Hickel told a have asked for half of that amount. group of geologists in April 2008.“He Six years later, Congress granted Alaska shocked me by telling me that they statehood with 103 million acres of land. (ARCO) were going to pull out. I told Alaska Gov. Walter J. Hickel, also a former U.S. Interior Secretary under President Richard Nixon, 40 billion barrels of oil Harry,‘You drill or I will.’They did and the played a key role in events leading up to the rest is history.” Prudhoe Bay oil field discovery. Hickel’s next brush with Prudhoe Bay’s Forty years later, the tale is so engaging destiny came when Atlantic Richfield Co.’s that people chuckle when they hear it, Hickel’s involvement with North Slope events began as early as 1952 when he Alaska district manager Harry Jamison and some may wonder if the 89-year-old called him in 1966 when he was governor retired politician embroiders around the read a report in The Anchorage Times that Congress was going to give Alaska 3 mil- of Alaska to plead the case for the state facts a bit. offering acreage adjacent to the Prudhoe After all, Hickel couldn’t really have lion acres. Hickel, a young housing contractor in Bay structure for oil and gas leasing. done the things he says he did, right? ARCO reasoned that it could never Wrong. Anchorage, thought that was a paltry amount. So he traveled to Washington, drill a well in the structure with open Not only did Hickel play a crucial role leases, but if all of the structure was in several important events leading up to D.C. on his own dime and ended up actually talking briefly with President Harry leased, even if other companies owned the 1967 discovery,he also predicted the the acreage, exploration could go forward. oil find and went on to influence national Truman. Hickel also visited then U.S. Senate Hickel agreed and seven critical tracts policy on oil development in the Alaska were leased in a state sale in January Arctic as U.S. Interior Secretary under Majority Leader Robert Taft, R-Indiana, and made the case for statehood for Alaska. 1967. While other companies pulled out President Richard M. Nixon. after drilling dry hole after dry hole in the

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mid-1960s,ARCO moved a rig ally did say he was convinced north and prepared to drill a there were 40 billion barrels well in the Prudhoe Bay struc- of oil at Prudhoe Bay. ture. (To date, the Prudhoe Bay “Once we asked the gover- area has yielded more than 15 nor to put up those tracts, to billion barrels of crude and me that was a clear signal,” still holds at least another 5 Jamison recalled in a recent billion barrels, plus billions interview.“You don’t renege more in heavy oil and about on that obligation.Though it 30 trillion cubic feet of natural wasn’t a legal obligation, it gas.) was a moral one.” “I’ve often wondered with For Hickel, the next brush clairvoyance like that why with Prudhoe Bay’s fate came Wally stuck with politics,” when he visited the discovery Jamison quipped. well site in the spring of 1968. Hickel said Prudhoe Bay “Our first visitor was Alaska not only changed things in Gov.Walter J. Hickel, who was accompanied by (then Natural Alaska and America, the oil Resources Commissioner) Phil field also changed things in Holdsworth, (Oil & Gas the world. Director) Roscoe Bell and These days the former gov- (state geologist) Tom Marshall, ernor says he often finds him- and we had a group of self at odds with the oil indus- Humble Oil managers along,” try.He says company execu- Jamison recalled.“It was early tives have a responsibility to May 1967 and breakup was in their shareholders, but “those full tide.We had to shut down who helped make this state the rig that day.I can verify are dedicated to Alaska first.” that Wally,standing there in Adds Hickel:“It’s been an melting slush and water, actu- exciting ride.” ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 63 BP’s trail to Prudhoe Bay

Petroleum News British Petroleum drilled hile its drilling program in the Put River No. 1, its own Wfoothills was under way,BP and Prudhoe Bay confirmation Sinclair carried on surveying to the north well, during the winter of 1968-1969 and announced along the coastal plain of the North Slope. a discovery March 13, 1969. These were all seismic surveys, for there were no rocks or outcrops available for geological examination. (ALASKA) INC. BP EXPLORATION The U.S. Navy had established that oil- bearing sands existed at Point Barrow,but the question was, did they continue all along the coast? In 1963 a brilliant young geologist, Jim But both were good prospects and in especially Richfield Oil Co., Humble Oil Spence, came out to BP’s Los Angeles September 1964, BP approached the Alaska Co.,Atlantic Refining Co. and Pan office as chief geologist for the Alaska government, requesting that all the state American, had begun to take notice of BP operation. Using seismic results from sur- selected lands covering Colville and and Sinclair’s efforts on the North Slope. veys in the winter of 1963-64, Spence and Prudhoe be put up for competitive bid- They had all carried out geophysical sur- the exploration team were able to define ding. In December 1964, the state decided veys of their own in the area. for the first time two arches on the coast, to place half of the requested leases on the an enormous buried dome near the auction block and chose Colville instead of Sinclair bows out Colville River Delta and a smaller faulted Prudhoe Bay for the honor. Just before the Prudhoe lease sale, structure at Prudhoe Bay,further to the In July 1965, while BP was making Sinclair decided to withdraw from the pro- east. It was felt that Prudhoe was more plans to bring a Canadian rig across from ject.The company had never favored the likely to contain oil than Colville because Umiat to drill at Colville, the state put up North Slope program, but had been per- of a tilt and then a reverse tilt, which had the first acreage at Prudhoe Bay for leas- suaded by BP’s better-than-average record led to the oil migrating eastwards. ing. By this time, the American companies, of oil discovery. 64 Harnessing a Giant: 40 Years at Prudhoe Bay

Without Sinclair’s support and despite a was able to pick up six more blocks for Mackenzie River route, which BP had pio- very limited budget, BP forged ahead on its $44,000 each, or an average of $17 an neered. No one had ever tried such a large own, bidding against the far greater acre. commercial shipment through the Bering resources of the American competitors. Straits, but the company believed it was Deciding there was a chance the oil-bear- BP finally gives up the only possible way. ing sands were thin on top and thicker on Shortly after the lease sale,ARCO’s Susie With only days notice, BP acquired a rig the flanks of the Prudhoe structure, the well came up dry,and a few weeks later, that had been drilling in Tyonek and had it British company spread its bids to include the second Colville well, being drilled by barged, along with 4,500 tons of related those leases which seemed to be around Union Oil, also proved to be a failure.At equipment, through the Beaufort Sea to the outer edge, acquiring 32 blocks for that point, even BP’s determination Foggy Island, a few miles east of Prudhoe $1.44 million, or an average of $16 an acre. wavered. Over five years, the company had Bay in mid-August, just before encroaching Richfield and Humble pursued the 40 drilled or invested in eight wells drilled on ice made the Beaufort Sea impassable. square miles on the crest, some of which the North Slope and spent $30 million they acquired for $93 dollars an acre, out- with nothing to show for its efforts. BP confirms Prudhoe Bay bidding BP’s $47 per acre, Mobil and The British company decided to cut its When winter freeze-up came in Phillip’s $12 per acre and a $6 per acre bid losses and leave the Slope. It stacked the November, BP unloaded the barges and from Atlantic Refining. drilling rig at Pingo Beach in preparation hauled the rig and other equipment to a In 1966, BP got another disappointment for shipment elsewhere, closed its offices site on the banks of the Putuligayuk River when it drilled another well on the crest in Anchorage and Los Angeles, disbanded five miles from the coast and three miles of the Colville structure and found only the staff and stored the scientific records it south of ARCO’s Prudhoe Bay State No. 1 small quantities of oil. had accumulated. discovery well. With dollars running short, BP sought A few months later in March 1968, BP geologist Geoff Larmanie told and found another partner in Union Oil ARCO announced its discovery at Prudhoe Crude Dreams author Jack Roderick that Co. and began drilling a second well, Bay.By June, the company had confirmed Put River No. 1 was designed to be locat- Kookpuk No. 1, on farmed-out acreage in its find seven miles to the southwest with ed outside the edge of the gas and in the the central part of the Colville. the Sag River State No. 1 well, using the oil leg of the Prudhoe Bay structure. Atlantic Refining, meanwhile, merged Canadian rig that BP had relinquished and “BP wanted to determine the thick- with Richfield Oil and regained a dominant stacked at Pingo Beach. ness of the Prudhoe column at Put River position on the North Slope.The newly Rejecting offers by ARCO to take over and to then use this information to re- formed company,still in partnership with all the Prudhoe acreage, BP decided to evaluate its seismic data,”Larmanie said. Humble, decided to go ahead with a previ- return to the Slope to carry out its own On March 13, 1969, BP made brief ously planned wildcat well between the drilling operations. It meant a frantic rush announcements in London and New York: Tooklik and Sagavanirktok rivers. Drilling to find a rig and assemble all the necessary “Oil had been discovered in porous sand- began in March 1966. equipment.With no roads to and on the stone below 8,000 feet,”with an oil-col- In January 1967, the State of Alaska held North Slope, there were only three possi- umn thickness greater than that at another competitive lease sale with 38,000 ble routes – to fly everything in from Prudhoe Bay. It was a major extension of acres of Prudhoe Bay tracts offered, com- Fairbanks, which was prohibitively expen- the Prudhoe Bay discovery, like the Sag pared with 403,000 acres in the 1965 lease sive; or to ship by barge along the River State No. 1 well. sale. Mackenzie River from Canada or by way of The announcement proved to be This time, both Sinclair and Union Oil the Aleutians and the Bering Straits. In extremely significant. BP had acquired declined an invitation from BP to join in either of the two sea routes there were enough leases in preceding years to lay the bidding, and the company once again only six weeks of summer when the pack claim to about 60 percent of the entire waded into the fray alone and with only a ice in the Artic Ocean melted enough to Prudhoe Bay oil field. $250,000 budget. By carefully spreading its allow the barges to reach the North Slope. After further drilling and analysis, BP bids and going for acreage where others It was too late in the year to use the announced six months later that an inde- were unlikely to offer competing bids, BP pendent review of eight of its Prudhoe Bay wells indicated that nearly 5 billion barrels of recoverable oil lay under its leases, valued at $15 billion (in 1969 dollars), excluding the cost of its production. The entire Prudhoe Bay field was estimated to contain 9.6 billion barrels of recoverable oil and 26 trillion cubic feet of natural gas, making it a super-giant field of Middle East proportions. With improved technology and additional investments, Prudhoe Bay’s recoverable oil reserve figure has climbed steadily over the past three decades and has been revised upward to exceed 13 billion barrels. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 65 Indelible imagery: 40 years at Prudhoe Bay

Photos by C.G. “Gil” Mull

Top: A tent camp and Bell G2 helicopter used by Richfield Oil Co. geologists in their search for oil on the North Slope during a mid-summer snowstorm.

Center left: Telegrams sent by Atlantic Richfield Co., informing Humble Oil Co. executives in Los Angeles of developments during the drilling of the Prudhoe Bay State No. 1 discovery well in late December 1967.

Center right: Geologists Bill Brosgé of the U.S. Geological Survey and Gar Pessel take a break beside a rocky stream in the foothills of the Brooks Mountain Range during field work in the 1960s.

Bottom left: The first Richfield Oil Co. seismic crew moves camp during the winter of December 1963. 66 Harnessing a Giant: 40 Years at Prudhoe Bay Indelible imagery: 40 years at Prudhoe Bay C.G. “GIL” MULL

The pilot of this Interior Airways C46 aircraft misjudged the thickness of the ice on No Luck Lake in the western Brooks Range in early June 1968. Though the air- line planned to return and fish out the plane, the exploration boom that followed the discovery of Prudhoe Bay so intensified the demand for air cargo services that the lake ice melted before the company could return to get the plane back onto the ice. BP EXPLORATION (ALASKA) INC. BP EXPLORATION STEVE MCCUTCHEON/STATE OF ALASKA ARCHIVES ALASKA OF STEVE MCCUTCHEON/STATE

Above: View of construction crew building a draw-down box while working indoors during construction of Pump Station 1 and trans-Alaska oil pipeline at Prudhoe Bay April 20, 1975. Center right: The fabrication of modules in Alaska for North Slope oil fields - an outgrowth of development at Prudhoe Bay — provided a significant stimulus to the state’s economy TRANS-ALASKA PIPELINE CONSTRUCTION COLLECTION, 1976-1977 TRANS-ALASKA PIPELINE CONSTRUCTION COLLECTION, 1976-1977 Left: A section of pipe is lowered into a ditch in the Brooks Mountain Range, about 175 miles south of Prudhoe Bay. Above: British Petroleum Board operator Jim Blythe communicates with the Trans-Alaska Pipeline System Operations Control Center in Valdez during the Prudhoe Bay production startup in 1977. Harnessing a Giant: 40 Years at Prudhoe Bay 67

P RUDHOE BAY CELEBRATING YEARS

EXTRAORDINARY PROSPECTS

Nearly a century ago, Alaskan’s discovered oil at Prudhoe Bay and worked in the frozen lands of the Arctic to develop the largest oil field in North America, providing a valuable contribution to the security of the U.S. petroleum supply.

ONGOING EXPLORATION

Alaska’s natural resources continue to provide opportunities for continued development and AIC is proud to provide the equipment, services, design and engineering support for ongoing exploration and operations.

AICLLC.COM 68 Harnessing a Giant: 40 Years at Prudhoe Bay Talk far from cheap in early days Once laid-back geologists wrestled with ways to keep exploration communications secure during, after Prudhoe Bay field discovery

By Rose Ragsdale For Petroleum News A seismic exploration camp on Alaska’s North Slope in efore the Prudhoe Bay oil field was 1969, while exploratory drilling continues nearby. B discovered in 1968, communications on the North Slope was a hit and miss proposition, say geologists who worked on projects there. “There were no phone links and our only communication with the office was by single side band radio, on an open public frequency — which meant that anyone could listen to what we were saying. Plus, depending upon the sunspot activity, there were times in which radio signals just were not good enough to get a message through,”said C.G.“Gil” Mull, who served as well-site geologist for Humble Oil Co. on the Prudhoe Bay State No. 1 well. In the beginning, Mull said, security and secrecy was not a particularly high priority. COLLECTION, RICHFIELD COMPANY ARCHIVES ATLANTIC ALASKA FAIRBANKS UNIVERSITY OF On the Susie well and during the first months of drilling at Prudhoe Bay,“the drilling reports were sent most of the time in just plain language, although occasionally, we would try to use a simple code system. Each morning we Because it was a really remote location, no report from the rig meant that things would send, or try to send, to both ARCO and management in town realized that were probably going OK at the drill site and Humble offices the morning drilling communications were difficult, they gen- and the radio signals were out. report from the company tool pusher, the erally relied on the expertise of the com- “ They definitely did not try to run geological report with sample descrip- pany tool pusher and well site geologists things from the office,”he said. tions from the well site geologists, and to run things, and generally figured that “Sometimes, when we could not get something about what the plans were. through on the single side band radio, there was a ham radio operator in camp who could raise someone on one of the short-wave frequencies that he operated on.Thus, on some occasions, the offices got collect phone calls from strangers somewhere Outside, from whoever the ham operator could raise, relaying our morning reports,”Mull recalled.

Discovery brings whirlwind All this changed virtually overnight with the discovery at Prudhoe Bay. After the first successful drill stem tests when everyone began to realize for certain that it was not going to be a rou- Harnessing a Giant: 40 Years at Prudhoe Bay 69 tine well, nothing of any consequence quencies. So, as we were getting closer to went out over the radio. the target at Put River No. 1, we were From then on, each morning right sending information out in sealed bags — after breakfast, there was a plane warmed airlifted, hand-carried stuff.” up, and one or another of the well-site Then BP came up with another way to geologists hopped aboard the plane to communicate.Two Welsh-speaking geolo- travel to the nearest phone, in either gists on the company’s exploration team, Fairbanks or Barrow, depending on the one based at the drilling rig and the weather, to phone in the daily drilling other at the Anchorage office, began to and geological reports to the district exchange messages in the lyrical speech offices of both ARCO and Humble, and to of their native Wales. mail in a hard copy of the reports. “Welshmen Harvey Jones and Ron “As a result, I, or one of the other well Walters conducted a conversation in

site geologists, had a daily round trip their native language transferring all the WHALEY, WIEN COLLECTION,ARCHIVES ALASKA OF STATE commute of close to a thousand miles, Put River information from the rig to A sign tells the story of the Sag River State No. 1 well just to make a couple phone calls and Anchorage,”Larmanie recalled. ◆ drilled by Atlantic Richfield Co. and Humble Oil Co. in mail two or three letters,”Mull said. 1968 that confirmed the Prudhoe Bay oil field discovery. “Normally, we would be back to the rig by early afternoon and back to running samples.This was the normal routine, unless something special was going on, such as running wire line logs, cutting cores or testing, in which case the well site geologist would not want to be away from the rig.” This system continued throughout the drilling of the Sag River No. 1 confirmation well. Finally, a telephone relay system was set up, and from then on, messages went back and forth by a secure telephone relay system.And, of course with this, the independence of the crews at the well site began to diminish considerably as management in town assumed much greater control of operations, Mull added.

BP taps linguistic diversity At BP,British geologists borrowed a page from the annals of World War II history and set up a system of code-talking to maintain secure communications to and from its exploration well site. BP geologist Geoff Larmanie told Crude Dreams author Jack Roderick about the unusual method the British oil company devised to solve the communications conundrum in the earliest days after the Prudhoe Bay oil field discovery. “As drilling continued throughout the winter, communications security was a problem. People at the well had to communicate with company officials in Anchorage, but without others listening in,”Larmanie said. “Everyone was sharing these terrible radio frequencies.We had a very good radio man in London who knew the international system … frequencies, the VHF and rural problems, but we didn’t have (Federal Communications Commission) authority to use the fre- 70 Harnessing a Giant: 40 Years at Prudhoe Bay Innovator from the first Richfield tackled challenges that it faced exploring for petroleum in Alaska by using latest technology to get the job done

By C.G.“Gil” Mull For Petroleum News

hinking about the legacy of Richfield T Oil Co., it seems to me that it was char- C. G. “GIL” MULL acterized by a tradition of innovation in Alaska. For example, the discovery well at Swanson River in 1957 was drilled on an anticline that was discovered by a seismic survey — but a survey that was done with seismic equipment that was transported by helicopter. I don’t know for certain, but I have a hunch that that might have been the first time that a seismic survey was conducted in Alaska using a helicopter to move equipment to otherwise inaccessible areas.The GIL MULL area selected for the seis- A July 23, 1957 news article with the headline “Richfield Hits Oil” in the Anchorage Daily Times pro- claims the discovery of the Swanson River oil field on the Kenai Peninsula that kicked off the Alaska mic survey was based on some cool deduc- oil boom, over 10 years before the Prudhoe Bay discovery. tions made by Richfield geologist Frank Tolman from aerial photos of the Kenai in Alaska before, but at the time … it was tered shots to provide strike and dip con- Lowlands that showed what appeared to pretty bold to go out to expend the money trol and did not have the sort of conven- be an anomalous stream drainage pattern. to run a seismic survey by helicopter based tional lines that would normally have been This pattern suggested the presence of a on not much more than photo geology and shot before a well was programmed.The topographic high area. In the early days in the knowledge that there were oil seeps seismic survey confirmed Tolman’s deduc- California, a number of oil fields had been clear on the other side of Cook Inlet. tion, and the first well drilled on the high found on anticlines that formed topograph- In addition, my understanding is that was the Swanson River discovery.In other ic high areas. I suspect that other people the total seismic survey was an extremely words, it was a pretty bold step on the part had used aerial photographs to do geology loose survey that consisted only of scat- of Richfield management to drill a well on

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Workers flared the first gas flow from the Ivishak (Sadlerochit) Formation reservoir during Drill Stem Test No. 2 of the

Prudhoe Bay State No. 1 well on Dec. 27, C. G. “GIL” MULL 1967. No oil flowed to the surface during the test, but natural gas flowed from the well with a rumble and roar that sounded like a jet plane overhead.

