Oil in Alaska
...the background, the problems, the significance to you—here
are answers to some.of your questions about Alaska’s oil future
All of us hope the 49th state will
become an important oil producer.
Standard has been working toward
this end since we started our first
Alaska “wildcat” (exploratory well)
back in 1923.
Now, the prospects are promising.
But we’ve learned from experience
that it’s a long, hard, expensive way
from a discovery well to a producing
oil field. This is just as true in Texas,
California or Canada as it is on the
Kenai Peninsula. To understand why,
it’s necessary to know something
about oil fields. The first step is to
answer the question . . .
How is oil discovered?
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An “oil pool” is sometimes mistaken
ly thought to be an underground lake
of petroleum. Actually, oil exists un
derground as tiny droplets impris
oned in the pores of rock. Natural gas
is also present, and is one of the
sources of natural energy which can
drive oil from rock pores to the well.
“Oil pools” are found in certain
rock formations that were once an
cient water bottoms. In underground
arches and domes, and sometimes in
pockets in faults where rock layers
have cracked and slipped vertically,
oil is trapped between layers of non
porous rock.
Oilmen sometimes find evidences
of these formations from surface in
dications. Even then, they must find
ways to “look” far below the earth’s
surface. The most widely-used meth
od of “seeing” underground nowa
days is by the seismograph, using
instruments similar to those scien
tists use to pin-point the location and
intensity of earthquakes.
After geologists have surveyed an
area and found promising formations,
a reconnaissance seismic crew moves
in. They drill strings of widely
spaced, relatively shallow test holes.
In these they set off small explosive
charges. By measuring the time it
takes shock waves from these test
shots to strike different rock layers
and bounce back to their instruments,
scientists can chart underground rock
formations. Standard has surveyed
more than 50,000,000 acres of Alaska
by this and other methods.
Making underground maps
of Alaska
The next step is a painstaking job of
interpreting the findings until a rough
underground “map” of a large area
emerges. This underground map is
like a synopsis of a book—it gives
you the general idea, but not the
vital details. So if indications of a
likely “structure” are found (oil
man’s term for prospective oil bear
ing formation), a closer study is
recommended to tell us ...
, Where to drill
“Wildcat” drilling is risky at best
(only about 1 exploratory well in 9
strikes oil and only 1 in 62 finds oil
in commercial quantities). And since
a single well may cost anywhere from
a few hundred thousand to more than
a million dollars (one unsuccessful
well on Kenai cost $975,000), it’s vital
to have the best resources of modem
earth science on your side. So the
next step is a seismic study focused
on the selected area. This time the
shot holes are spaced much closer.
This study is extremely important
because we are seeking the most fa
vorable spot to drill, so that costly
drilling can be confined to the pre
dicted oil structure area.
This work is still underway at
Alaska’s Swanson River field—even
though 3 wells have already been
drilled—2 of them oil producers. Usu
ally, drilling a “wildcat” waits until
all the seismic work is completed. But
in Alaska, we’re doing both simultan
eously to speed progress.
To find oil... ask the drill
“Spudding in” (or starting to drill)
a “wildcat” is a rough and expensive
project anywhere. Roads must be
built, heavy equipment must be trans
ported long distances, sizeable crews
must be housed and supplied. Terrain
and climate in Alaska make the job
especially rugged.
Today drilling is almost always
done by rotary equipment. Big diesel
engines spin lengths of drill pipe at
tached to a toothed, rotating drill bit.
As the bit chews deeper into rock,
additional 90 foot lengths of pipe are
added to the string.
Many such lengths are used, for a
well may probe anywhere from a few
hundred to many thousands of feet
into the earth. In Alaska, wells have
gone nearly 2l/2 miles deep. Depth,
rock hardness, remoteness of loca
tion and luck determine drilling time
and cost of the well. Drilling costs
alone in Alaska have been running
higher than $5000 a day, and one well
took 4V2 months.
And then the well must
be proved
Contrary to popular belief, even if a
“wildcat” strikes oil, there is no guar
antee of handsome dividends for any
one—far from it. A single nugget
doesn’t mean a gold strike. Like a
rich vein in a mine that may peter out
after a few feet, a “wildcat” may flow
vigorously for a while, then dwindle
to a trickle.
This happens often enough that
oilmen discount a discovery well un
til the field is “proved”. This is an
other time-and-money consuming
job. It means “stepping out” wells
from the discovery well, until the
limits of the field are reached.
, On the Kenai Peninsula, the step
out pattern is based on one well to
320 acres—another effort to speed the
proving of Alaska’s first oil field.
Only after careful calculations of size,
pressure, quality of oil, etc. can scien
tists estimate the true value of an oil
discovery. Until then, of course, it is
not possible to pin down long-range
plans for future development.
What Alaska's oil can
mean to you
From the foregoing it is apparent that
it takes time and a great deal of mon
ey to develop an oil field to the point
of commercial significance.
Even so, we’ve been making rapid
progress in Alaska. Already some oil
has been trucked from the Swanson
River field to Seward for shipment
to California for refining. Construc
tion of a pipeline to the sea for faster,
more economical transport must wait
until enough additional oil (at least
6000 barrels a day) can be produced
to justify the huge expense.
Additional wells are being drilled.
And as more producing oil wells
are brought in, the impact of oil on
Alaska’s economy will grow. Alaskan
contractors will be awarded jobs
whenever practical. As communities
grow, stores and services will create
additional payrolls.
The benefits of an oil industry here
will be shared by all Alaskans. If pro
duction expands, as we hope, royalty
payments to Alaska will increasingly
help bear financial burdens of the
young state. Eventually, as Alaska’s
population grows, a refinery may be
necessary to supply home-produced
oil products for Alaska’s needs.
None of these things will come
overnight. Only time, big investments
and much effort can solve the fasci
nating question of Alaska’s oil future.
All Alaskans are anxious to learn
the solution. That’s why we’re push
ing hard to make oil production in
Alaska a commercial reality
STANDARD OIL COMPANY OF CALIFORNIA
Since 1885... planning ahead to serve Alaska better