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For Eni, size matters at Nikaitchuq Eni able to piggyback on much of Kerr-McGee’s permitting, plans to finish most construction and start drilling this year By Eric Lidji Petroleum News
By slightly scaling back the size of the Nikaitchuq project, Eni Petroleum is taking advantage of extensive permitting done in 2005 and 2006, by Kerr-McGee, the previous operator of the Beaufort Sea Nikaitchuq Unit.
As a result, Nikaitchuq is almost fully permitted, allowing the Italian super-major Eni to pursue an aggressive timeline at the oil development in the shallow state waters north of Oliktok Point, off Alaska’s North Slope, with drilling planned for the end of the year and first oil by the end of 2009.
In a revised plan of operations from Nov. 13, 2007, given to the state in January and made available to Petroleum News on Feb. 15, 2008, Eni modified the original strategy for developing Nikaitchuq set forth by Oklahoma City-based independent Kerr-McGee.
Slight reductions eliminate need for many new permits For instance, Kerr-McGee planned to develop Nikaitchuq in stages, starting with a production pad at Oliktok Point and then building up to three offshore production pads totaling 48 acres altogether.
Eni would also build as many as four pads, but in a different configuration: one onshore pad, one onshore support pad, one offshore pad and possibly an offshore satellite totaling 46 acres.
Because Nikaitchuq will now have fewer production pads covering a smaller footprint, Eni avoided a new coastal consistency review from the Alaska Coastal Management Program and can rely instead on the review Kerr-McGee received back on Nov. 7, 2005.
The slight downsizing continues into the details of the revised plan of development.
Eni now proposes using 850,000 cubic yards of gravel for construction at Nikaitchuq, down from 952,000 cubic yards listed in the Kerr-McGee plan. Gravel will most likely be mined from the nearby state Mine Site E.
In Eni’s new plan of development, the flowline bundle connecting the offshore gravel island to Oliktok Point is being reduced to 3.6 miles from 12.4 miles, reducing the flowline disturbance to 25 acres from 80 acres.
Kerr-McGee planned to either build 14 or 17 miles of gathering line to connect the onshore production pad to a new processing facility, and Eni chose the shorter of those options.
Some permitting remains But along with piggybacking on Kerr-McGee’s permitting work at Nikaitchuq, Eni will have to follow 11 additional measures Kerr-McGee agreed to back in 2005.
The measures are primarily designed to protect animals and subsistence resources on the North Slope, including bowhead whales, migratory and nesting birds, caribou and polar bears.
The measures require cooperation with several Native groups, as well as consultations with several federal agencies.
Eni will also have to use some existing vertical support members for part of the gathering line, will have to plan specific routes for aircraft and marine vessels to avoid concentrations of waterfowl and will have to obey several seasonal restrictions on gravel hauling and major construction, among other things.
On its own accord, Eni plans to hold project meetings in Barrow and Nuiqsut “as appropriate” to present new information about proposed operations.
In addition to the 11 measures, Eni will also have to follow an advisory measure on drilling created by the Alaska Department of Environmental Conservation, placing certain seasonal restrictions on drilling at certain depths because the Sag formation at Nikaitchuq can potentially flow unassisted.
Eni plans quick timeline Eni plans to start drilling at Nikaitchuq by the end of the year.
To hit that target, the company hopes to finish building the onshore pad at Oliktok Point, the support pad south of Oliktok Point and the offshore gravel pad early this year.
The offshore pad will be nearly 640,000 square feet or about 14.7 acres. The support pad will be seven acres and located 1.5 miles south of Oliktok Point.
The offshore gravel island will include several temporary camps, each with the ability to accommodate up to 90 people.
Eni plans to start drilling from the onshore production pad by the second half of 2008.
During the 2008-09 winter construction season, the company plans to construct and place the offshore flowline bundle and onshore gathering line.
The offshore flowline bundle will be a three-phase produced fluid “pipe-in-pipe” along with water lines, electric power and fiber optic cables, and diesel and natural gas lines running less than four miles from the gravel island to Oliktok Point.
The project will also include a 14-mile processed crude oil gathering line connecting to the Kuparuk Pipeline.
Eni plans to finish installing a processing facility at Oliktok Point in 2009. The facility will be the first on the North Slope not owned by ConocoPhillips or BP.
Owning its own plant will allow Eni to avoid the facility sharing problems going on between Pioneer Natural Resources and ConocoPhillips at the Oooguruk unit just west of Nikaitchuq in the Beaufort Sea.
Eni has a 30 percent working interest in Oooguruk.
As previously reported, Eni expects to start producing oil from the onshore production pad at Nikaitchuq by the end of 2009, but the company also expects to produce oil from the offshore production pad in 2010.
Eni will be updating its plan of exploration for Nikaitchuq sometime this year.
Eni Petroleum is the U.S. affiliate of Eni SpA, an international, integrated oil and gas company based in Rome with 73,000 employees working in 70 countries. Half of the company’s production is based in Africa, while the other half is spread across the North Sea, Italy and countries on six continents.
Eni expects to produce nearly 2 million barrels of oil equivalent per day in 2008. The company reported an average daily production of 1.77 million boe in 2006.
Alaska North Slope oil production peaked in 1988 with an average of 2.2 million bpd. North Slope oil production averaged around 735,000 bpd in December.
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