Another definite first was the mobilization of an entire drilling rig and camp by air. No one had ever thought of doing all that by air before. such meager data — most companies would not have been so bold. But it worked. An offshore well that Richfield drilled in the early 1960s at Wide Bay on the Alaska Peninsula was drilled from a platform on pilings. I am sure this also was a first for Alaska — also using a technique developed in California many years back. Another definite first was the mobilization of an entire drilling rig and camp by air. No one had ever thought of doing all that by air before.All the previous drilling rigs on the North Slope were taken up by barge and moved cross country by land during the winter. Flying the rig up to the North Slope was a Richfield innovation that took a fair amount of doing, because first the permission to use a C-130 Hercules had to be obtained from the Defense Department — it had previously been strictly a military plane. So the whole operation went in by air to Sagwon in something over 80 trips from Fairbanks using the C-130 leased from Lockheed, and some other cargo planes. Another aspect of Richfield’s successful operations was its reliance on the recommendations of its younger employees. It was not overloaded with layers of management, thus, the opinions and recommendations from the working stiffs in the trench- es often went straight to the top as was evident in the use Harry Jamison made of the information from the surface geological party. ◆ 72 Harnessing a Giant: 40 Years at Prudhoe Bay

Two Alaska Airlines C-130 Hercules cargo planes at the Prudhoe Bay No. 1 well site during massive mobilization of equipment in late March 1968. C. G. “GIL” MULL

Oil rush lifts aviation fortunes Exploration boom takes off with history-making airlifts to North Slope

By Rose Ragsdale For Petroleum News

he immense size of the North Slope T and its challenging terrain and unchart- C. G. “GIL” MULL ed waters left the oil hunters with but two options: learn to fly or find a good pilot. Wien Alaska Airlines, Interior Airways, Alaska Airlines and Economy Rotor Aids,predecessor to Era Aviation, among others eagerly accepted missions from exploration teams, geologists and scouts.A thriving aviation service industry developed, equipped with everything from Piper Cubs, Cessna 180s and Widgeons to World War II-era C46s and Hercules C-130s and helicopters. Jim Magoffin, founder of Interior Oil companies used various aircraft in the early Airways, energetically whittled a niche for days of summer field work to ferry personnel his company in the Arctic oil fields by scout- and supplies across the North Slope; this aircraft ing out a strategic location on the banks of is an amphibious DeHavilland Widgeon at Elusive the Sagavanirktok River and setting up a Lake in the Brooks Range. prosperous airport called Sag No. 1.The airport, adopting the name Sagwon from Texas the challenge of moving a 2,000-ton drilling been used by Richfield in March 1965 to and Oklahoma pilots slurring the name, rig and necessary equipment and supplies transport 18 loads of cargo to Sagwon, a became a self-supporting service center in over difficult terrain to a remote and deso- gravel airstrip on the North Slope about 80 the Arctic and served a never-ending stream late place more than 50 miles from the miles south of the coastline.That job had of aircraft. Interior Airways flourished in a nearest navigable water. included moving one 24-ton D-8 Caterpillar market heavily dominated by Wien. Mo Benson, general manager of produc- with a blade. tion operations for Richfield Oil Co. at the The price wasn’t cheap. Richfield would ARCO drafts C-130 time, looked at all options before deciding pay $100,000 to use the aircraft for exactly The Susie No.1 well, the famous dry hole that the best approach would be to fly the 21 days, beginning Jan. 21, 1966. No exten- that Richfield completed before turning to rig to the location. sions would be allowed, no matter what the the Prudhoe Bay structure, has another There was only one drawback. Only one reason. Richfield also had to agree to cover often overlooked distinction. It was the first airplane could fly the rig intact to the slope the cost of sending Alaska Airlines pilots to wildcat well where the industry took on – the Lockheed Hercules C-130 – that had the African country then called Rhodesia, Harnessing a Giant: 40 Years at Prudhoe Bay 73 74 Harnessing a Giant: 40 Years at Prudhoe Bay where the Herc was hauling copper on a demonstration basis, to get type-rated. Top: One of the most unusual aircraft mobilized during the BP chartered C-130s, too exploration boom of 1968 and 1969 was this Skycrane heli- The Lockheed Hercules C-130 soon copter, shown here lifting a load C. G. “GIL” MULL gained a reputation for being one of the at the Prudhoe Bay well site. Tragically, it crashed a few most highly desired planes for use on weeks later, killing its crew. Alaska’s North Slope. By the end of 1968, there were 11 Bottom: A large number of vari- Lockheed Hercules C-130 aircraft operating ous types of aircraft were pulled into service during the explo- from Fairbanks to the North Slope, routinely ration boom on the North Slope carrying 24-ton loads at a cost of $4,500 per that followed the discovery of trip. the Prudhoe Bay oil field. None BP called on the C-130 transport planes was more vital to that effort than the history-making C-130 to fly in drilling rigs to the Slope for its early Hercules cargo planes like this drilling at Prudhoe Bay.The airlift involved one flown by Alaska Airlines. five chartered C-130s, each costing $250,000 a month, plus three Super Constellation aircraft. John Matyr, then general manager and vice president of BP Alaska,described the difficulty of these early logistics:“I recall those great Hercules thundering through the winter night and the great flurries of snow whirling up along the lights burning at the side of the ice runway,”he said.“It off his engine as he came to the end of his was the most difficult operation that I’ve taxiing. It took three days to get it started ever been associated with,”adds Matyr,a again. veteran of Kuwait, New Guinea,Trinidad In all, aircraft transported more than and Libya oil fields as well as gold mines in C. G. “GIL” MULL 135,000 tons of freight to the Slope during southern India. a 12-month period and shuttled some 50,000 passengers to more than 20 differ- Aviation heyday ent drilling sites.With not enough aircraft to The Fairbanks airport swarmed with an go around, some oil companies had to char- amazing variety of planes, including Dakotas ter their own, mostly DC-7s. and 737s, as one of the biggest civilian air- On the North Slope, the most expensive lifts in history got under way. operation was ARCO’s use of a giant Harsh winter conditions made the going One inexperienced pilot, who flew a Sikorsky Skycrane helicopter to move entire rough for many,yet the planes kept flying light plane from Fairbanks during sub-zero rigs, broken down into 20-ton loads from and the work got done. temperatures, was foolish enough to switch one site to the next. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 75 C. G. “GIL” MULL

Picture of field emerges Long summer of drilling in 1969 reveals impressive, complex subsurface geology

Petroleum News The whole Prudhoe Bay field lies within an area Lisburne limestone, up to 1,700 feet thick below a depth of 8,758 feet s drilling gathered pace roughly 45 miles long, from west to east, along and covering 181,750 acres. through the summer of 1969, A the coast and 18 miles wide. It is one of a series And still farther to the northeast most of it within a 10-mile radius of broad anticlines underlying the North Slope is the deepest reservoir in the area of Prudhoe Bay, the oil companies and known collectively as the Barrow Arch. — the Kekiktuk Conglomerate, began to build up a clearer geolog- which forms the reservoir in the ical picture of what they had west of the western end of the Prudhoe Endicott oil field. found. Bay field. It is up to 800 feet thick, below Geologists subsequently identified The whole Prudhoe Bay field lies with- a depth of 6,765 feet, and extends over other crude reservoirs in roughly the in an area roughly 45 miles long, from an area of about 128,000 acres.The same area, including the vast, much shal- west to east, along the coast and 18 miles Kuparuk field produces about 150,000 lower heavy oil pools of West Sak and wide. It is one of a series of broad anti- barrels a day and remains the second- Ugnu. clines underlying the North Slope and largest oil field in North America. Of the 23 wells that had been com- known collectively as the Barrow Arch. Next is the most important and pleted by the end of the summer of 1969, There are four main oil and gas bearing biggest formation, the multi-pool Prudhoe nine had been drilled by BP,seven by reservoirs in formations of lower Bay group, formed in undulating sand- ARCO-Humble, four by Mobil-Phillips, two Cretaceous to Mississippian ages, stone up to 600 feet thick below a depth by Standard Oil of California and one by between 120 million to 220 million to of 8,110 feet, and covering some 368,640 Hamilton Brothers. Only two failed to find about 350 million years old that partly acres.Today, this field has produced more any oil or gas — one each drilled by BP underlie each other and are sealed by a than 13 billion barrels of oil and ultimate and ARCO — though not all would neces- stratigraphic unconformity that is overlain recovery is estimated to exceed 15 billion sarily prove to be commercial. Seven by a cap-rock plunging from west to east. barrels. wells encountered two of the reservoirs The shallowest is the Kuparuk River Slightly to the east is a deeper reser- and one, Socal’s Kavearak Point wildcat, Formation, some six miles to the north- voir, formed in what has been classified as found oil in all three reservoirs. ◆ 76 Harnessing a Giant: 40 Years at Prudhoe Bay A complete array of services for Alaska

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©2008 M-I L.L.C. All rights reserved. *Mark of M-I L.L.C. Alaskans remember Prudhoe Bay By Nancy Pounds Most Alaskans don’t remember what Alaska’s economy looked like before the discovery and development of Prudhoe Bay. Only 14 percent of about 670,000 Alaskans today lived in the state in 1968, the year of the Prudhoe Bay discovery, according to Scott Goldsmith, economics professor at the University of Alaska Anchorage’s Institute of Social and Economic Research. So nearly nine out of every 10 residents today know little about Alaska prior to major development on the North Slope, he said. Goldsmith compared 1968 and 2008 in a recent report called, “How North Slope oil has transformed Alaska’s economy.” A few longtime Alaskans, participants and decision-makers during Alaska’s major economic changes, recently recalled events of the era.

Vic Fischer The most important and demographical aspects changed, he aspect was the scale of said. An economic analysis in 1970 or 1971 development that What would Alaska be like without oil — before construction of the pipeline — occurred on the North today? The state would have a much smaller showed the possible financial strength of Slope because of economy with fewer people, Fischer said. the work.Three economists from UAA’s Prudhoe Bay.The “It would be a different Alaska,”he said. ISER compiled the report, and their predic- pipeline report project- There would be no Permanent Fund div- tions were fulfilled and even eclipsed. ed the future revenue idend, which plays a role in the economy It was a first look at the “phenomenal stream the state would and helps lower-income Alaskans,he said. amounts of money the state was about to receive, but could not VIC FISCHER Also, the dividend helps Alaskans psycholog- get because of the pipeline,”remembered factor in the way oil prices soared in subse- ically — people get to share in the state’s oil Vic Fischer, one of the report authors. He quent years, Fischer said. wealth, he said. served in the territorial Legislature from Fischer had compiled a report in 1959, Editor’s Note:Victor Fischer has studied 1957 to 1959 and was elected to the State the year of statehood, concluding that state and taken part in Alaska government and Senate in 1980 and 1982. government services would exceed state politics for over 50 years. Educated at the The discovery at Prudhoe Bay was “a income at then-current levels.“We became University of Wisconsin, MIT and Harvard great day” for Alaska,he said in a recent a state among great euphoria of great University, Fischer was a territorial legisla- interview things going to happen,”he said. tor, a delegate to Alaska’s constitutional “The Prudhoe Bay discovery was very The 1964 Good Friday earthquake in convention, and later a state senator.A for- exciting event for everyone in Alaska,” Anchorage brought a temporary surge of mer director of the University of Alaska Fischer said.“It proved we would have a federal dollars, but state government bud- Institute for Social and Economic new resource coming on line that would gets were strained. Research, he is currently engaged in state provide significant economic progress for As Prudhoe Bay was developed, policy, local government, and Alaska- the state.” Anchorage’s population grew,and political Russia issues. 78 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 79 The climb to peak production

Giant cranes, used to unload cargo at ARCO’s East Dock at Prudhoe Bay, stand like sentinels during the long, cold winter of 1969-70. ATLANTIC RICHFIELD COMPANY COLLECTION, RICHFIELD COMPANY ARCHIVES ATLANTIC ALASKA OF STATE

BP, ARCO prepare to tame an elephant Initial development of the Prudhoe Bay field relies on seasoned workers, innovative logistics and historic equipment sealifts

Petroleum News “I got off the plane at Deadhorse and it was about minus 20 degrees (Fahrenheit) s the dust settled after the Prudhoe with a 30-mile-per-hour wind.A guy name Bay oil field was discovered in 1968, BILL SIMMS A Swede Swenson, a drilling foreman, picked BP began development drilling, using me up at the airport in a yellow station Nabors 18-E and Brinkerhoff Rig 36. wagon. I remember thinking to myself, Everett Potter, then a drilling consultant “‘what have you gone and done now.’” for BP,said rig technology has come a long BP would operate the western side of way since those days. the Prudhoe Bay field, or western operating “We used to tear the rigs down to the area, or WOA, and ARCO would operate the ground to move them by truck from one eastern side, or EOA.The plan called for the well location to another,”he recalled.“A rig six facilities to handle up to 1.8 million bar- move could take as long as seven days, rels per day of oil. especially during the winter months. Now, some of the rigs can be moved in half a Unprecedented sealift shipments day,and wheel-mounted rigs can simply be The first sealift to Prudhoe Bay occurred rolled to other locations.” in the summer of 1969, when about 70,000 Modern cantilevered rigs can be moved tons of stores and equipment were barged from one well location on a pad to another from Seattle.The 1970 barge sealift was the location in just a matter of hours. Bottom: A Christmas tree on Prudhoe Bay largest in the North Slope’s history — Brian Rose, a drilling superintendent for State No. 1 in January 1969, nearly one when 70 barges containing more than BP,joined the company in 1974 and year after the giant oil field’s discovery. 175,000 tons of equipment journeyed became drilling foreman on the rigs. 80 Harnessing a Giant: 40 Years at Prudhoe Bay north through difficult ice conditions. Massive capital investment in the ’70s installed, expansions to those facilities were From 1974 on, sealift shipments to By 1975, two of BP’s gathering centers already being designed by BP in San Prudhoe Bay would contain oil production were in place — each capable of handling Francisco. modules, buildings, modularized camps and about 300,000 barrels of oil per day. During the mid-1970s, when major other support facilities from the U.S.West During this period, a gravel “spine”road capital expansions reached a crescendo Coast.The barge shipments were managed was built from east to west through the on both sides of the Prudhoe Bay field, by Seattle-based Crowley Maritime Inc. heart of the oil field, using gravel from area-wide population peaked at about The first sealift also brought large mod- approved material sites. Later, extensions 8,000. ules for BP’s three gathering centers, which and fingers off this road would access the BP’s first camp, Mukluk Camp, consist- would separate gas and water from pro- many gravel “pads”from which developed of a few trailer units.The company’s duced oil;ARCO would have three similar ment wells would be drilled. Pads were permanent base camp was shipped in facilities, called flow stations, on its side of assigned letters on the western or BP-Sohio modular form from Seattle to Prudhoe the field. side of the oil field and numbers on the Bay in mid-1973 on eight barges.The fol- eastern, or ARCO side. lowing year, the first phase of the Central While initial facilities were being Power Station arrived, which consisted of two turbine generators and a control rooms.The Prudhoe Unit agreed to locate it on the western side of the field — making it a BP-Sohio-run facility. Later sealift shipments would bring the other three phases, which included five more Frame-5 turbine generators, which were fueled by natural gas produced in the Prudhoe Bay field.Today,the CPS has a maximum output capacity of 160 megawatts, making it the second-largest single power station in Alaska. The CPS provides all power for Prudhoe Unit oil production operations. Diesel generators throughout the field provide a back- up to provide life support, such as heating and emergency lights. According to Jim Barrett, a supervisor at the station in the mid-1970s, the facility put out about two megawatts during its first year of operation. In 1976, the three-story BP-Sohio center, sometimes called the BP Hilton, was expanded from 90,000 to 137,400 square feet, providing living and working room to accommodate about 264 people. BP also built two 500-worker camps for contractors developing the field. Bill Lorenz, a BP North Slope construction veteran of about 25 years, said when Prudhoe facilities were first being installed, he couldn’t foresee what they would eventually look like or how big they would become. “Most of the production modules and buildings were designed by BP and Ralph M. Parsons Inc. of Pasadena, and came from the U.S.West Coast as increments,” he said.“They were like jigsaw pieces of a bigger whole that we never saw until it was completed.” “The initial gathering centers were almost ‘pass-through’ facilities compared to today’s multi-faceted complexes, and about one-third the size,”recalls Fritz Wiese, who spent many years on the North Slope as BP production manager. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 81 Engineer recalls Prudhoe Bay early days

Oil companies relied on cadre of talented individuals and contractors to design and build unprecedented Arctic infrastructure

