Eni formally announced its acquisition of Kerr-McGee’s 70 percent interest in the Nikaitchuq field this morning, giving the U.S. subsidiary of Italy’s biggest oil and natural gas company 100 percent working interest in the Alaska North Slope offshore oil field.
The news first broke in the Feb. 25 issue of Petroleum News in the Oil Patch Insider news column.
Nikaitchuq would be the first development project operated by Eni in Alaska.
“Successful appraisal drilling has been completed, confirming the potential viability of the development project,” Eni said. “Plans for a phased development are currently being evaluated with the target of sanctioning the project by year end, and first oil to flow by the end of 2009.”
Eni said the completed project would have about 80 wells, 32 of which would be located onshore (Oliktok Point pad) and the remaining would be drilled from an offshore artificial island. That’s 12 more wells than initially planned from onshore, which suggests extended reach drilling has been successful in the unit. (In previous paperwork Anadarko subsidiary Kerr-McGee said about half the 80 wells would be injectors and half producers.)
“All wells will then be tied back to a production facility located at Oliktok Point to reach a production of 40,000 barrels per day,” Eni said.
Total investment will be about $900 million in U.S. dollars.
Under Kerr-McGee’s initial plan, production from the Oliktok Point pad (phase one) would initially be processed at the nearby Kuparuk River unit facilities. Eni did not say whether or not that was still part of its plan. But a Petroleum News source says Eni is talking to ConocoPhillips about sending all produced crude from Nikaitchuq through Kuparuk, vs. building a standalone processing facility. One company official, who asked not to be identified, said using the Kuparuk facilities would make the most sense.
If Eni does build its own standalone processing facility for Nikaitchuq, it will be the first independent-operated production facility on the North Slope.
Production from independent Pioneer Natural Resources’ nearby Oooguruk field, also in the shallow waters of the Beaufort Sea, is expected to come online a year ahead of Nikaitchuq, but all its hydrocarbons will be processed at Kuparuk.
Eni has been present in Alaska since August 2005, following the acquisition of 103 North Slope leases from Armstrong Oil & Gas. Since then, Eni’s portfolio in the region has grown to 151 leases.
Editor’s note: See full story in the April 15 issue of Petroleum News.