ExxonMobil in Alaska:Offshore Alaska production begins at Endicott

Exxon press release

Reprinted with permission of the ExxonMobil a

October 3, 1987, the first offshore Arctic production of crude oil began at the Endicott Field, 15 miles east of Prudhoe Bay in the Beaufort Sea. Exxon Company, U.S.A. owns 21 percent interest in the field, where geologists and engineers estimate 350 million barrels of oil can be recovered from one billion barrels contained in the reservoir two miles beneath the earth.

The field is expected to be fully operational by year-end, with average daily crude production of 100,000 barrels, ranking Endicott among the top10 U.S. oil producers. Oil currently is being produced from drilling and production facilities located on two artificial, gravel islands, which are two-and-a-half miles offshore.

An above-ground pipeline carries the oil from the field via a causeway which joins the islands to the mainland. The Endicott Pipeline, in which Exxon Pipeline Company holds 21 percent interest, connects with the Trans Alaska Pipeline System.

That system transports the oil to Valdez, Alaska, for shipment by tanker to the lower 48 states.

Exxon USA purchased its Endicott leases in 1969 and 1982 for $87 million. In 1984, Exxon USA effectively doubled its ownership in Endicott to the current 21 percent by purchasing the majority of Arco Alaska’s interest.

The field was discovered in 1978 by another leaseholder, Standard Alaska Production Company, which owns 57 percent share in the field. Amoco and Union Oil Company of California also are major leaseholders. Standard operates the jointly shared drilling and production facilities for the field.

In 1984, the field’s development costs were estimated to be $2.2 billion. “Good engineering and good project management, along with favorable market conditions, brought the cost down to $1.1 billion,” says Dave Smith, coordinator of the Alaska Interest Production Engineering organization for Exxon USA. “The successful efforts to reduce costs in no way jeopardized the environmental protection aspects of the project. In fact, the Endicott development incorporates innovative environmental protection safe-guards and practices.”

Employees from Exxon USA, Exxon Production Research Company and Exxon Research and Engineering Company worked with Standard in turning the prospect into a producing oil field ahead of schedule and under budget. “From a project management standpoint, it represents one of the industry’s best efforts in Alaska,” Smith says.

Editor’s note: Endicott is in the Duck Island unit. Key Arctic offshore technical challenges included a short open-water season and severe ice conditions in the winter. To address the issues of severe ice, currents and ice scouring, two gravel production islands were built. These were the first applications of ExxonMobil’s gravel island technology for offshore Arctic production.