By Rose Ragsdale son and other uncertainties that stopped.We couldn’t go any fur- For Petroleum News construction often outpaced ther,”he said. design. Bell made a phone call to his rom the start, developing the “We’d finish a section of boss, Hoyt Jarvis, and was told,“I F Prudhoe Bay oil field was a gargantu- roadway and the engineers FORREST CRANE don’t care if you have to spend a an task. wouldn’t have designs ready for million dollars, get those mod- In the words of O.C. Simpson,“It was the next section,”he recalled. ules off that barge. a time of impossible demands and incred- “We would build a mile of road, “The ice was 6 feet thick.We ible feats.” praying our work would be used a ditch witch to cut out a But Atlantic Richfield Co. and British close to the designs, and a week BOB BELL 10-foot section of the ice at a Petroleum, the two oil companies desig- later, we’d get the drawings.” time.As soon as we’d get a section of ice nated to operate North America’s largest An especially harrowing point came out, we would dump gravel in the hole oil field, elected to start small, hiring a during the first phase of constructing the we made. In this way, we continued to few very capable and clever people to West Dock causeway, while a barge wait- build the causeway,”Bell said.“We oversee the effort. ed to unload production modules for the worked through Christmas Day.” Bob Bell was one such individual. field, Bell remembered. The prospect of the work continuing Hired as a facility engineer by ARCO in “When we put that last gravel in, two through Christmas upset the workers 1974, Bell said he took the job to help days later the ice came back.We were keep his struggling surveying business see BELL page 83 afloat.While his partner, John Herring, continued to serve their clients, Bell worked for ARCO and split his salary with Herring. Bell was one of three people who comprised the entire Prudhoe Bay facilities group for the company. “Joe Dan Ash, a document control clerk and I were in charge of constructing the Prudhoe Bay facilities for ARCO,” recalled Bell in a recent interview. Bell worked directly with the big engineering firms that designed the field, Ralph M. Parsons and Bechtel Inc., and hired construction contractors to build the facilities and infrastructure.These contractors included such firms as Alaska General, Frontier Construction, Haskell Amelco, S.S. Muellins and H.C. Price. Among the memorable early projects that Bell’s group tackled: Installing multi- plates in the Put River; building roads across the field; and constructing the West Dock causeway.The causeway is a gravel embankment that juts into the Beaufort Sea and enables the off-loading of cargo that otherwise could not be delivered to the Arctic oil field. Bell said the pace of the work was so pressured in the early days of development by weather, the short summer sea- 82 Harnessing a Giant: 40 Years at Prudhoe Bay Owners work to unitize Prudhoe Bay State-approved agreement creates participating areas for oil, gas; divides field

Petroleum News How to value the gas became a Valuing natural gas he State of Alaska required that the big issue in the lengthy, complex Many of ARCO’s and Exxon’s leases T Prudhoe Bay oil field be developed unit negotiations. were over the gas cap, in the northeast, as a unit, and not individually by the while most of BP’s leases were over the companies holding leases.The 16 initial most of the natural gas is located, the gas oil rim.As a consequence,ARCO and owners agreed to two operators carrying cap, was not directly above the part of Exxon had most of the gas with BP hav- out the development: BP-Sohio for the the reservoir where the oil was located. ing more than half of the oil.This would- western side and ARCO the eastern side. The gas cap was partially offset, toward n’t have posed a problem if the gas could The agreement was very unusual the northeast, compared to the lower have been immediately marketed so that because it formed two separate partici- part of the reservoir that held the oil. a commercial value would be put on the pating areas within the Prudhoe field, In many reservoirs, the gas cap would gas along with the oil. But because it was one for oil and one for gas.Also, two be directly above the oil pool, so leases not economical to build a pipeline to companies being chosen to be field oper- covering a field would have similar carry the gas to market, no commercial ators was an unusual arrangement. shares of the gas and oil reserves. But sales of gas were possible and the parties Ordinarily, one company chosen as field because Prudhoe’s gas was not directly could not agree upon a value for the gas. operator would be considered the most above the oil reservoir, and because the How to value the gas became a big efficient procedure. reservoir was so large, the location of the issue in the lengthy, complex unit negotia- The separate gas and oil rim partici- various lease holdings resulted in widely tions. John Reeder, a former chief counsel pating areas came about because the differing ownership percentages of the with BP,now retired, recalls that the deci- gas and the oil among the field’s owners. upper portion of the reservoir where see UNITIZATION page 84

Congratulations, Alaska, for 40 years of production from Prudhoe Bay. The Division of Oil and Gas looks forward to another 40 years of robust exploration and development to bring the vast oil and gas resources of the North Slope to market.

Division of Oil and Gas Alaska Department of Natural Resources 550 West 7th Avenue, Suite 1100 Anchorage, Alaska 99501-3560 www.dog.dnr.state.ak.us/oil

“Managing Alaskan’s Oil and Gas Lands” Harnessing a Giant: 40 Years at Prudhoe Bay 83

continued from page 81 C.G. “Gil” Mull examines Christmas trees on production wells at Prudhoe Bay in the BELL early days of the field’s development. union, and just before the holiday, Bell said he got a call from the union’s business agent, saying COURTESY OF GIL MULL COURTESY he wanted to visit the North Slope to inspect the trucks that ARCO’s contractors were using. Bell said he understood that this was a ploy for the union to get the workers off on Christmas and Christmas Eve by finding something wrong with the truck fleet. Bell said he told Tennessee Miller of Frontier about the proposed visit, and Miller volunteered to give the business agent a tour. Then Bell told Miller that someone would need to pick the business agent up at the local airport. Miller replied,“I’m the guy who will show them around, but I ain’t no taxicab driver.” After that, Bell said he heard nothing else from the union about shutting down for Christmas. During his tenure with ARCO, Bell said his group supervised the building of the main construction camp, all the production pads in the field, bridges over the Sag River and most of the roads. Bell left ARCO in 1976, after two years, to concentrate on his business.Today, he is sole proprietor of Bell & Associates, one of the largest survey firms in Alaska with 100 employees. ◆

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www.slb.com/westerngeco WesternGeco ...... covering Alaska for over 50 years 84 Harnessing a Giant: 40 Years at Prudhoe Bay continued from page 82 the oil interest owners. at the time BP and Sohio felt they might As these liquids were produced and not have adequate staff available in the UNITIZATION shipped to markets along with crude oil United States to operate a very large field through the trans-Alaska pipeline, the unit like Prudhoe on their own. sion to form two participating areas, one agreement provided the formula as to BP had experience running large fields solely for gas, effectively put the decision how revenues and cost would be allocat- in the Middle East, but at that time BP off to the future, when a gas pipeline or ed among the oil and gas cap owners. was heavily committed to North Sea some other way of marketing the gas The decision to have two operating development. Sohio was primarily a mar- would be available. companies was made partly for the same keting company, although the company It also allowed the costs and benefits reason, so that the major gas cap owners, did have a small amount of U.S. produc- of production to be allocated among the ARCO and Exxon, would be, in essence, tion. Having two field operators was a oil and gas rim owners. For example, represented by ARCO as one of the field way to bring the full range of expertise under the unit agreement, natural conden- operators. among the major owners into the operat- sate — natural gas that became liquid at ing organizations. the surface — was allocated to gas cap BP wanted adequate manpower Reeder feels the arrangement of sepa- owners. But because it was produced rate oil and gas participating areas with the oil, most costs were borne by Another reason, Reeder said, was that worked well in the early years of the field’s life. But as Prudhoe Bay entered its more mature phase, with oil production declining and more liquid hydrocarbons being produced as condensate or natural gas liquids, it became more efficient to finally unify the gas and oil under a common Building a better Alaska operation.This is why the alignment of BP,Phillips and Exxon interests in the Prudhoe field made sense. George Abraham, a retired BP executive with more than 30 years oil industry experience, was among a small group who worked on the Prudhoe Bay Unit Operating Agreement. Others included John Reeder, David Lybarger, David Pritchard, George N. Nelson, David Walker, Richard Newton and Glen Taylor. “The basic reason for ‘unitizing’the Prudhoe field was to optimize recovery With a network of 24,000 employees, CH2M HILL and equitably divide costs among work- delivers local projects around the world—helping our oil ing interest owners and avoid duplication & gas clients by engineering, procuring, and managing of facilities,”Abraham recalled.“By limiting construction, maintenance, and operations for new, surface facilities you would also minimize revamped, and expanded facilities and systems. possible environmental impacts.” ASA N Our global leadership in program management is The document covered how interest CH2M HILL provides safe recognized around the world—ranking us at the top owners would divide expenses and how and innovative solutions for transportation, water, and all major infrastructure oil produced would be shared in propor- to help you manage industries, in addition to our oil & gas industry tion to each company’s equity interest in programs and deliver projects in all major expertise. Our program management work includes the the field.Abraham said the agreement was energy segments: expansion of the Panama Canal, the upgrade of Mumbai the most complex document he ever s Upstream Oil & Gas International Airport, the development of oil fields in worked on. s Pipelines & Terminals Abu Dhabi, and the modernization and expansion of a “We started in 1975 but made the s Gasification major refinery in Mexico. In Alaska, our work ranges biggest push from January to April 1977, s Oil Shale from truckable and sealift modular construction, O&M, prior to field startup.We held our 15- s Oil Sands s Petrochemicals and engineering services for our North Slope oil and hour, seven-day-a-week marathon sessions s Chemicals gas clients to expanding the landing strip and terminal in San Francisco. s Oil Refining on Unalaska Island. We are helping to build a better “As far as I know, the Prudhoe Unit s Mining world—and we are ready to take on the next big project was the largest oil field ever unitized,”he s Renewables to build a better Alaska. s Water added.“We had 16 interest owners s GHG Management involved.The sheer size of the Prudhoe The Team That Delivers® field and the allocation of reserves in the ch2mhill.com/energy oil rim/gas cap made the task more diffi-

EY052008001MKT cult.We finally ended up with two vol- © 2008 CH2M HILL umes containing 1,200 pages.” ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 85 Oilfield veteran led construction Prudhoe Bay’s first North Slope coordinator remembers challenges of building field’s petroleum production, processing facilities

By Rose Ragsdale Kelly reported for duty at North For Petroleum News America’s largest oil field in hen Atlantic Richfield Co. took on January 1969, just six months after Wthe task of building production facil- the Prudhoe Bay discovery had ities to process the billions of barrels of oil been confirmed. Though he had it discovered at Prudhoe Bay,the Los Angeles-based major set out to recruit the OF LANDON KELLY COURTESY spent 20 years drilling oil wells best facilities engineers it could find. and building and operating oil- That search brought to the company’s field production and distribution attention Landon Kelly,an oilfield services veteran who had left ARCO a few years ear- facilities from Canada to the Gulf lier to run his own consulting business in of Mexico, Kelly had zero experi- the Rocky Mountains before joining a part- ence working in the Arctic, one of ner to design and build offshore platforms Landon Kelly, one of Atlantic Richfield Co.’s first the harshest and most remote in Cook Inlet. North Slope coordinators, and Prudhoe Bay well Kelly reported for duty at North superintendent Bill Congdon, right, discuss the environments in the world. America’s largest oil field in January 1969, company’s early progress in developing the giant just six months after the Prudhoe Bay dis- oil field with a visiting ARCO board member, PepsiCo co-founder and CEO Don Kendall. covery had been confirmed.Though he had spent 20 years drilling oil wells and building and operating oil-field production and distribution facilities from Canada to the Gulf of Mexico, Kelly had zero experience working in the Arctic, one of the harshest and most remote environments in the world. “I was one of the first operating guys up there for ARCO,”the Anchorage resident recalled recently. One of two production engineers who shared the job of North Slope coordinator, Kelly was charged with ensuring that all of the varied drilling, production and construction activities under way in the eastern half of the field ran smoothly. In that position, Kelly said he watched a functioning oil field, day by day,rise from the tundra and inch closer to startup. “If anybody had a problem, they’d let me know about it, whether it was injuries or bears, whatever,”Kelly said.

Experience and common sense This responsibility sometimes led to dramatic confrontations, he said. For example, when a worker was seriously injured, Kelly waylaid a commercial airplane sitting on the ground at the Sagwon airport and asked the pilot to delay takeoff so the plane could transport the 86 Harnessing a Giant: 40 Years at Prudhoe Bay LANDON KELLY

A view of the Prudhoe Bay oil field and the trans-Alaska oil pipeline during their early development and construction. injured man to the hospital in Fairbanks. “I’d spend all week in Los Angeles, come “I asked the pilot to wait and he said, home on Fridays and meet with the opera- ‘No.’Well,I parked a bulldozer in front of tions people — the president of ARCO the plane,”Kelly recalled.“The pilot threat- Alaska Inc., the head of engineering and ROSE RAGSDALE ened to call the police, and I told him to the engineering staff,”Kelly said.“When I get after it.” returned to LA on Monday,I would have a Five minutes after the standoff began, it pocket full of decisions.” was over. Emergency workers trundled the injured man aboard the plane and the air- Attention to detail craft took off. In this manner,ARCO worked its way Life on the Slope in those days, before through design, construction and commis- the oil producers and contractors estab- sioning of its production facilities. lished formal policies and procedures, was During the construction phase, Kelly full of instances where Kelly had to make said he asked the operations staff to work snap decisions based on his judgment and at night, fine-tuning and testing the process- common sense. ing facilities while the construction work- Kelly said he watched ARCO build a top- ers slept. ping plant early on because the company “Every night, between 10 p.m. and 2 knew it had a big field that would have a a.m., I’d go ‘piddlin’,”Kelly said. considerable thirst for fuel. Today, Landon Kelly fondly recalls his first job for “Piddlin” was Kelly’s word for walking He said he also helped with construc- Atlantic Richfield Co. on Alaska’s North Slope, around the facilities, casually observing and tion of a pipeline test loop, which gathered helping to manage construction of Prudhoe Bay visiting with operations staff while they data that ultimately affected the design of oil field production facilities. were working. the trans-Alaska oil pipeline. information, so we made the decision to He said the practice paid off when “We found that a core of oil would start over,”Kelly said. ARCO’s production facilities did not miss a move through the lines with friction and The coordinator was asked to help with beat at startup in 1977, and “unlike,the that we could keep the oil moving even in module design and selection of equipment. other side of the field, was able to supply the coldest temperatures,”Kelly said. “We started from scratch working with its full quota of output to Pump Station 1 He said this early period was dominated a design team in Los Angeles,”Kelly of the trans-Alaska oil pipeline from Day 1 by politics, and it took ARCO four years to recalled.“As we developed the design, we without interruption.” secure an operating permit for the field’s would make sure we could operate it safely Once Prudhoe Bay was up and running, processing facilities. and efficiently and that we could maintain ARCO invited Kelly to bring the expertise But by the time ARCO won the permit, it.” he’d acquired to bear on the company’s the module that engineers had originally This process led to a rather unusual next North Slope challenge, designing and designed for the field’s flow stations arrangement in which Kelly commuted building production facilities for the seemed inadequate. between the North Slope and Los Angeles Kuparuk River field, North America’s sec- “By that time, we had quite a bit more for three years. ond-largest oil field. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 87

1957 The Swanson River oilﬁeld on the Kenai Peninsula becomes the ﬁrst major commercial oil discovery in Alaska.

1968 The Prudhoe Bay oilfield is discovered. Its discovery well proves the commercial viability of the largest oilfield ever found in North America. 1969 The Kenai Liquefied Natural Gas Plant began operating after ConocoPhillips made natural gas discoveries in the Cook Inlet region, making it the only plant in North America that exports LNG. 1977 The Trans Alaska Pipeline System begins carrying Alaska oil 800 miles from Prudhoe Bay to the port of Valdez. 19 8 1 The Kuparuk oilfield, the second largest in North America, begins production.

2000 ConocoPhillips starts up the Alpine oilfield, creating a reduced industry footprint of just two-tenths of one percent of the field’s surface area. 2001 The first double-hulled tanker, the Polar Endeavor, arrives in Alaska — a new generation of oil tankers. 2004 ConocoPhillips announces the first Alpine satellite fields. 2008 And now, in 2008, we’ve returned to our historic roots even as we look to the future, drilling new wells on the Kenai Peninsula. A FIRSTSHISTORY OF

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Let’s make history again. 88 Harnessing a Giant: 40 Years at Prudhoe Bay ARCO hires naturalist to study wildlife Early 10-year commission establishes high standards for environmental protection in Prudhoe Bay, North Slope oil fields

By Rose Ragsdale about the North Slope, except that its tun- scientist,Angus Gavin, to conduct a 10-year For Petroleum News dra and permafrost would pose consider- comprehensive baseline study from 1969 able problems in developing the field and to 1978 to determine Prudhoe Bay’s eco- hen oil was discovered at Prudhoe in getting the oil to market. logical values. Objectives of the study WBay in 1968, very little was known Atlantic Richfield Co. hired a Canadian included evaluating the effects of oil field development on the environment; invento- rying caribou, waterfowl and sea birds and other wildlife using this region of the Slope and evaluating the effects of oil field development on their numbers, distribution and migrations; and conducting a baseline study of all offshore islands. Gavin came to Canada as a young zoologist from Scotland to work for Hudson’s Bay Co. in Canada. For six years, he was assigned to the Western Arctic where his only means of communication with the outside was a once-a-year supply boat. Gavin’s primary function was to check and report on populations of fur-bearing animals in that remote region, in order to give Hudson’s Bay’s home office an estimate of the coming year’s harvest. But Gavin was many other things to the Canadian Natives that he befriended — doctor, teacher and counselor. During his Arctic years, he also compiled an English- Eskimo dictionary,which is still in use today. Gavin also was the first to locate the breeding grounds of the elusive Ross’ goose. In the early 1940s Gavin spent two years gathering information for the province of Alberta on waterfowl and other wildlife in the Athabasca Delta area. Then, in 1945, he joined Ducks Unlimited, Canada, a conservation group, as provincial manager for Saskatchewan. Gavin remained with Ducks Unlimited for 24 years, the final two decades as general manager for all of Canada. In 1969, he retired.

Conservationist comes to Alaska But Gavin’s retirement ended almost before it began. ARCO Chairman and CEO Robert O. Anderson persuaded the naturalist to survey,study and report on wildlife and the environment of Alaska’s North Slope. Harnessing a Giant: 40 Years at Prudhoe Bay 89

The Atlantic Richfield base camp in the early days at Prudhoe Bay in the 1970s. FRANK H. WHALEY,ARCHIVES MUSEUM ANCHORAGE

At a time when the environmental movement was a fledgling concept and virtually unknown in Alaska, Kelly said ARCO tried really hard to protect the environment through Gavin’s work.

