Arco Confirms Major New Oil Find Near Prudhoe Bay

Atlantic Richfield Co. said Friday that test wells on the North Slope of Alaska have confirmed the existence of another major oil field there, which the company called one of the largest domestic finds in the past 10 years.

Arco estimated that the find in Alaska’s Point McIntyre field had recoverable reserves of about 300 million barrels of oil--enough to add five months of production from Alaska at current rates of about 2 million barrels per day, analysts said.

The find is especially important to California, which relies on Alaskan oil for about 40% of its supply.

“This confirms that there are still a few major fields to be found in the frontier areas of the United States,” said Harry Quarls, an analyst with Booz, Allen & Hamilton Inc. in Dallas.

Other analysts said the field was an important find but would not significantly diminish the country’s increasing reliance on foreign oil. “It’s nice, but it doesn’t fundamentally change your energy balance,” said James Sweeney, a professor at Stanford University specializing in energy economics and policy.

Impetus for Exploration

The Arco find adds impetus to increase exploration for oil in Alaska to replace rapidly dwindling reserves, analysts said.

Industry officials believe much more oil remains to be placed into production in Alaska and have been pushing to open drilling in the Arctic National Wildlife Refuge, under which government officials estimate there may be as much as 9.6 billion barrels of recoverable oil.

But it also raised the concerns of environmentalists.

“It is unwise at this point to start producing from new fields in Alaska until we have at a minimum absorbed the lessons of Exxon Valdez, which we have not even begun to do in terms of tanker safety,” said James Thornton, a lawyer with the Natural Resources Defense Council in San Francisco.

“Three hundred million barrels of oil is a reasonable amount of oil, but it’s trivial compared to the amount that could be saved through energy conservation, particularly through energy efficient automobiles,” Thornton said.

Comparable Fields

The Arco field compares with the last major find in Alaska, the Endicott Field in 1978, which had about 350 million barrels of recoverable reserves, said Susan Andrews, an Arco spokeswoman in Alaska. The last major discovery in the Lower 48 states was the Point Pedernales Field off the shores of Lompoc, Calif., in 1982, which had reserves of about 343 million barrels.

The new oil field was confirmed by a test well that resulted in a rate of flow as high as 5,400 barrels a day, Arco said.

The well was the third drilled into the field and was about 2 1/2 miles east of the first well, which was drilled in 1988 and yielded a flow rate of 2,500 barrels per day.

A second well showed rates as high as 5,350 barrels per day.

“With testing completed on these two delineation wells, we have confirmed the presence of a high quality reservoir with good porosity and permeability,” said Jerry Dees, vice president of exploration for Arco Alaska Inc.

Slower Production Rate

Many single wells in Alaska produce about 2,500 barrels a day, but the average well in the United States currently yields about 13.5 barrels a day because many of the fields in Texas and other states are mature.

The field is two miles from Prudhoe Bay. Arco shares as much as a 40% interest in it with Exxon Corp. and BP Exploration (Alaska) Inc., a unit of British Petroleum.

Arco will drill more test wells to further define the field. Production would not begin at the field until at least the mid-1990s, said Arco spokesman Al Greenstein in Los Angeles.

Estimates on the amount of recoverable reserves from current Alaska fields vary. But officials estimate that the remaining recoverable reserves from the current Prudhoe Bay field at about 5 billion barrels and from the nearby Kuparuk field about 1.6 billion to 2 billion barrels, down from about 10 billion to 12 billion at the beginning of production.

Andrews estimated that there was at least 20 years of production remaining from Prudhoe Bay. “While it has reached its peak, there are still many years of production left.”

Another 15 billion to 20 billion barrels may lie in the so-called West Sak field, but the amount of recoverable oil may be far less because of the difficulty of extracting it.