Equally important, Gavin was to recom- mend ways to minimize the negative impact of oilfield operations there. When Gavin first went to the North Slope in 1969, very little of substance was known about the area’s wildlife and environment.Through his work, this quickly changed. “Every time we wanted to build something,Angus would inspect the area,” recalled Landon Kelly,one of the first operations managers appointed to lead development of the Prudhoe Bay oil field.“He would then tell us if we had to (avoid) any wildlife or nests with the construction.” At a time when the environmental movement was a fledgling concept and virtually unknown in Alaska,Kelly said ARCO tried really hard to protect the environment through Gavin’s work. When the zoologist completed his extensive 10 years of studies in 1978, Gavin summarized his findings as follows: “Although the development of an oil field at Prudhoe Bay and the building of a pipeline to Valdez, together with all the other attendant activities, have at times dis- rupted and disturbed some of the wildlife within the area, this should not have any lasting or detrimental effects. “With major construction work over for the present, more normal conditions now prevail, although our surveys over the years have shown that most species of wildlife adapt quite readily to changing environmental conditions.” ◆ 90 Harnessing a Giant: 40 Years at Prudhoe Bay

A trench digger hews a trough in rock, ice and permafrost for a gas line to power pumps used to push crude oil through the trans-Alaska oil pipeline from the Prudhoe Bay oil field to Pump Station 4 in northern Alaska in the mid-1970s. STEVE MCCUTCHEON TRANS-ALASKA PIPELINE SYSTEM CONSTRUCTION COLLECTION,TRANS-ALASKA PIPELINE SYSTEM STEVE MCCUTCHEON ARCHIVES MUSEUM ANCHORAGE

Producers weigh many marketing options Alternatives for getting Prudhoe Bay oil to market narrowed to choice between trans-Alaska and trans-Canada overland pipelines

Petroleum News possible ways of transporting North Coast through an 800-mile line to an ice- Slope oil to market, by sea through the free port in southern Alaska where fter the oil was discovered, the big Bering Strait or overland by pipeline.The tankers could be loaded for ocean trans- problem facing the oil companies A former would mean opening up the leg- port. was how to get the oil to market. endary Northwest Passage as a regular Several interesting proposals emerged Markets within the United States, already shipping route. If it could be done, it from the discussion. One was moving dependent on foreign imports because would mean tankers, or oil-carrying sub- the oil by sea to the East Coast via ice- domestic production could not meet marines could supply oil to East Coast strengthened tanker, notably Esso’s demand, were located mainly on the East markets.An overland pipeline could sup- tanker SS Manhattan in the U.S. mer- Coast, the Midwest and the West Coast. ply either the Midwest through a 2,900- chant fleet.The project would cost an Developers could envision only two mile line across Canada or the West estimated $50 million and was spon- Harnessing a Giant: 40 Years at Prudhoe Bay 91

sored by Humble Oil and supported by BP and Atlantic Richfield. While other vessels had made the transit earlier, the 150,000 deadweight- ton Manhattan was the first commercial C.G. “GIL” MULL vessel to make the passage. Its partial double-hull construction was designed to break through the Arctic ice packs on its voyage through the Northwest Passage and across the Canadian and Alaska Arctic. The tanker made a much-publicized 10,000-mile round trip in the fall of 1969 and another the following spring. However, this form of transportation was not adopted because it was concluded that transporting oil via tanker in the Arctic was not commercially viable on a year-round basis due to unpredictable, offshore ice conditions, which made it unreliable for year-round loading.

Other ideas explored A proposal by General Dynamics called for a fleet of submarine, nuclear-powered tankers. The Canadian Institute of Guided A 1971 map of the Prudhoe Bay oil field showing locations of wells, and production and processing facilities. Ground Transport produced a study “Railway to the Arctic,”which concluded been made. likely that a trans-Canada oil pipeline that a 1,240-mile, double-track railway Studies, however, indicated that a trans- could not be operational before 1983.” from Prudhoe Bay to existing pipeline Alaska pipeline was the most economical Patton added that the resulting delay facilities near the Alberta border would be option. would add hundreds of millions of dol- technically feasible and financially attrac- The position of Alyeska Pipeline lars to the nation’s resource bill and tive. Service Co. on a trans-Canadian line was some $3 billion annually to the balance Tanker aircraft, dirigibles and other air- made clear in March 1972 when it point- of payment deficit. ships also had their supporters, but the ed out that the trans-Alaska line would Because of the obvious economic most frequently suggested alternative to cross fewer permafrost areas than any benefits to the state and local communi- Canadian alternative, that it ties, there was strong support within would result in less disrup- Alaska for an all-Alaska route.Alaska’s A crane loads a Mukluk Freight tion of terrain and require Gov. Keith Miller and other influential Lines truck with 80-foot sections of the crossing of fewer Alaskans agreed with the proposal for a pipe to take north to storage yards at Prudhoe Bay during construction streams and rivers, that it terminal to be built at Valdez. of the trans-Alaska oil pipeline in would be half as long, and When it came apparent that the trans- January 1975. that it would be built soon- Alaska route had won out over other er at half the cost. alternatives, the companies focused their energies on developing a viable pipeline Trans-Alaska pipeline system.The proposed 48-inch line, capa- Alyeska President ble of carrying oil at a rate of 2 million Edward Patton told a U.S. barrels per day was initially estimated to House of Representatives cost $900 million.The final cost eventually topped $9 billion. MCCUTCHEON/TAPS CCOLLECTION,MCCUTCHEON/TAPS MUSEUM ANCHORAGE subcommittee in April 1973:“If the trans-Alaska Various estimates were made of the the Prudhoe-Valdez line was another line is completed in 1977, it will have cost of producing the oil at Prudhoe Bay. pipeline from the North Slope into taken nine years from commencement Arlon Tussing of the Federal Field Canada via the Mackenzie River Valley to of planning to completion.A trans- Committee for Development Planning in Alberta. From there it would be linked to Canada line, which would be twice as Alaska estimated the wellhead cost, the existing pipeline system, allowing long merely for the first leg to including discovery, development and Alaska crude to be piped directly to Edmonton, is at the same stage in the production, at 24-54 cents a barrel based Chicago and the Great Lakes industrial planning process as was the Alaska line on 10 billion barrels in recoverable belt.The pipeline would also carry in 1969. Giving consideration to the reserves.That compared with about 80 Canadian crude from the Mackenzie delta, magnitude of the project, and the poten- cents to $1.25 per barrel in wellhead ◆ where some significant oil discoveries had tial for delay by opponents, it is most cost for Cook Inlet oil. 92 Harnessing a Giant: 40 Years at Prudhoe Bay Pipeline tops for moving oil to market Companies organize unprecedented engineering feat to overcome technical challenges of transporting Prudhoe Bay crude to tidewater

Petroleum News An aerial view of the Haul Road, now called the ven while Put River No. 1 was being Dalton Highway and the trans-Alaska oil pipeline E drilled, the three companies most con- climbing up through Atigun Pass and the cerned with Prudhoe Bay at that time — Continental Divide, looking south through the C.G. “GIL” MULL pass. Here the pipeline is buried under the bare British Petroleum,Atlantic Richfield and patch of ground that climbs up and goes under Humble (predecessor to ExxonMobil) — initi- the road near the right side of the photo. ated a full-scale study of all possible alternative routes for moving the oil off the North Slope. In October 1968, BP,ARCO and Humble formed a joint venture to organize, design and build a pipeline to transport Prudhoe Bay oil to market.The new enterprise was called Trans-Alaska Pipeline System, or TAPS. ARCO and BP each initially held a 37.5 percent interest in the line and Humble held a 25 percent share.Those ownership interests changed over the next 40 years.Today, BP owns 50.3 percent, while ConocoPhillips holds 28.1 percent and ExxonMobil retains a 20.3 percent stake. In 1968, the big three soon-to-become producers extended an invitation to other companies that might wish to transport oil from the North Slope in the future.This led to four other companies — Mobil Alaska Pipeline Co.,Amerada Hess Pipeline Co., Phillips Alaska Pipeline Corp. and Unocal Pipeline Co. — joining TAPS.

Trans-Alaska pipeline chosen to move oil In February 1969 TAPS announced plans to build a trans-Alaska crude oil pipeline south from Prudhoe Bay to the nearest ice-free Harnessing a Giant: 40 Years at Prudhoe Bay 93

An aerial view of Pump Station 4 of the Trans-Alaska Pipeline System and the Haul Road at the Brooks Range mountain front, looking north out C.G. “GIL” MULL onto the foothills. Galbraith Lake is in the upper center of the shot.

port.TAPS aimed to build a 789-mile later it was officially named Atigun Pass. distance it would have to run in high ice- (revised later to 798 miles), 48-inch diam- “All of us working on the Slope at the content permafrost areas; bypassing iden- eter pipeline from Prudhoe to the port of time just assumed the line would go tifiable geologic hazards; avoiding terrain Valdez on Prince William Sound on through Anaktuvuk Pass,”he said. and soil conditions which could present Alaska’s southern coast.The initial esti- Though Atigun was higher than undue construction difficulties, minimiz- mated cost of the project was $900 mil- Anaktuvuk Pass, an alignment of the ing alignments requiring large amounts lion - the most expensive ever proposed route linking these principal points — of grading, such as side-hill construction; by private industry at the time. Inflation Atigun Pass, Rampart Canyon and Valdez bypassing population centers; and wher- and environmental considerations even- — was selected. Criteria included keep- ever possible, avoiding sites of antiquities tually drove the final cost to more than ing the pipeline profile within the limits and important fish spawning or wildlife 10 times that amount. of past experience in relation to moun- areas. Route feasibility studies indicated that tain crossings.This involved intensive Soil conditions along the route, which an obscure pass through the Brooks studies to ensure the pipeline was not could influence the pipeline’s alignment Range was the best route for the pressured past design specifications; min- or mode of construction, were studied in pipeline.The pass had never been imizing the length of the line; ensuring considerable detail. More than 3,000 bore named.“Early on,”Mull said,“the compa- that the line could be buried for the holes were drilled from Valdez to nies referred to it as Dietrich Pass,”but greatest possible distance; minimizing the Prudhoe Bay, from which more than 94 Harnessing a Giant: 40 Years at Prudhoe Bay

30,000 core samples were taken. Pre-construction costs of the Alyeska pipeline totaled more than $100 million. The bulk of that was in soil investiga- tions, in determining methods of pipe C.G. “GIL” MULL support, in testing the pipe itself, which came from three companies in Japan, and in compiling environmental baseline data. The size and scale of the project was daunting.The pipeline would cross the Denali fault line on the north side of the Alaska Range, an area known to be seismi- cally active, and 600 streams and rivers. Three mountain ranges also would be crossed by the pipeline – the Brooks, Alaska and Chugach mountains.The point of highest elevation is 4,739 feet at Atigun Pass in the Brooks Range.The steepest grade is 55 degrees at Thompson Pass in the Chugach Range.

Unprecedented technical challenge Designing the pipeline was an unprecedented engineering challenge.Thousands of bore-hole core samples were analyzed. Seismic experts at the U.S. Geological Survey in Menlo Park, Calif., reviewed reams of data to assess earthquake risk. Extensive stress analyses on the pipe were conducted Several factors made the design of the line unprecedented in terms of complexity. The 48-inch pipeline system had to be able to achieve a throughput of 1.5 million barrels per day . It had to be built to address three different soil conditions – normal soil where the pipeline could be buried in a conventional manner, discon- tinuous permafrost where the pipeline could be buried if adequately insulated An aerial view of the bridge built over the Yukon and continuous permafrost where the River for the trans-Alaska oil pipeline and Haul Road pipeline would have to rest on an elevat- crossing during its construction in the summer of ed pipe rack, or vertical support mem- 1975, with big barges and construction cranes in the bers, whose pilings were constantly center of the river. cooled to prevent heating and thawing of the permafrost. special low temperature considerations as Above-ground sections (about half The 48-inch diameter mainline pipe well as all U.S. government and American the line) required thermal insulation to was delivered to Alaska in the early 1970s Petroleum Institute standards. slow the drop in oil temperature in the from three companies in Japan – The pipeline system had to be built event of a pipeline shutdown. Sumitomo Metal Industries,Yawata Iron to withstand the combined stress of Geotechnical, geological, civil and and Steel, and Nippon Kokan.The 69,000 internal pressure of thermal, bending Arctic engineering, stress analysis, ther- lengths of pipe were stockpiled at large and seismic forces. mal engineering, agronomics, hydraulics, sites in Valdez, Fairbanks and Prudhoe At river crossings and in certain flood mechanical and welding engineering Bay.Total pipe cost about $120 million. plains, it required anti-corrosive coating were all required.This wide-ranging The pipe had to be strong with wall and an outside layer of concrete to array of engineering disciplines pro- thicknesses of 0.462 and 0.562 inches anchor it to stream bottoms.All buried duced the most detailed design of any and specified minimum yield strengths of sections required anti-corrosion costing pipeline ever constructed.Also signifi- 60,000-70,000 pounds per square inch. and cathodic protection with sacrificial cant was that it was constructed within These specifications would meet or zinc anodes to prevent chemical and a short period of time — a mere three exceed the requirements for safety and electrolytic corrosion of the pipeline. years. ◆ Harnessing a Giant: 40 Years at Prudhoe Bay 95 Fast and furious construction Prudhoe Bay owners tackle pre-pipeline preparations at record-setting pace; Haul Road completed in less than six months

Petroleum News built north and south from a center point until they all con- n order to begin construction A truck headed south on the 400-mile Haul Road, now named the Dalton nected. Four execution con- on the pipeline,Alyeska I Highway, that runs from Fairbanks to tractors selected for the work Pipeline Service Co. needed to Prudhoe Bay in the early 1970s. An 8- were joint ventures Green put in a road to service its con- inch gas pipeline is being constructed beside the road to supply fuel for Pump Associated and General Alaska- struction.The road would start Stations 2, 3, and 4. Stewart along with Morrison- at the Yukon River, at the end of Knudsen Co. Inc. and Burgess the 53-mile Elliott Highway Construction Co. Each of the from Fairbanks to Livengood, contractors built two sections and continue north some 360 of the road. miles to the North Slope. Supply flights during the Anticipating an earlier pas- winter had just been the sage of a the Trans-Alaska beginning. Now a squadron of Pipeline System right-of-way more than 60 aircraft, ranging permit, tons of road-building from helicopters to big, fixed- equipment and camp units wing transports and air were distributed along the pro- tankers, crisscrossed the skies posed route of the haul road over northern Alaska in sup- beginning in 1969-70. One of port of the road-building the main obstacles on the route effort. More than 127,000 was the Yukon River, so ice flights were logged, an average roads were constructed each of 700 flights per day. winter to keep material sup- Suppliers flew in 8.5 million plies moving north. gallons of fuel to power con- With receipt of the right-of- struction equipment and way permit in 1974, the project camps.Another 160,000 tons moved into high gear.The logis- of supplies and material were tics of the northward flow that CONSTRUCTION COLLECTION,TRANS-ALASKA PIPELINE SYSTEM STEVE MCCUTCHEON ARCHIVES MUSEUM ANCHORAGE transported by air. By early began in the winter of 1974 summer, barges were bringing would dwarf heroic episodes of in materials by sea directly to the past like the Berlin airlift Prudhoe Bay. and some great overland efforts Alyeska picked Bechtel Inc. in Alaska itself, such as the Gold of San Francisco as Rush in the 1890s; and some Construction Management military movements during Contractor or CMC for con- World War II. struction of the road, 29 In 83 days, from late January camps and the pipeline.The to mid-April 1974, a force that at following year,Alyeska became one point numbered 680 workers moved perform planning and civil engineering CMC for the pipeline portion of the work, some 34,000 tons of machinery and mate- for the road project, which included the which included nearly 800 miles of 48- rials into northern Alaska.This took 671 first permanent bridge across the Yukon inch-diameter mainline pipe installation, aircraft flights – a large number of those River.A joint venture, Manson-Osberg- 12 pump stations and a marine terminal C-130 Hercules cargo aircraft – and 1,285 Ghemm won the construction contract in Valdez. trips by truck. Seven mothballed con- for the $30 million, 2,295-foot bridge, Trucks carried more than 31 million struction camps were opened and which was completed in 1975. cubic yards of rock to bring the 28-foot- enlarged, and five new camps were built. wide road up to state secondary road Road construction expedited Five temporary airstrips were built over standards.Work on the 360-mile-long grav- the snow and ice, to be replaced in spring Haul Road construction officially began el roadway,later named the Dalton by a permanent gravel-based runway at in April 1974, and at the peak of the Highway,was completed Sept. 29, 1974, each camp. Crews kept at it around the effort,Alyeska and its contractors only 154 days after construction startup. clock in temperatures that dropped as deployed more than 3,400 workers along The 3-million-manhour, single-summer low as minus 68 degrees Fahrenheit. the 400-mile route.The road was divided project was unprecedented in Alaska his- Michael Baker Jr. Inc. was selected to into eight sections, and each section was tory. ◆ 96 Harnessing a Giant: 40 Years at Prudhoe Bay Pipeline startup brings oil to market Producers wade through sea of challenges to build trans-Alaska oil transportation system

Petroleum News Some of the pipe oil companies he year 1973 brought stockpiled at Prudhoe Bay dur- T the Arab Oil Embargo ing the early 1970s when regu- and saw the creation of the latory, legal and legislative C.G. “GIL” MULL issues delayed construction of term “oil crisis” in the minds the trans-Alaska oil pipeline. of Americans and the nation- alization of oil holdings by several Third World countries, including ARCO’s holdings in Libya. ARCO President Thornton F.Bradshaw told a Congressional committee on March 27, 1973, that “each day’s delay in bringing Alaska oil to U.S. markets results in a balance of payments loss to the United States of about $5 million.” By the 1980s, he said, this loss would amount to $10 million per day. He also told the Senate Interior Committee that the first decade of operation of the pipeline would have a cumulative benefit of between $20 billion to $25 billion on U.S. ness.The trans-Alaska pipeline into law on Nov. 16, 1973, and when plans to build the balance of trade payments. will be easily the safest and on Jan. 23, 1974, the U.S. pipeline were put on hold by Addressing the environ- best-engineered pipeline in Secretary of the Interior the federal government. mental issues surrounding the the world.” signed the primary federal proposed pipeline, Bradshaw right-of-way permit for con- World-class said,“We have spent tens of Pipeline right-of-way struction of the $9 billion, construction begins millions of dollars in design becomes law 800-mile, trans-Alaska oil Prior to actual pipeline to meet the stringent chal- President Richard M. pipeline. Called the most mas- construction, a service road lenges of the Alaskan wilder- Nixon signed the measure sive construction project ever was built from Livengood to undertaken by private indus- the North Slope, a distance of try, the trans-Alaska pipeline some 360 miles, or about 581 system was designed to pump kilometers. It took more than up to 1.5 million barrels per 31 million cubic yards of day of crude across three gravel to build the road. mountain ranges and some 600 rivers and streams. First pipe laid for line Alaska residents, particular- The first pipe for the trans- ly in Fairbanks, were cautious Alaska oil pipeline was in their enthusiasm when installed at the Tonsina River Nixon signed the pipeline on March 27, 1975.There legislation because many of were 29 temporary camps their businesses had barely from Pump Station 1 to the survived the expected boom marine terminal in Valdez. of 1969, which collapsed Each camp was self-sufficient Harnessing a Giant: 40 Years at Prudhoe Bay 97 and housed between a few and several thousand workers.The entire pipeline work force peaked at 28,000 in October 1975. Minority hire ranged between 14 percent and 19 percent and anywhere from one in 20 to one in 11 workers were women. Average pay for working 12 hour days, seven days a week, was $1,000 per week. Skilled laborers such as welders earned considerably more. Even with the high wages of the time, the turnover rate was about 20 percent. In Fairbanks at the main transportation hub for the project, telephone lines were constantly ATLANTIC RICHFIELD COMPANY COLLECTION/STATE OF ALASKA ARCHIVES ALASKA OF COLLECTION/STATE RICHFIELD COMPANY ATLANTIC jammed; grocery stores struggled to keep shelves stocked; and a cab- over camper in a pickup truck rented out for $500 a month. To a lesser extent,Anchorage and Valdez felt similar effects. The Valdez terminal was a massive project. It covers more than 1,000 acres and was designed with four tanker-loading berths and tankage to hold a total of 9 million Drilling rig crews have played a vital role in development of the giant Prudhoe Bay oil field throughout its barrels of crude oil.The facility 40-year history. Here roughnecks connect pipe string during delineation drilling at Prudhoe Bay in 1969. also processes oil ballast water Extreme weather conditions in the Arctic mandate that the drill floor be enclosed and heated. taken out of tanker ships as they are loaded with North Slope crude oil. Hydrocarbon vapors are vented from the storage tanks as the level of crude oil fluctuates.The cost of the terminal was about $1.4 billion.

Oil flows into TAPS Officials hoped to have oil flowing through the pipeline by July 1, 1977.Ten days ahead of schedule, the first oil flowed into the trans- Alaska oil pipeline on June 20, 1977, at 10:05 a.m.The oil moved at about 5 miles per hour through 10 pump stations, taking six days to reach Valdez.At that point, it was stored in 510,000-barrel tanks and then was taken by oil tankers to refineries in the Lower 48. To date, the trans-Alaska pipeline system has safely transported nearly 13 billion barrels of crude from the North Slope to Valdez, oil that has accounted for 20 percent of U.S. oil production at Prudhoe Bay’s peak of output Shimmering lights on at Port Valdez reflect constant activity

at the 1,000-acre marine terminal of the trans-Alaska oil CO., PIPELINE SERVICE ALYESKA TRANS-ALASKA PIPELINE CONSTRUCTION COLLECTION,ARCHIVES ALASKA OF STATE and a substantial portion of domes- pipeline in 1976 before the 1977 startup of Alaska North tic output for most of the past 31 Slope oil production at the Prudhoe Bay field. years. ◆ 98 Harnessing a Giant: 40 Years at Prudhoe Bay

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The Americas (Int’l +1) 713-354-6100 European Served Areas (Int’l +33) 2-35-25-5225 Asia-Pacific (Int’l +60) 3-2093-6633 / [email protected] Alaskans remember Prudhoe Bay By Nancy Pounds Most Alaskans don’t remember what Alaska’s economy looked like before the discovery and development of Prudhoe Bay. Only 14 percent of about 670,000 Alaskans today lived in the state in 1968, the year of the Prudhoe Bay discovery, according to Scott Goldsmith, economics professor at the University of Alaska Anchorage’s Institute of Social and Economic Research. So nearly nine out of every 10 residents today know little about Alaska prior to major development on the North Slope, he said. Goldsmith compared 1968 and 2008 in a recent report called, “How North Slope oil has transformed Alaska’s economy.” A few longtime Alaskans, participants and decision-makers during Alaska’s major economic changes, recently recalled events of the era.

Arliss Sturgulewski Prudhoe Bay’s oil development was She remembered the the impetus and made the decisions Arliss Sturgulewski attended the oil economic crash of 1986, but come faster, she said. lease sale in 1969 that brought $900 mil- “It was a tumultuous time,”she said. noted that growth since has been lion to the state. Alaska’s economy has changed more controllable, and the state’s “We just thought we were in the last 40 years, due to factors very rich,”she recalled recently. economy is more diversified. other than oil such as growth from Sturgulewski, who came to fisheries, military spending and air “Without question oil has been Alaska in 1952, has seen many cargo among others. But the oil a big factor in the state’s changes in the state. She served industry has been important. in the Alaska Legislature from economy,” she said. “Without question oil was a dri- 1978 to 1992. ver of good-paying jobs,”she said. “It was a really transitional one of Alaska’s reigning public She remembered the economic time for Alaska,”Sturgulewski stateswomen. Educated at the University crash of 1986, but noted that said. of Washington, she retired in 1992 after ARLISS growth since has been more con- At the time of the Prudhoe 14 years in the Alaska Legislature and STURGULEWSKI trollable, and the state’s economy Bay discovery, the state needed twice running as the GOP gubernatorial is more diversified. to build roads and other infrastructure, candidate. She has continued in public “Without question oil has been a big she said. service as a major force in policy initia- factor in the state’s economy,”she said. “We had some very big land issues to tives aimed at improving economic, resolve,”she added. educational and social opportunities for Editor’s Note:Arliss Sturgulewski is Alaskans. ◆

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PFX-1.PFX-2, PFX-3 (Flow line expansions) The Seawater Treatment Plant at the end of the West Dock Causeway on the North Slope is an important Early 1980s expansion of oil flow line con- component of processing facilities for the Prudhoe nections from well pads to gathering cen- Bay oil field. Oil producers have used seawater in ters, PFX facilitated the tie-in of produc- developing increasingly sophisticated enhanced oil recovery techniques that are vital in the ongoing tion manifolding at each well pad. development of oil reserves on the North Slope. Wellpad Manifolding (WPM) BP EXPLORATION (ALASKA) INC. BP EXPLORATION Routing oil from wells to common flow- lines through a manifold rather than sending it to gathering centers through individual lines.

Produced Water Expansion (PWX) Multi-phased project begun in 1982 which expanded water-handling capacity throughout the Prudhoe Bay field and provided water treatment facilities to further strip oil from produced water. It also pro- Field-wide Waterflood produced. vided a distribution system to wellpads for Prudhoe Bay pressure maintenance pro- injection to facilitate secondary recovery. Eileen West End (EWE) gram in 1984 which included seawater A Prudhoe Bay field extension in 1988. Low Pressure Separation (LPS) injection into the reservoir. Scope of the $2 billion program included distribution sys- Facilities were mini-modules built in Alaska Multi-phased project initiated in 1982 tem, seawater treatment plant (barged and trucked to the North Slope, and tied which greatly increased the productivity of from Korea) and pumping systems at back into main Prudhoe infrastructure. Prudhoe Bay wells by allowing gas to enter Gathering Center 1 and Flow Station 1. separation facilities at a lower pressure. Gas Handling Expansion Cost exceeded $700 million in 1982 dollars. Large-Scale Enhanced (GHX) Phases I and II Oil Recovery (EOR) A project to handle increasing quantities Gas lift (GLT) Begun in 1986, involved injecting miscible of natural gas produced with the oil Substantially increased gas-lift compression injectant (MI) throughout the reservoir to stream in 1990. A second phase was com- and distribution system at Prudhoe Bay in aid recovery. Through construction of the pleted in 1995 at a cost of $1.4 billion. 1984 and supported well productivity Central Gas Facility (CGF) in 1987, more processes. MI and natural gas liquids (NGLs) were Source: BP Exploration (Alaska) Inc. Harnessing a Giant: 40 Years at Prudhoe Bay 101 BP EXPLORATION (ALASKA) INC. BP EXPLORATION

The Central Gas Facility, foreground, and Central Compression Plant at Prudhoe Bay represent the largest natural gas plant complex in the world. The oil industry has invested more than $40 billion in Alaska since the 1970s, and billions more will be required to keep oil production levels steady in the coming years. While natural gas promises to become an important future source of North Slope petroleum production, the producers also are focused on finding more oil in smaller accumulations. Five Prudhoe Bay satellite oil fields currently produce about 45,000 barrels per day and help offset the giant oil field’s decline. Mid-life transition for a giant 40 years after discovery the Prudhoe Bay field continues to produce oil while looking forward to future natural gas sales

By Alan Bailey Moreover, Prudhoe Bay and the associat- lower Cretaceous unconformity — the oil Petroleum News ed trans-Alaska oil pipeline have proved to and gas lie trapped against that unconfor- be the anchor for about 25 producing mity. t a time when daily oil production North Slope fields. To plan field development, petroleum A from the giant Prudhoe Bay on “If it weren’t for Prudhoe and TAPS engineers subdivide the Ivishak reservoir Alaska’s North Slope has declined from a none of those fields would be in produc- into four stratified zones, Digert explained. peak of about 1.6 million barrels in 1987 to tion either,”Digert said. Differences in the grain sizes between the about 400,000 barrels, it is tempting to rocks in the different zones cause major dif- think of the field as being in terminal Ivishak reservoir ferences in the permeability,or ability to decline. The Prudhoe Bay reservoir occupies an flow fluids, within the zones. Zone 3, for Not so, BP’s Greater Prudhoe Bay area of about 254 square miles.The main example, consists of massively coarse con- Waterflood Resource Manager Scott Digert section of the reservoir lies in the Triassic glomerates formed when the ancient delta told the 2008 Alaska Geological Society Ivishak formation, consisting of sandstone was at its maximum extent.The conglomer- Technical Conference on April 17, 2008. and coarse pebbly rocks called conglomer- ates allow fluids to flow particularly easily The AGS conference was celebrating the ates, laid down by an ancient river and — Digert recalled seeing 50,000 barrels of 40th anniversary of the discovery of river delta system, Digert said. In fact, infor- water per day being injected into just one Prudhoe Bay. mation about the subsurface rocks foot of these rocks. “This is a very exciting time to be work- obtained from the 2,500 or so well penetra- Layers of impervious shales are inter- ing on Prudhoe,”Digert said. tions in the reservoir has enabled a detailed stratified with the sandstones and conglom- Digert also reminded the audience that, reconstruction of the geography of the erates.The shales inhibit the vertical move- despite major discoveries in places like the ancient landscape. ment of fluids within the reservoir, but can Gulf of Mexico, Prudhoe Bay remains the The Ivishak is a massive 450-foot thick be used to support the transmission of top producing oil field in the United States. rock unit.And a separate 35-foot shallow pressure across the reservoir to enhance oil And the field has exceeded all expecta- marine sandstone layer known as the Sag recovery,Digert said. tions for oil production — originally,esti- River formation creates a second, much mated recoverable oil reserves were 9.6 bil- smaller reservoir above the main reservoir. Gas cap and oil rim lion barrels. The reservoir strata have been bent into an When discovered 40 years ago, the “As we stand today we’re at 11.7 (billion arch-shaped anticline, cut off at the top by Prudhoe Bay field contained a huge gas cap barrels) and counting,”Digert said. a major geologic discontinuity termed the sitting in the reservoir on top of an equally 102 Harnessing a Giant: 40 Years at Prudhoe Bay huge oil rim.A thin tarry zone of heavy, gas cap, while simultaneously pumping oil transits through pipelines to the trans- impermeable oil marked the base of the oil equally vast quantities of water into the Alaska oil pipeline for export from the rim and separated the oil from underlying peripheral part of the reservoir. field. water, Digert said. Between 1990 and 1995 the gas cycling The gas is piped to a major facility that At field startup in 1977, pressure in the process necessitated a progressive expan- chills the gas to minus 40 degrees gas cap forced oil up through the produc- sion of the gas injection capabilities in the Fahrenheit.The chilling causes the heavier ing oil wells. Gas produced through the field, with gas production starting at hydrocarbons such as propane, butane and wells was injected back into the gas cap to around 4 billion standard cubic feet per pentane to drop out of the gas as natural maintain reservoir pressure.And in the part day and eventually topping out at 8.5 bil- gas liquids. of the oil pool where the pressure from the lion standard cubic feet per day.The central Some of the natural gas liquids are gas cap transmits into the oil, gravity also gas facility at Prudhoe Bay is now the mixed with the crude oil for export. In all, causes the oil to flow down the gently largest plant of its kind in the world and more than 500 million barrels of natural sloping reservoir rock layer toward the pro- compresses the gas to about 4,000 pounds gas liquids, or NGLs, have been shipped to duction wells.This gravity flow effect gave per square inch for injection into the reser- market via the trans-Alaska oil pipeline. rise to the term “gravity drainage area” to voir. Much of the NGLs, however, are used for describe this part of the oil pool. enhanced oil recovery operations both at The lower section of the oil pool is too Waterflood Prudhoe Bay and in the nearby Kuparuk distant from the gas cap to be in significant Water for the waterflood operations River field. pressure communication with the gas. consists in part of water separated from the All but about 500 million cubic feet per “We don’t see that same gas-cap drive produced oil. However, a major component day of the dry natural gas from which the — the gas can’t expand directly into those of the injected water consists of seawater natural gas liquids have been extracted areas,”Digert said. that has been processed through a seawa- goes to the compressors in the gas plant, Consequently,massive volumes of water ter treatment plant. Initially,water was for re-injection into the reservoir, Digert have been injected into the periphery of injected at the rate of about 500,000 bar- said.The gas that is not compressed is used the oil pool to maintain reservoir pressure rels per day,but that rate has now as the primary fuel source for North Slope in this waterflood area of the reservoir. increased to about 1 million barrels per operations, with the bulk of this fuel gas Waterflood started in 1981, Digert said. day,Digert said. being used to drive the huge gas compres- So, the basic mechanism for production Fluids flowing from the production sors. at Prudhoe Bay involves the driving of oil wells pass through six flow stations and are But because of factors such as the use of under pressure up production wells by separated into water, crude oil and gas, gas for fuel, more material leaves the continuously cycling vast quantities of gas Digert said.The separated water is used in Prudhoe Bay reservoir than is pumped from the reservoir back into the top of the the waterflood operation, while the crude back in, Digert explained.As a consequence, the gas pressure declined significantly over the years after the field went into production. In 2002, to stem this pressure decline, BP started injecting water as well as gas into the gas cap.

Further enhanced recovery In addition to upping the gas and water injection capacity to maximize field production, several state-of-the-art enhanced oil recovery techniques have come into play to extend oil recovery from the field way beyond the initial recovery estimate of 9.6 billion barrels. In what is known as tertiary extended oil recovery,a solvent known as miscible injectant removes some of the residual oil left behind after a waterflood operation. Miscible injectant consists of a mixture of natural gas and some of the natural gas liquids obtained from the gas chilling plant. When the miscible injectant is swept through a waterflood area of the reservoir, lighter elements of the residual oil left behind from the waterflood operation tend to adhere to elements of the miscible injectant, Digert explained.As a consequence the fluid recovered from the reservoir becomes richer in oil components than the miscible injectant fluid that is Harnessing a Giant: 40 Years at Prudhoe Bay 103 injected into the reservoir, he said. extended oil recovery,a technique called tion because of a loss of gas pressure. In 1999 the massive $80 million MIX miscible injectant sidetrack, or MIST,uses However, the volume of the resulting gas module was barged to the North Slope to miscible injectant in combination with a sales would more than offset the loss of expand the field’s miscible injectant usage. specially shaped sidetrack well to target oil, Digert said. The use of 400 million cubic feet to remnant oil pools in worked-out water- “Our game now is going to be contin- 500 million cubic feet per day of miscible flood zones. Essentially,a sidetrack well is ued reservoir management strategies. … injectant is increasing oil production by designed to wrap horizontally around an We have an enormous opportunity to opti- about 50,000 barrels per day,Digert said. existing injector well at a distance of about mize (oil) production and maximize that Meanwhile, the multi-year use of gas 1,000 feet. Bubbles of miscible injectant production ahead of gas sales,”Digert said. injection and waterflood has resulted in released into the reservoir at different And there is also the prospect of con- some fragmentation of the oil, gas and points on the horizontal sidetrack then tinued future oil production in the water pools within the Prudhoe Bay reser- expand and herd the residual oil toward Prudhoe Bay unit from horizons above the production wells. voir. For example, the relatively gentle Prudhoe Bay field, such as viscous oil from slope of just two to three degrees of the West Sak (also known by BP as Schrader reservoir strata has allowed gas from the Future gas sales Bluff). gas cap to flow under the impervious Despite all of these ingenious ways of Meantime, the production of Prudhoe shale layers to leave small, disconnected producing yet more oil from Prudhoe Bay, Bay oil is already accompanied by the pro- pools of oil above the shales, Digert said. the field continues along a slow path of duction of huge volumes of gas for fuel “The gas tends to run under some of declining production. However, the really use and recycling. these continuous shales,”Digert said. big prize in the future is gas production State-of-the-art, high-tech drilling tech- from the field — the field originally con- “In our gravity drainage area they’re niques have proved critical in extending tained equal volumes of oil and gas, Digert starting to look like gas wells with a little field life by enabling access to these small, said.There is probably about another 2 bil- bit of oil, more than oil wells with a little disconnected pools. lion barrels of viable oil production left in bit of gas. It’s mostly gas coming out,” “So these are the targets that we’re still the field, but the field could produce gas Digert said. drilling for today,”Digert said. equivalent in energy to about another 4 But Digert feels optimistic about One technique involves the use of side- billion barrels of oil, he said. Prudhoe’s future. track drilling, the drilling of new low-angle The gas treatment plant for gas export “We’ve had massive development of a or horizontal well bores out from an exist- would be sited next to the existing central massive field,”Digert said.“We think we’re ing steep well penetration, to thread direct- gas facility,Digert said. Exporting gas from very well positioned for the next 40 years ly through the isolated pockets of oil. the field rather than re-injecting it would … both in oil and then the gas sales that And what people refer to as quaternary reduce the potential ultimate oil produc- will follow.” ◆ 104 Harnessing a Giant: 40 Years at Prudhoe Bay

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You don’t have to live here to appreciate the state. But at HDR, our staff are lifelong and long-term Alaskans. In our 30 years up north, HDR has planned, designed and constructed some of the state’s most complex infrastructure projects. Now we are providing our environmental and engineering services to major oil and gas producers, using the same operating philosophy: to provide economic, social and environmental solutions for Alaska’s sustainable future.

You don’t have to live here to appreciate Alaska, but we do.

www.hdrinc.com Alaskans remember Prudhoe Bay By Nancy Pounds Most Alaskans don’t remember what Alaska’s economy looked like before the discovery and development of Prudhoe Bay. Only 14 percent of about 670,000 Alaskans today lived in the state in 1968, the year of the Prudhoe Bay discovery, according to Scott Goldsmith, economics professor at the University of Alaska Anchorage’s Institute of Social and Economic Research. So nearly nine out of every 10 residents today know little about Alaska prior to major development on the North Slope, he said. Goldsmith compared 1968 and 2008 in a recent report called, “How North Slope oil has transformed Alaska’s economy.” A few longtime Alaskans, participants and decision-makers during Alaska’s major economic changes, recently recalled events of the era.

Gov. Jay Hammond you could never doubt his love for “The dividend is Alaska,”Arliss Sturgulewski said. Nearly all Alaskans receive the capitalism that Hammond speaks from his 1994 auto- Permanent Fund dividend, an ongoing biography,“Tales of Alaska’s Bush Rat works for Alaska. In economic legacy from an investment Governor.” a state where fund created with oil revenue from the “To the United States, with its insa- Prudhoe Bay oil field and other North locals traditionally tiable appetites, Prudhoe Bay’s billions of Slope development. barrels of oil (were) heralded as but one watch in frustration Former governor Jay Hammond, who more fat item on the energy menu. But as most resource died in 2005, is considered author of the to Alaskans, it was seen as the end of Gov. Hammond fund.The Alaska Permanent wealth goes in the 1970s dark poverty and the dawn of Fund has a history of controver- prosperity,”he wrote.“As Outside, the divi- sy yet its “no-small-change” annu- Alaskans eagerly awaited the dend’s grassroots ‘trickle up’ dis- al dividend has repercussions for ‘boom’ after so many decades of retailers, banks and other busi- tribution now accounts for the ‘bust,’thousands from elsewhere nesses. began flooding the Greatland, largest new capital infusion into Hammond arrived in Alaska in detonating a population boom Alaska’s local economies each 1946 and worked as a bush of their own.” pilot, commercial fisherman, year,” Hammond wrote. Hammond pushed the pro- trapper and wilderness guide GOV. JAY HAMMOND posed dividend for several years before entering politics. infusion into Alaska’s local economies amid controversy and many Hammond was a member of the state each year,”Hammond wrote. changes. In his book, he described his House of Representatives from 1959 to view of its economic significance. 1965, then a state senator from 1967 to Editor’s Note: Jay Hammond served “The dividend is capitalism that 1972. He was mayor of the Bristol Bay Alaska as governor from 1974 to 1982, works for Alaska. In a state where locals Borough from 1972 to 1974.And he the years during which Alaska built an traditionally watch in frustration as most served as governor from 1974 to 1982 incredible oil pipeline, banked a large resource wealth goes Outside, the divi- — intense years of the state’s oil rush. amount of the oil lease revenues, as dend’s grassroots ‘trickle up’ distribution “You might question his policies, but well as created the Alaska Permanent now accounts for the largest new capital Fund Dividend Program. 106 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 107 Looking ahead to heavy oil

This mobile gripper is equipment being used by BP Exploration (Alaska) Inc. in a new cold weather technology aimed at developing

BP EXPLORATION (ALASKA) INC. BP EXPLORATION heavy oil accumulations with the smallest environmental footprint possible on the North Slope. More than 20 billion barrels of viscous oil deposits remain in place near the Prudhoe Bay oil field. BP, ConocoPhillips and ExxonMobil have spent more than $1 billion developing the viscous oil resource. Five Prudhoe Bay satellite oil fields produce about 45,000 barrels per day and help offset the giant oil field’s declining production. Moving ANS syrup BP’s initial test of producing Ugnu heavy oil at Milne Point succeeds

By Alan Bailey tion, the project will move into a second duction of light oil from the North Slope. Petroleum News phase of testing, to evaluate whether heavy The light oil is needed to thin the heavy oil oil production at Milne Point will prove so that the resultant fluid can flow down P Exploration (Alaska) Inc. reached a economically viable, said Max Easley,Alaska the trans-Alaska pipeline,West explained Bmajor milestone in its heavy oil pro- Consolidated Team business unit leader. “We need the light oil to blend it with, gram in September 2008 when a special so it’s the perfect time in the North Slope’s test well on Milne Point’s S-pad succeeded 20 billion barrels life,”Easley said. in producing a mixture of sand and oil at a And, with an estimated 20 billion barrels Were BP to stick to the conventional peak rate of 120 barrels per day.The com- of heavy oil in place in the central North concept of waiting for depletion of the pany had lowered a pump into the well to Slope, the stakes couldn’t be higher. North Slope light oil before producing the extract oil with the consistency of choco- “If we only get 10 percent of it, that’s a heavy oil, the company would have to resort to an expensive technique such as late syrup from the Ugnu formation, 4,200 lot of oil,”West said. hydrogen cracking to create a light enough feet below the surface. By the end of the The oil in the Prudhoe Bay region has migrated into various reservoirs at different fluid for export by pipeline,West said. test on Sept. 15, about 700 barrels of the oil depths. But bacteria that become particular- had been mixed with conventional Milne ly active in the temperature conditions at Which way? Point crude and passed down the trans- depths of around 4,000 feet eat out the But which of the many possible ways of Alaska pipeline, according to BP lighter hydrocarbons,West said.That results producing that residue of heavy oil is likely spokesman Steve Rinehart. in a residue of heavy oil in relatively shal- to work? “The well brought oil and sand to the low reservoirs far above the conventional The most widely publicized methods surface,”Rinehart said.“It did it reliably,sus- light oil reservoirs of the North Slope oil consist of either the surface mining of oil tainably.” fields. sands or the application of heat to the This initial test was part of a phase one Methane waste from the bacterial action underground reservoirs,West said. testing project that continues into 2009, bubbles toward the surface and becomes However, in Canada, the epicenter of heavy Eric West,BP’s heavy oil project manager, trapped around the base of the permafrost oil development, techniques for cold heavy told a media tour of the Milne Point test as gas hydrate,West said. oil extraction have also been developed, he facility Aug. 18. About three years ago BP decided to said. If the phase one testing demonstrates embark on a project to try to develop the BP has a policy of not mining for heavy the technical feasibility of heavy oil produc- heavy oil while there is still significant pro- oil,West said.But the choice between hot 108 Harnessing a Giant: 40 Years at Prudhoe Bay

and cold in-situ production depends on the nature of the oil reservoir and the characteristics of the oil, he said. On the North Slope much of the Kuparuk unit area heavy oil appears most suitable for hot extraction, while in the Prudhoe Bay and Milne Point units cold techniques seem more

BP EXPLORATION (ALASKA) INC. BP EXPLORATION appropriated. West also said that cold techniques create a smaller carbon footprint than hot techniques. The particular technique that BP has chosen to try at Milne Point is called cold heavy oil production with sand, or CHOPS, a technique that has seen several commercial developments in Alberta. In this technique, which depends on an unconsolidated sand reservoir, the production well has large perforations and no screen for keeping the sand out of the well. Sand is produced along with the oil and is subsequently separated from the oil at the surface by heating the oil/sand mixture in a tank. “You’re actually producing a bit of the reservoir into the wellbore,”West said.“That is totally contrary to light oil reservoirs where you always want to keep the sand out.” Drilling advances such as extended reach directional, and multi-lateral and horizontal drilling techniques make it possible to reach untapped parts of reservoirs and viscous oil deposits, once considered uneco- Downhole pump nomic. At least 90 percent of the wells now drilled at Prudhoe Bay and other North Slope fields use this technology, which helps to boost production by tapping into oil deposits once thought out of reach. A key part of the well technology is the downhole pump, known as a progressive cavity pump, consisting of a long augur-like rotor that spins at high speed inside an enveloping tube.The rotating augur screw will draw material up the well, while being less susceptible to wear than a piston-based pump design. Because the sand in the well would tend to cause a downhole electric motor to overheat, the pump’s motor drive is placed at the surface and is connected to the pump rotor by means of a long rotating rod that extends through the well inner casing.A huge spool called a mobile gripper unit feeds the drive rod down into the well casing. The pump should cause a pressure drawdown or drop of around 1,000 pounds per square inch or more at the bottom of the well. “We’re going to put really significant drawdown against these open perfs,”West said.“And that’s going to induce the formation to produce into the well.” Once a well goes into operation, initial sand production should be high, perhaps 40 percent of the total production volume, said Grant Encelewski, operations lead tech for the BP heavy oil team.Then, after a system of fissures and wormholes in the reser- Harnessing a Giant: 40 Years at Prudhoe Bay 109 voir has opened up and somewhat stabi- wells and possibly the installation of addi- Cost and value lized, sand production will drop to 10 per- tional well test facilities. Phase two is likely The project team will try to apply inno- cent or less, with a corresponding increase to cost about as much as phase one. vative technologies to reduce costs.And, in oil production. “We’re going to put over $100 million finally,the team will need to ensure that “We define success,not so much as oil, into this, before we even know if this is a the footprint of the required surface equip- but as being able to bring sand to the sur- business opportunity,”West said. ment is acceptable. face in a sustainable manner,”West said.“… Several hurdles By crossing these various hurdles, BP If we can do that we know we’re going to expects to overcome the two major chal- have a project, because the oil will come Phase two could culminate in a devel- lenges of heavy oil production: high pro- with it.” opment decision, but for a viable full-scale duction costs resulting from the high oil And that’s exactly what happened in development the testing will need to cross viscosity and the relatively low value of the initial test, with sand production declin- several hurdles. the product. Because the heavy oil con- ing from about 50 percent of the oil/sand “This is a journey that is going to take tains a smaller proportion of high value mixture to about 80 percent as the overall some time,”West said. products such as gasoline than light oil, BP production rate ramped up. Assuming that the initial well configura- expects the North Slope heavy oil to sell at The initial testing used adapted convention works successfully,the team will try about $9 per barrel below the regular tional oilfield equipment to process the to improve flow rates — higher than nor- price for Alaska North Slope crude. But at material drawn from the well. But the next mal cold heavy oil production rates will be current oil prices, the economics look test will involve the installation of a long- needed to offset high Alaska well costs. good,West said. term test kit consisting of processing The technique of choice for flow rate opti- And BP’s strategy for its North Slope equipment purpose built for handling mization is the use of multilateral horizon- production is to bolster overall fluid oil heavy oil. Sand separated from the oil will tal wells but no one knows whether the production by bringing heavy oil on line. be disposed through the Prudhoe Bay sand production will work through hori- “Without the heavy oil the future of grind and inject facility.(The facility pulver- zontal well bores. Alaska is very much one of diminishing izes all solid well drilling wastes and re- “No one has yet determined how you light oil, but then gas coming on big,”West injects them into confined formations deep can pull sand along a horizontal well,”West said.“But with heavy oil you … have a in the earth.) said.“That’s our technology challenge.” rejuvenation of the fluids business for The testing will also involve drilling And one key factor will be the use of Alaska, and it becomes as much a fluids three new wells and the total cost of the good reservoir imaging from seismic data future as a gas future.” phase one project will be $68 million. to enable precise well placement. “This to me is the next big oil boom,” Phase two will involve an additional “In Alberta they have a 40 percent Encelewski said.“… This is a domestic extension to S-pad, the drilling of four more (CHOPS) well failure rate,”West said. project that’s under our noses.” ◆ 110 Harnessing a Giant: 40 Years at Prudhoe Bay

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By Nancy Pounds statehood in 1959. But Prudhoe Bay helped my was absolutely transformed,”Banks said. For Petroleum News change that scene. Also, there would be no trans-Alaska oil According to Cole’s report, Prudhoe Bay pipeline without Prudhoe Bay,he added. laska’s economy would be much differ- oil exponentially eclipsed the value pro- Goldsmith compiled a report in spring A ent without the discovery and devel- duced from Alaska’s other resources.“From 2008 detailing the economic impacts of the opment of Prudhoe Bay.Economists, indus- 1867 to 1958, about $40 billion (in 2002 North Slope oil industry.In 30 years, the try officials and prominent Alaskans say the dollars) worth of fur, gold, copper and North Slope has produced 15 billion barrels economic effects of the state’s major oil dis- salmon came out of Alaska in waves. … But of oil, according to Goldsmith’s research. covery are far-reaching and dramatic.The everything that came before pales in com- That volume tallied up to $378 billion — in one event, in fact, has parison with the value of oil. From 1959 2007 dollars — based on value at the well- proven to be the spark through 2002,Alaska produced resources head.That would equal 5,400 of BP’s for an economic trans- valued at nearly $350 billion. More than 80 Anchorage high-rise headquarters, based on formation of the 49th percent was from Prudhoe Bay oil.” recent tax assessment of $70 million. state. And North Slope oil has landed $118 bil- Prudhoe Bay launches Prudhoe Bay’s discov- lion in cumulative revenue to the State of revenue bonanza ery and subsequent pro- Alaska, Goldsmith cited. One more “billion” duction even touch The development of Prudhoe Bay led to is connected to North Slope oil, according every Alaskan today in the development of other North Slope oil to Goldsmith’s report — the value of the the form of the annual fields, said Scott Goldsmith, economics pro- Alaska Permanent Fund was $36 billion in SCOTT GOLDSMITH Permanent Fund divi- fessor at the University of Alaska mid-summer 2008. dend, paid from a public savings account Anchorage’s Institute of Social and Prudhoe Bay has landed billions of dol- created with oil revenues paid to the state. Economic Research. lars in state government coffers. Terrence Cole, a history professor at the “If it weren’t for Prudhoe Bay there “Prudhoe Bay alone has produced rough- University of Alaska Fairbanks, published an wouldn’t be anything else going on (on ly $23 billion in royalties (for) the state from article, summarized by the Institute of Social North Slope),”he said.“It’s hard to imagine first production through December 2007,” and Economic Research, in 2004 document- Alaska without oil.” said Cody Rice, a petroleum economist with ing Prudhoe Bay oil’s economic impact. Kevin Banks, director of the state the Division of Oil and Gas.The total is not “Prudhoe Bay oil was worth more than Division of Oil and Gas, agreed.“Without adjusted for 2008 dollar value, though. everything that has been dug out, cut Prudhoe Bay,there probably wouldn’t have The State of Alaska also received about down, caught or killed in Alaska since the been a North Slope (oil industry),”Banks $27 billion in taxes from North Slope oil beginning of time,”Cole wrote.“The discov- said. fields through 2007, Rice noted. ery of the Prudhoe Bay oil field in the late Cook Inlet oil production was under That’s a total of $50 billion. But how 1960s fulfilled even the most optimistic way at the time, but was not a significant much money is $50 billion? dreams for statehood.” economic force, Banks said.The state’s oil With that sum, the state could pay annu- Cole details a fledgling Alaska that was industry was a minor factor until the al base salaries of $52,428 to 5,000 Alaska struggling financially,both before and after Prudhoe Bay discovery … “then the econo- State Troopers for more than 190 years. Or 112 Harnessing a Giant: 40 Years at Prudhoe Bay it could underwrite the cost of 500 new hiked to Fairbanks, where he found a boom- 200,000-square-foot Dena’ina Convention Alaska Permanent Fund town economy during pipeline construc- Centers, based on Anchorage’s current con- Total Assets tion. He was intrigued by the dynamics of struction cost estimates of about $100 mil- 2008 ...... $36.1 billion the economy,returning to the state in 1982 lion each. 2007 ...... $45.4 billion and researching the state’s economic data 2006 ...... $42.7 billion with Goldsmith. Prudhoe paid lion’s share of revenue 2005 ...... $36.3 billion “It’s been a pretty wild ride,”Banks said According to Goldsmith, the petroleum 2000 ...... $28.1 billion of Alaska’s dramatic economic changes. industry contributed 87 percent of state 1998 ...... $25 billion Revenue to the state climbed drastically general fund revenue in fiscal year 2007 1995 ...... $15.8 billion between first oil production in 1977 and alone.Thanks to Prudhoe Bay,the state has 1993 ...... $15 billion 1982 – only five years, Banks said. Funds collected a similar percentage every year for 1989 ...... $10 billion spawned state programs like the Alaska the past 30 years. 1984 ...... $ 5 billion Housing Finance Corp. and construction This means Alaska’s other industries 1980 ...... $1.8 billion projects that reshaped communities like the “have been able to enjoy a very light tax 1977 ...... $734,000 Alaska Center for the Performing Arts and burden,”he said.Also, without the oil indus- the Sullivan Arena, both in Anchorage. try,Alaska’s other main sectors like fishing Source: Alaska Permanent Fund Corp. “We would not have been a state with- and tourism, would be less competitive out the discovery of oil on the Swanson internationally and would lack infrastruc- River,”said Banks, who has worked for the much as the Permanent Fund. ture purchased with oil-industry-infused state since 1991 and served as division “This illustrates the ‘opportunity cost’ of state funds, Goldsmith said.These effects are director for nearly two years.“We would not the Permanent Fund distribution that is difficult to quantify and often overlooked, be the state we are without Prudhoe Bay.” what we alternatively could have had,”he he observed. Three players active at Prudhoe Bay’s dis- explained. The Alaska oil industry also helps stabi- covery,– predecessors to BP,ExxonMobil That $35 billion would pay out more lize the state’s work force year-round, so the and ConocoPhillips – are still North Slope than 21 million dividend checks, based on labor market isn’t skewed by seasonal jobs, powerhouses, he said. Banks now sees other the 2007 dividend amount of $1,654. and the oil sector adds high-paying jobs, companies pursuing Alaska oil develop- Prudhoe Bay also lifted a huge income Goldsmith said. ment, and he often recalls policies precipi- tax burden from the shoulders of Alaskans. Another way oil development has tated by Prudhoe Bay beginnings. The state repealed its income tax in 1980 buoyed the state economy is by what Banks cited spin-off effects of the North amid oil industry payouts to the govern- Goldsmith describes as “wealth creation.” Slope oil industry,including a strong service ment and has never had to reinstate it. The chief component is the Permanent sector supporting the industry.Also,Alaska’s Goldsmith estimates Alaskans would have Fund dividend.To quantify the dollar-power commercial air freight business has grown had to pay an average of 34 percent in per- of these dividends, Goldsmith said, if all the largely due to available jet fuel manufac- sonal income tax — since 1970 — to gener- money distributed as dividends had been tured by Tesoro and Flint Hills, Banks said. ate the same amount of state revenue for placed in a separate pot called ‘Son of the the general fund as the petroleum industry. Permanent fund,’and invested in the same A 30-year economic tale kinds of assets as the Permanent Fund, itself, Oil revenue fuels projects, industries Alaska’s economic story from 1977 to and all the earnings reinvested, that fund the present shows unprecedented changes, today would be worth $35 billion, almost as Division of Oil and Gas director Banks first arrived in Alaska in 1975.He had hitch- see TRANSFORMATION page 114 Harnessing a Giant: 40 Years at Prudhoe Bay 113

Report: Oil industry crucial in Alaska economy A recent statewide report details the major role the oil industry plays in Alaska. 40-years40-years ofof The Alaska Oil & Gas Association in summer 2008 released,“The Role of the Oil and Gas Industry in Alaska’s Economy.”The report was compiled by Information Insights PrudhoePrudhoe BayBay of Fairbanks and Anchorage and the McDowell Group of Juneau and Anchorage. Among the report’s findings: havehave mademade The industry is the state’s largest nongovernmental industry.It generates 12 percent of private sector jobs in the state and 21 percent of private sector payroll. itit possiblepossible forfor Oil and gas activity creates 41,744 jobs from various parts of the industry and related sectors or 9 percent of all Alaska to grow employment statewide. Alaska to grow Oil industry wages tally $2.4 billion, or 11 percent of all Alaska wages. andand prosper.prosper. AOGA officials believe the most important aspect of the report is that it shows the industry’s economic benefit to the entire state. “It confirms what all of us believe to be true,”said Marilyn Crockett,AOGA’s executive director.“The oil and gas industry has been and continues to be a dri- MARILYN CROCKETT ving force in the Alaska economy.” Crockett cited report findings showing total oil revenue sent to the state in the last four years. Projected total revenue for fiscal year 2008, which ended June 30, could tally $10 billion, doubling 2007’s figure.The dramatic increase is due to a new production tax and high crude oil prices, Crockett said. The oil industry registers the highest wage average in Alaska.“The average primary company pays a monthly wage of $12,737 — 3.5 times higher than the statewide average of $3, 627,”according to the report.

Oil important to regional economies Northrim salutes the explorers, The industry plays a strong role in major regions of the producers, laborers and small Alaska state, including the Municipality of Anchorage, the Fairbanks North Star Borough, Kenai Peninsula Borough, Matanuska- businesses who made it possible. We Susitna Borough, North Slope Borough and Valdez area.The industry generates more payroll than any other nongovern- will continue to be a leading lender mental industry in Anchorage, Fairbanks, the Kenai area, the to the oil and gas industry for the North Slope and Valdez.The oil and gas industry comes in second-place in the Matanuska-Susitna Valley,behind the ser- next 40 years. vice industry. This regional breakdown is another key point from the report, Crockett said. It helps people understand the significance of the oil and gas industry in their community and makes it more personal, Crockett said. In Anchorage, the industry directly employed 1,649 residents in oil and gas extraction, refinery and pipeline sectors. Combined wages total almost $295 million. In the Fairbanks borough, the industry directly employed 353 residents with a payroll of $39 million www.northrim.com 562-0062 In the Kenai borough, the industry directly employed 939 Statewide 1-800-478-2265 residents with associated wages of $99 million. Member FDIC see INDUSTRY page 114 Equal Opportunity Lender 114 Harnessing a Giant: 40 Years at Prudhoe Bay continued from page 112 dynamic expansion of any five-year period Oil: A player for the future TRANSFORMATION in Alaska’s history,”Fried said. In those five Goldsmith’s presentation,“How North years, the population grew by 120,000 — a Slope oil has transformed Alaska’s econo- peaking with a 1980s boom followed by a five-year record that has never been repeat- my,”is relevant today.“People don’t under- late 1980s bust and steady growth and ed — and the work force increased by stand the importance of oil to the econo- recovery into the new century. 60,000, he wrote. my,”he said.“We would be a very different State labor economist Neal Fried detailed “This period of hyper-growth would be place without oil. It would transform the the changes in a September 2007 Alaska short-lived, and its aftermath continues to whole economy – not just by fewer jobs.” Economic Trends article,“Alaska’s economy haunt Alaska’s economic psyche,”Fried said. Goldsmith foresees strong potential for transformed:Thirty years of the trans-Alaska Oil prices fell and state government cut the oil and gas industry in Alaska,especially oil pipeline.” more than $1 billion from its budget in a with development of huge heavy oil accu- Other industries like tourism, fishing and year. Real estate and construction industries mulations in the Prudhoe Bay area and the mining contributed to the state’s economic had outpaced demand and crumbled in the field’s vast natural gas reserves. changes in that era, Fried writes.“But then downturn. Adds Goldsmith:“Petroleum will contin- again, there is little doubt that without the “In 1986 and 1987,Alaska lost more than ue to be the largest and most important pri- discovery of oil on the North Slope,Alaska’s 20,000 jobs. Between 1985 and 1989, vate industry in the state for a long time to economy would be vastly different today.” 44,000 more people left Alaska than come.” ◆ Fried compared key factors in 1977 and arrived,”he said. 2007.Alaska’s work force tripled in that The economy started to recover in 1988 time. Payroll going to workers rose from and has grown every year since then, repre- continued from page 113 $3.5 billion to $13 billion.The gross state senting the “the longest period of uninter- product grew from $8 billion to $39 billion, rupted growth in the state’s history,”Fried INDUSTRY according to the report.Alaskans generated wrote. However, the economy was forever Matanuska-Susitna borough resi- $5 billion in personal income, compared to changed in population and employment dents work for the industry outside $25 billion for 2007. In 1977, 412,000 peo- levels. Growth, though, comes at a slower the area.About 830 residents work in ple lived in the state compared to 670,000 pace than before. the industry with wages of $98 mil- Alaskans today. “From 1959 to 1987, employment in lion. “Nearly every aspect of the state’s econo- Alaska grew by nearly 6 percent per year In Valdez, the industry directly my grew at breakneck speed during the versus 2 percent during the most recent employed 284 people with associated first five years of the 1980s,”according to expansionary period,”he said. wages of $35 million. Fried.“The biggest boom Alaska would Fried believes other industries rather The North Slope is home to the experience began around the same time than oil have been factors in economic majority of oil and gas work, but the billionth barrel of oil came out of the growth in the past 20 years. In that period, employment and spending mostly ground in January 1980.”Oil prices doubled oil production began declining, and the occurs elsewhere in the state, the that year, and the state’s budget doubled in price of oil per barrel was below $15 in the report concluded. However, signifi- one year, from $1.6 billion in 1980 to $3.4 1990s, he said. cant tax revenues flow to the bor- billion in 1981. The state economist wrapped up his ough. The spending spree peaked in 1985.“It report by hinting at another major econom- —Nancy Pounds created a demand for goods and services ic factor on the horizon, again coming from that acted as the catalyst for the most Prudhoe Bay – the proposed trans-gas pipeline. Harnessing a Giant: 40 Years at Prudhoe Bay 115 116 Harnessing a Giant: 40 Years at Prudhoe Bay Prudhoe discovery transforms ARCO, BP Giant North Slope field helped shape development of international oil and gas companies

Geologists and By Nancy Pounds geophysicists use For Petroleum News technologically sophisticated methods, includ- he discovery of oil at Prudhoe Bay ing CAT scans and T positively altered the fortunes of magnetic reso- British Petroleum and Atlantic nance imaging, to locate and mea- Richfield Co., major international oil

sure underground (ALASKA) INC. BP EXPLORATION producers. structures that ARCO, except for its Alaska opera- may contain oil. tions, was acquired by BP in 1999. They feed data into computer ARCO Alaska Inc. was sold to Phillips models to create Petroleum Co. at the same time, and three-dimensional Phillips is now a part of pictures of these ConocoPhillips Inc.ARCO’s Prudhoe underground formations. Here BP Bay story is part of this combined Exploration company’s history. (Alaska) Inc. scien- But it was ARCO predecessor tists analyze the Richfield Oil Co. that started it all with imagery in hopes of identifying its success at drilling an exploratory pockets of oil well at Swanson River in the Kenai untapped oil. Wildlife Refuge in the 1950s. As one Associated Press story put it: “Richfield’s discoveries put Alaska on oil map.”The news article detailed the significance of both Prudhoe and Alaska to the company. “The success at Swanson River marked the beginning of a four-decade relationship that produced huge riches Harnessing a Giant: 40 Years at Prudhoe Bay 117 for both the state and the North America today and the Inc.’s manger for strategy and The only reason BP company whose name had second-largest fuels marketer. planning. was in Alaska was been changed to Atlantic “BP was radically affected Advanced technology con- Richfield Co. when it discov- in a positive fashion,”said for- tinues to increase the amount because it was search- ered the real bonanza — mer BP executive Roger of total production and pro- ing for a U.S.“super- Prudhoe Bay, the largest oil Herrera in a recent interview. long the oil field’s life, Bilbao giant,” which would field ever found in North In the 1960s BP controlled said. He cited future opportu- America,”according to the a significant percentage of the nities in production of heavy support BP’s entry into article world’s oil, he said.The com- oil and other crudes. selling gas at the “You could say Alaska pany had become adept at But in 1968, both compa- pump in America, made ARCO, and ARCO cer- finding “super-giant” oil fields nies had been ready to aban- tainly had a pervasive impact by then, he said. don years of exploratory work Herrera said. on the state,”said Gil Mull, a The only reason BP was in on the North Slope before “At that time Alaska former Richfield geologist, in Alaska was because it was one final test produced signs was virtually unex- the article. searching for a U.S.“super- of a massive oil field at giant,”which would support Prudhoe Bay. ◆ plored,” he recalled. Field gives BP BP’s entry into selling gas at foothold in America the pump in America, he said. BP also reaped huge bene- “At that time Alaska was fits from Prudhoe Bay. virtually unexplored,”he “In the last 50 years, we’ve recalled. become the largest oil and gas The oil field’s history has producer in the United States, proven to be successful, and but it all started with Prudhoe Prudhoe Bay powers on into Bay,Alaska,”BP says on its Web the future for Alaska and its site. By 2001, BP had become operators. the largest oil and gas produc- “Prudhoe Bay continues to er and one of the largest gaso- be a large part of the answer line retailers in the United for the companies that own States.The company is the and operate it,”said Damian second-largest refiner in Bilbao, BP Exploration Alaska 118 Harnessing a Giant: 40 Years at Prudhoe Bay What would Alaska look like without oil industry? Economist says 49th state would bear strong resemblance to East Coast state of Maine

By Nancy Pounds protection,”Goldsmith wrote.“The state has For Petroleum News A Sharp Contrast come to rely heavily on tourism, small man- A comparison of the effects of Prudhoe ufacturing enterprises and defense-related ithout the oil industry as an eco- Bay and North Slope oil production on activities and installations for much of its Wnomic power-player,Alaska might residents of Alaska with the lack of such economic base.” resemble Maine — more taxes, no resources in Maine.* Economic factors emphasize the differ- Permanent Fund dividend, an older popula- ence between Maine and Alaska,Goldsmith tion with slower growth and a much- Maine Alaska noted, citing recent data.While Alaska ranks Wages $54,550 $72,750 reduced gross state product. seventh nationwide in gross state produce Taxes -$6,810 $0 Scott Goldsmith, economics professor at per capita, Maine is 43rd.The median pay- Dividend $0 $6,800 the University of Alaska Anchorage’s check in Maine is 77 percent as high as the Public median paycheck in Alaska.Alaska’s job Institute of Social and Economic Research, Spending $28,868 $49,064 suggests the comparison in his spring 2008 growth exceeded Maine’s in recent statis- report,“How North Slope oil has trans- TOTAL $75,607 $128,614 tics.Alaska ranked fifth nationwide in popu- formed Alaska’s economy.” lation growth, while Maine was 46th. “The idea here is to conduct a thought Difference +$53,007 Maine’s projected population growth is experiment a la Einstein to think about only one-third of the U.S. average, but what state Alaska would most resemble if * Figures calculated based on a family of four Alaska’s population should grow 30 percent more than the national average, oil had never been found on the North SOURCE: Scott Goldsmith, University of Alaska Slope,”Goldsmith said. Anchorage Institute of Social and Economic Research; Goldsmith cited. Both states have many moose, few 2007 data Unlike Alaska,Maine is physically humans, a cold climate, a remote location attached to the continental United States. and an independent streak, Goldsmith said. Another difference from Alaska is that The two states also find strength from funds, Goldsmith said.Alaskans and Maine Maine’s Native American population is identical industries: fishing, tourism, timber, residents possess “conflicting visions about much lower, registering 1 percent, mining and agriculture, he noted. Maine the use of resources,”he said. Goldsmith figured.Also, the federal govern- and Alaska are both constrained by limits Maine and Alaska are different, however, ment owns much less land in Maine, about on sustainable harvests, from the fishing according to Goldsmith’s research. 1 percent, than it does in Alaska. industry,for example. Both states have “Throughout the second half of the Maine residents pay state income tax, small and declining manufacturing indus- 20th century,Maine has struggled to find a unlike Alaskans.And Alaskans, not Mainiacs, tries, and the states depend on federal proper balance between resource-based industrial development and environmental see STATE page 120 Harnessing a Giant: 40 Years at Prudhoe Bay 119 Field fuels nation Importance of Prudhoe Bay to U.S. oil production cannot be overestimated; field will support future heavy oil, natural gas output

By Nancy Pounds For Petroleum News A tour bus for Prudhoe Bay Tours (run by Wien Consolidated Airlines) stops rudhoe Bay production has been a at an oil drilling rig in the Ppowerful force for the United States. Prudhoe Bay oil field, with The field’s oil has long been a strong con- tourists at right in the early tributor to total U.S. oil production.And 1970s. Throughout its 40- year history, the field has energy experts predict Prudhoe Bay and its been a consistent draw for North Slope counterparts will continue a wide range of tourists, producing into the future. from politicians and foreign dignitaries to ordinary citi- Historically,the Prudhoe Bay discovery zens curious about Alaska was important to America amid the world North Slope oil fields. oil crisis of the 1970s. “It had a profound effect on the American government, on how they dealt with the crisis,”recalled Roger Herrera, a former BP geologist and company execu- FRANK H. WHALEY, WIEN COLLECTION,ARCHIVES ALASKA OF STATE tive. He now works as a consultant for Arctic Power. Prudhoe Bay,at the time, had an estimated 9.6 billion barrels of recoverable oil.This fact helped the nation deal with oil crises imposed by Middle Eastern oil producers, he said.The first oil crisis was in 1973, fol- America’s oil production peaked and August 2007 report. lowed by another one in 1979, Herrera declined, he added.“The discovery of Brent Sheets, regional manager for the noted. Prudhoe Bay oil began production in Prudhoe Bay was a godsend to the Energy Department’s National Energy 1977. American government.” Technology Laboratory Arctic Energy “Prudhoe was hugely important in those Office in Fairbanks, co-authored:“Alaska days,”Herrera said. One-fourth of U.S. oil at peak North Slope Oil and Gas:A promising “I think what everyone has to remem- At its peak of production in 1988, future or an area in decline?” ber is that before 1973, small-scale produc- Prudhoe Bay and the North Slope account- Prudhoe Bay is significant in size as the tion in the U.S. was the status quo,”he said. ed for 25 percent of total U.S. oil produc- Oil prices climbed in the 1970s, and tion, according to a Department of Energy see FUTURE page 120 120 Harnessing a Giant: 40 Years at Prudhoe Bay continued from page 118 Gas Division’s Office of Integrated Analysis STATE continued from page 119 and Forecasting. FUTURE “The discovery of Prudhoe Bay opened the entire North Slope of Alaska to oil and largest oil accumulation in North America gas development by providing a pool of oil and as a catalyst for “the grassroots develop- receive the annual Permanent Fund and natural gas large enough to justify the ment of a petroleum infrastructure on dividend, paid out from an investment building of a trans-Alaska oil pipeline and Alaska’s remote North Slope,”Sheets said. fund created with oil money paid eventually a natural gas pipeline,”Budzik Development of Prudhoe Bay required ($2,069 in 2008) to the state. said. construction of the trans-Alaska oil “If the oil industry had never been Prudhoe Bay is responsible for all the oil pipeline, production facilities, crew quar- here, we wouldn’t have those things development on the North Slope, which ters and other facilities, the Energy (like the Permanent Fund and its divi- amounts to 15.4 billion barrels produced Department report noted.This infrastruc- dend),”Goldsmith said.“We would through 2006, and another 6 billion barrels ture allowed for additional development on look different.” ◆ that are currently expected to be pro- the North Slope. duced, not including new discoveries, to Those oil efforts are important for the total 21.4 billion barrels, Budzik said. nation today. The region holds more room for “All these Alaska North Slope develop- “The total Alaska North Slope — not just exploratory wells, he said. ments, both past and future, pivoted on the Prudhoe Bay — still produces about 15 “Alaska’s fossil energy resources will development of Prudhoe Bay,”he said.“In percent of the U.S. domestic oil production likely play a greater role in meeting the other words, without Prudhoe Bay,North almost 30 years after startup of production nation’s energy needs in the future,”Sheets Slope oil and gas … production wouldn’t in 1977,”Sheets said. said.“Alaska holds about one-fifth of have taken place.” Advanced technology and reduced costs America’s remaining proved oil reserves, a Budzik estimates Prudhoe Bay natural have allowed “this major oil production significant portion of its natural gas gas resources at 23 trillion cubic feet — one province to sustain a major role in the reserves and over half of its coal resources. year’s worth of total U.S. gas consumption. nation’s energy supplies,”Sheets said. When North Slope unconventional resources such as viscous oil and methane “Prudhoe Bay natural gas resources will Prudhoe Bay’s upcoming role hydrates are factored in, the potential is be the anchor field for the development of a 4.5-billion-cubic-feet-per-day pipeline to “Prudhoe Bay may have been discov- incredible.” Phil Budzik, of the U.S. Energy the Lower 48,”Budzik said.“Development ered 40 years ago, but from an exploration of Prudhoe Bay as an oil field paved the perspective, the North Slope is not a Information Administration, echoes Sheets’ assessment of Prudhoe Bay’s significance way for the development of a gas mature petroleum province,”Sheets said. ◆ for the nation. Budzik works in the Oil and pipeline.” Harnessing a Giant: 40 Years at Prudhoe Bay 121 122 Harnessing a Giant: 40 Years at Prudhoe Bay

A view of the Prudhoe Bay State No. 1 discovery well at sunrise/sunset in early February 1968. The giant oil field’s discovery and development might have taken an entirely different route if 21st Century technology

had been available in the 1960s. C.G. “GIL” MULL

A whole different ballgame If 21st century technology had been available in the 1960s, would discovery, development of Prudhoe Bay have been different?

By Ken Boyd State of Alaska.This selection was made in ny of that era. Of course there were no cell For Petroleum News 1961 and was based predominantly on phones or satellite communications.There regional geology.The selection, after a lot of were no global positioning systems and no he discovery of the Prudhoe Bay oil stressful debate, became final in 1964. accurate maps.There were no roads and a T field has a long and colorful history as very limited amount of access by airplane. detailed elsewhere in this publication. Primitive seismic Now the stage is set. But what if Prudhoe had not been dis- Let’s look at the early seismic work as it covered using only the technology avail- was done in the mid-1960s. Compared to Lease sales a question able 40 years ago? What seismic technology today,the early North Rather than move Prudhoe Bay (in the if we were able to trans- Slope explorers were working with the mid-1960s) into the future, let’s move port today’s oilfield tech- equivalent of stone tools. today’s technology into the past. nology back to the mid- The single-fold data (where each point At that time, all the information available 1960s? How would the in the subsurface is only sampled once) consisted of some primitive maps and a exploration and devel- they acquired was primitive even by the vague notion of the regional geology.Oil opment of the largest oil standards of the time. Common Depth had been discovered in Cook Inlet and field in North America Point seismic (where a point in the subsur- companies were excited about moving for- have changed using face is sampled multiple times) was being ward with exploration on the North Slope. modern technology and KEN BOYD widely used in other areas, but not on the Even with the limited knowledge available what might Prudhoe North Slope. Because of this limitation, it (and virtually no infrastructure), it was time look like today? was nearly impossible to separate the seis- for the State to lease some land on the In order to think this proposition mic signal from the background noise. In North Slope. through, we need to make some assump- addition, it was difficult to account for the Alaska’s state oil and gas lease sales 13 tions. Let’s assume that the early explo- sound-altering permafrost, and accurately and 14 were held in 1964 and 1965. Most ration took place as it did; much of this locating the position of geologic faults was of the (future) producing lands at Prudhoe exploration was done by the United States hopeless. Bay were picked up by a few companies as Geological Survey and a lot of that work Despite these obstacles, the early subsur- partners, notably British Petroleum, focused on the Naval Petroleum Reserve face maps of the area did provide a reason- Richfield Co. (now ConocoPhillips), and No. 4 (now NPR-A). ably accurate picture of the Prudhoe Bay Humble Oil & Refining Co. (now Let’s further assume that Tom Marshall structure. ExxonMobil).The agreement between read the same article in Fortune magazine Not only were there no computers in Richfield and Humble was finalized late in in 1957 and came to Alaska the following the field, there also were no electronic the fall of 1964, not long before the first year.Thus Tom, despite overwhelming hand-held calculators.The computing North Slope sale No. 13. opposition, selected the lands that contain power on our desks today far exceeds that State Lease Sale 18, held in 1967, drew the Prudhoe Bay field for the brand-new available to the most sophisticated compa- limited interest because of the repeated Harnessing a Giant: 40 Years at Prudhoe Bay 123 exploration failures that that were working on the plagued the North Slope during North Slope had access to those years.These were the last these data.What would the lease sales prior to the discov- effect on those three lease sales ery of the Prudhoe Bay field in have been? 1968 by Richfield and Humble. Up to this point companies Bonus payments for these three had to rely on single-fold 2-D lease sales totaled less than $15 data.They could not correct for million. near-surface “statics” (like per- Of course none of these mafrost) that distorted the seis- companies knew exactly what mic signal.The sections were they were leasing, or that they full of noise that could not be were getting one of the best eliminated.The faults were all deals of all time.The subsurface poorly known, or were mapped maps they were using as a in the wrong place in the sub- guide look, today,like scribbles surface. Modern 3-D seismic on a cocktail napkin. Partners (and the computer wizardry Richfield and Humble appeared that goes along with it) elimi- to have won the best tracts on nates or reduces all these prob- the top of the structure, while lems.A simplistic analogy BP was relegated to the flanks. would be to compare an out-of- Nobody knew about the huge focus X-ray with a CAT-Scan. gas cap and the fact that over Suddenly,a lot more subsurface half of the oil was actually on detail was available to the the BP acreage. explorer. The exploration of the mid- With modern 3-D seismic 1960s, which resulted in at available, the structure at least 10 dry holes being drilled, Prudhoe Bay becomes pretty led many companies to simply clear; the big geologic features give up the search.The produc- are exposed and even the ers at Prudhoe Bay today are details of the fault patterns can there because they persevered be understood. But 3-D seismic, through unrelenting disappoint- as good as it is, still has one ment and hardship.They took shortcoming that has yet to be enormous risks.The list of com- undone: it cannot directly dis- panies that walked away is cern liquid or gas in the subsur- long. face.There are hints to be sure; things like “bright spots”,“dim Impact on industry spots” and “flat spots” all pro- decisions vide tantalizing clues. What would have been the Sophisticated modeling helps outcome of these sales if the predict the presence of liquids exploration technology we and gas, but drilling is still the have today had been available only true test. then? Again,I will assume that Different outcome likely companies had done some primitive seismic and had made My guess is the bidding some preliminary maps.They would have been more com- knew,roughly,that there was prehensive at the first sale and some kind of big structure near perhaps the two subsequent Prudhoe Bay.But they had sales would not have been drilled a lot of dry holes and needed. I wonder if the partner- patience was wearing thin in ship of Richfield and Humble the company boardrooms. would have happened. Perhaps Money for further exploration there would have been other was drying up. partnerships given that the But what if, prior to Lease additional information might Sale 13, companies were able have emboldened management to obtain modern 3-D seismic from other companies to par- data along with the computing ticipate. On the other hand, the power to process those data. new seismic would have Let’s assume all the companies shown the real complexity of 124 Harnessing a Giant: 40 Years at Prudhoe Bay BP EXPLORATION (ALASKA) INC. BP EXPLORATION

The Prudhoe Bay oil field production facilities are situated on Alaska’s North Slope, a flat, treeless plain that covers 88,000 square miles, an area slightly larger than Idaho. Prudhoe Bay is the largest oil field in North America and ranks among the 20 largest fields ever discovered worldwide. Of the 25 billion barrels of original oil in place, more than 15 billion barrels can be recovered with current technology.

Prudhoe; it would now be clear that it is In 1967 the drill bit on the end of the More accurate recovery estimate much more than a simple, big anticline.The drill pipe had one basic purpose: to make a All this new technology would have fault patterns and stratigraphy,now seen hole in the ground.Today,sophisticated played an important role in the early days clearly,may have given some companies Measurement While Drilling tools are avail- of the Prudhoe Bay field. More would have pause for concern. So far the only wells able to go along with the bit.While drilling, been known sooner.The size of the field drilled were dry holes, and there were no well information regarding the various rock might be better known. Originally thought wells in the Prudhoe structure itself. formations is transmitted in real-time to the to contain 9 billion recoverable barrels, the Even if the same players prevailed, we explorationist.And, of course, we have pro- field’s crude recovery number would have are left to wonder if the gas cap could have vided our 1960s explorer with all the com- become larger earlier in the game.This been discerned prior to the sale. Had the puter firepower we have today to analyze might have had some effect on the missing Richfield-Humble partnership known about these data. piece in 1968: a way to get the oil to mar- the gas cap prior to the sale, I presume It is also likely that the initial well would ket.There was no pipeline. there would have been more spirited bid- have delivered more than merely a single The building of the pipeline certainly ding on the flank acreage and less interest hole in the ground. Using multilateral would have benefited from new technolo- on top of the structure.The oil-rim/gas cap drilling perhaps four or five well-bores gy and better materials, etc.Whether the ownership remained a divisive issue until could be drilled from the initial location.A pipeline would have been built earlier or the merger in the late 1990s. Only then did confirmation well would still be drilled, but better, I will leave as an exercise for the common equity (an equal division of inter- the most advantageous location for that reader. I presume that, one way or another, est in oil and gas) come to the Prudhoe Bay well would be more certain. Extended the pipeline gets built. field. Had the companies understood the reach wells could be drilled from the same Prudhoe Bay structure with more certainty, pad. In sum, a lot more would be known More responsive to environment perhaps this important milestone could about Prudhoe early in the drilling pro- Naturally,along with all this marvelous have taken place earlier. gram. 21st century technical equipment and tech- Using the results of the early wells, in nology,we also would expect an increased Effects of drilling advances conjunction with the subsurface mapping awareness of the environment and a need derived from the 3-D seismic data, relatively In addition to the new seismic tech- to decrease the impacts of drilling and accurate predictions could be made about niques, we are also transporting our 21st associated activities. the entire field. Rock types and reservoir century drilling technology back to 1967. The availability of 3-D seismic technolo- quality would be able to be discerned with Now that the lease sales are over, it is time gy means fewer wells need to be drilled some certainty.Additional productive for- to drill the first well.Atlantic Richfield since these data provide so much addition- mations, which would not be known for (Atlantic and Richfield merged after the al subsurface information.There are fewer years using “old”technology,would be dis- lease sales) and Humble might drill the dis- dry holes drilled and the wells that are covered earlier.The Kuparuk formation covery well in a different location, but that drilled will evaluate more of the subsurface would likely have been identified, under- is probably of little consequence.The dis- and will provide much more geologic infor- stood (and developed) earlier and other covery well, wherever it was drilled, would mation. parts of Prudhoe (Point McIntyre, Niakuk, not likely have been a single straight hole Of course all the seismic data is and others) also would have gotten earlier (which was all that could be accomplished acquired in the winter and thus has virtual- scrutiny.Heavy oil development might have back then). ly no impact on the underlying tundra. gotten an earlier start. Harnessing a Giant: 40 Years at Prudhoe Bay 125

Vibroseis, a seismic technique that uses a amination problems due to leakage from the surface of pads using earlier technolo- specialized vehicle to transmit sound waves the reserve pits. Exploration drilling is done gy.Because of multilateral, horizontal and into the ground without any disturbance, is entirely from ice pads which are accessed extended reach drilling techniques avail- used exclusively.No more seismic surveys by ice roads.At the end of the drilling sea- able today,much more oil could be pro- use dynamite as a sound source and bull- son, there is no trace of the winter drilling duced with a much smaller surface foot- dozers no longer tear up the tundra.All operation. print. support vehicles have very low-pressure Alpine, the ConocoPhillips-Anadarko Infrastructure and well spacing tires specially designed to leave no remnant field near the Colville River west of footprint. Prudhoe Bay is the largest oil field in Prudhoe, is an example of the application North America and one of the largest in of this technology.At Alpine,500 million Better drilling rigs the world. Developing a field of this size barrels of oil is being produced from a The drilling rigs themselves are lighter, requires a certain amount of infrastructure gravel pad that covers less than 100 acres. stronger and more easily transportable. including wells, well pads, pipelines, gath- This is only possible using technology that They are safer as a result of years of Arctic ering centers and employee housing. has evolved in the last 15 years. drilling experience.All are equipped with These requirements would not change at least one blowout preventer.The mud simply because new technology was avail- Smaller, less-intrusive oil fields systems are more sophisticated and the able, but technology would certainly The discovery of oil in Cook Inlet in real-time monitoring of subsurface pressure reduce the amount of infrastructure need- 1957 certainly helped Alaska achieve state- has advanced to a point that blowouts are ed. virtually unknown.The mud itself, an A visitor to Prudhoe today sees row hood. Just as certainly,the discovery of the important drilling component needed for after row of wells, all spaced fairly far giant Prudhoe Bay field shaped, and con- lubrication and pressure control, now has a apart.This is because most early wells at tinues to shape,Alaska’s future. Prudhoe benign chemical composition. Prudhoe were drilled as straight holes, and Bay remains a testimony to the ingenuity Reserve pits have been eliminated. Once it took a lot of wells to delineate the field and determination of those who brought a staple of North Slope exploration drilling, and develop the oil. this field into production despite over- these big pits were used to dispose of the Done with technology available today, whelming obstacles. But there will be no mud and cuttings from the well. Now these the picture would be much different. I more Prudhoe Bays. New technology and well-wastes are ground into a paste and re- would envision a series of small develop- a heightened awareness of the environ- injected back down the well bore.This ment “islands”,each with a few wells.The ment means that future fields on the decreases the size of the drilling “footprint” wells would be very close together on a North Slope will be smaller, environmen- dramatically and eliminates any future cont- gravel pad perhaps covering 15 percent of tally sound and safer. ◆ 126 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 127 Prudhoe Bay’s legacy

“... if we can live and work here, in these conditions, we can go to Mars.” —Comment by Apollo 17 astronaut Harrison Schmitt, after a tour of Prudhoe Bay in mid-winter C.G. “GIL” MULL

By Frank E. Baker For Petroleum News

For the U.S. news media, Prudhoe Bay startup in the summer of 1977 was more of a pipeline story rather than an oil field story. How would the new, $8 billion pipeline perform on its trial run? When would the oil front reach Valdez? The wager captured everyone’s imagination. The feat of barging Prudhoe Bay oil field facilities thousands of miles from the U.S. West Coast to the Arctic Ocean; the massive effort of constructing the field’s power station and other oil field installations in a hostile,Arctic environment; the daunting task of drilling oil wells in sub- zero weather conditions through 2,000 ed to produce that first barrel of oil, were overlooked by most of the nation, taken feet of permafrost and another 6,000 feet for the most part, unheralded. for granted by the general public. But to tap into Prudhoe’s rich oil reservoir; In its remote spot near the top of the over the past 30 years, the field has told the multibillion-dollar investments need- world, Prudhoe Bay has been generally its own story — in billions of dollars of 128 Harnessing a Giant: 40 Years at Prudhoe Bay taxes and royalties to the local companies that support quality of life for generations It has been a State of Alaska; billions of dol- the oil and gas industry. of Alaskans; and energy — one-of-a-kind, outdoor lars of investments within the The industry’s many contri- about 15 billion barrels of oil state; an Alaska Permanent butions also include infra- sent to market in the U.S., laboratory for Fund savings account that has structure and improvements accounting for an average 15- environmental science. grown to more than $38 bil- to facilities across the state 20 percent of the nation’s pro- It has helped advance lion; more than 56,000 Alaska that include schools, hospitals, duction for three decades. jobs, not counting construc- roads, airports, docks, shop- But over the past 30 years, knowledge of the tion of the Alaska pipeline; ping centers — improvements Prudhoe Bay has yielded more region’s earliest and the emergence of many that have vastly enhanced the than oil, revenue and jobs. It aboriginal inhabitants. has been a proving ground for oil field technology and Arctic NASA astronaut and New engineering. Mexico Senator Harrison It has been a one-of-a-kind, Schmitt visited Prudhoe Bay. outdoor laboratory for envi- After being toured around the ronmental science. It has area in the depths of winter, helped advance knowledge of when chill factors can reach the region’s earliest aboriginal minus 100 degrees Fahrenheit inhabitants. and colder, he commented:“If Because of Prudhoe Bay, we can live and work here, in there are now 24 separate oil these conditions, we can go to fields on the North Slope — Mars.” five of which are among the He got it right. In one sen- nation’s top 10 largest produc- tence he revealed a profound ing fields. understanding of Prudhoe And despite the natural oil Bay’s underlying importance production decline of the big to Alaska, the nation and the fields, the North Slope is today world. producing about 700,000 bar- Prudhoe Bay has been a rels of oil per day — a signifi- testament to what human cant contribution to America’s beings can do when they set energy production. their minds to it. ◆ Because of Prudhoe Bay, Alaska is poised to reap a new A lifetime Alaska resident, Arctic bounty — the trillions Frank Baker retired from BP of cubic feet of natural gas Exploration (Alaska) Inc. in lying beneath the surface. It is March 2007 with 29 years natural gas needed by an ener- service. He has been writing gy-hungry America. and reporting for the oil and A few years after his moon gas industry for more than landing on Apollo 17, former 30 years. Harnessing a Giant: 40 Years at Prudhoe Bay 129 Advertiser Index

COMPANY PAGE NUMBER Cruz Construction...... 48 Norcon Inc...... 103 ACE Air Cargo...... 40 Denali - ConocoPhillips ...... 126 North Slope Telecom...... 35 ACS...... 3 Denali Industrial Supply ...... 70 Northern Transportation ...... 85 Air Liquide ...... 62 DNR, Division of Oil & Gas...... 82 Northrim Bank ...... 113 Airgas...... 117 Dowland Bach ...... 118 Northwest District Ironworkers ...... 41 Airport Equipment Rentals ...... 54 Doyon Ltd...... 106 Northwest Pump ...... 61 Alaska Airlines ...... 10 Dresser-Rand ...... 98 Northwest Technical Services ...... 92 Alaska Analytical ...... 45 EEIS Consulting Engineers ...... 105 Opti Staffing Group ...... 61 Alaska Cover-All...... 51 Evergreen Helicopters...... 131 PDC Harris Group ...... 100 Alaska Dreams ...... 55 ExxonMobil ...... 22 Peak Oilfield Svc. Co...... 117 Alaska Frontier Constructors ...... 19 Ferguson Enterprises ...... 110 Penco ...... 35 Alaska Instrument ...... 15 First National Bank of Alaska...... 80 Petroleum Club of Alaska...... 41 Alaska Interstate Construction (AIC) ...... 67 Flowline Alaska ...... 18 Petroleum Equipment / MRO Sales ...... 32 Alaska Roteq Corp ...... 119 Fluor Corp ...... 121 Petrotechnical Resources of Alaska (PRA) . . . 2 Alaska Sales and Service ...... 8 Foundex ...... 118 PGS Onshore ...... 130 Alaska Steel ...... 111 Pileco ...... 31 Ameri-Tech Building Systems ...... 57 G-M Porta-Kamp ...... 59 American Marine / Penco ...... 9 GBR Equipment ...... 55 Price Gregory ...... 62 Arctic Controls ...... 45 GPS Environmental...... 116 ProComm Alaska ...... 77 Arctic Foundations ...... 6 Great Northern Engineering ...... 39 Prudhoe Bay Hotel ...... 29 Arctic Structures...... 115 Hawk Consultants ...... 39 ASRC Energy Services...... 89 HDR Alaska...... 104 Q-Z Atigun ...... 128 Hunter 3-D ...... 68 QUADCO...... 58 Inlet Petroleum...... 21 Rain for Rent ...... 70 B-F Jackovich Industrial ...... 108 Richmond Steele Recycle ...... 73 Beacon ...... 112 Judy Patrick Photography...... 47 Salt + Lite...... 52 Benchmark Oil and Gas ...... 4 Kakivik Asset Management ...... 99 Shaw Alaska...... 38 BP...... 5 Kenworth Alaska ...... 74 Steelfab ...... 120 Brice, Inc...... 20 Kuukpik Arctic Services...... 70 Superior Machine and Welding ...... 100 Brooks Range Supply ...... 25 Lea-Der Coatings ...... 102 Surveyors Exchange ...... 53 BW Technologies by Honeywell ...... 27 Lounsbury & Associates ...... 37 Taiga Ventures ...... 53 Cal Worthington Ford ...... 131 Lynden ...... 132 Teamsters Local 959...... 49 Canadian Mat Systems (Alaska) Inc...... 127 MACTEC Engineering & Consulting ...... 28 Tikigaq Corp...... 29 Caribou Construction ...... 74 MAPTS (Mining & Petroleum Training). . . . . 92 Total Safety U.S. Inc...... 64 Carlile Transportation ...... 17 Maritime Helicopters Inc...... 24 Trailer Craft ...... 26 CCI ...... 109 McJunkin Redman Corp ...... 88 Udelhoven Oilfield System Services ...... 78 CGGVeritas...... 114 MI SWACO ...... 76 Ukpeagvik Corp ...... 125 CH2M Hill...... 84 Unique Machine...... 55 Chiulista Camp Services ...... 50 N-P Unitech of Alaska ...... 12 Colville ...... 7 Nabors Alaska Drilling ...... 71 Univar USA...... 45 ConocoPhillips ...... 87 Nana/Colt Engineering ...... 63 Volant Products ...... 81 COSCO Fire Protection ...... 111 National Oilwell Varco ...... 96 WesternGeco ...... 83 Crowley Martime ...... 34 NMS ...... 123 Weston Solutions ...... 128 130 Harnessing a Giant: 40 Years at Prudhoe Bay Harnessing a Giant: 40 Years at Prudhoe Bay 131

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