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Two more Oooguruk drill sites in the works Pioneer’s proposed Nuna project gives offshore unit onshore drilling pads, presumably to reach Torok formation in Moraine prospect Kay Cashman Petroleum News
Three weeks after Pioneer Natural Resources gave investors an expanded Oooguruk map that added six leases and one new onshore drill site to the south and southwest of the Beaufort Sea unit, the company delivered a proposed “Nuna” development project for the same area to the State of Alaska. But the Nuna map and fact sheet, released to the state in early December, called for two new onshore drill sites and a tie-in pad, plus associated gravel roads and pipelines.
Pioneer has made no secret of the fact it is searching for more sources of oil at Oooguruk. In an early May investor conference call, Pioneer President and CEO Tim Dove mentioned the possibility of a new onshore gravel drill site for the unit, noting that earlier in the year the Texas-based independent’s Alaska subsidiary had drilled into the northern end of the Moraine prospect, a 3,000-foot well that produced from the Torok formation at initial rates of 1,100 barrels per day.
The new drill site, Dove said, would allow Pioneer to drill into the southern part of the prospect.
Oooguruk’s existing drill site is a six-acre artificial gravel island about 5.7 miles from shore.
Torok, the third producing horizon at Oooguruk, is a large stratigraphic trap of thinly laminated sands that sits about 1,000 feet above producing Kuparuk pool, which in turn overlies deeper and larger Nuiqsut.
Every Oooguruk well into the Kuparuk and the Nuiqsut has been drilled through the Moraine, so Pioneer has said it has a lot of data on the prospect.
Early production estimates from the unit, which sits in 4-5 feet of water, was close to 12,000 barrels of oil in November, up 5,000 barrels a day from its third-quarter average. Production is expected to reach 15,000-20,000 barrels per day in 2011.
Production currently comes mainly from Jurassic Nuiqsut sandstone and Kuparuk C sandstone reservoirs.
No permits filed yet The Nuna details released to the state — permits won’t be filed until sometime in early 2011 — do not mention an Oooguruk unit expansion or the Torok formation and the Moraine prospect; rather Pioneer said the two new onshore pads will allow the company to use extended reach drilling to “reach resources not accessible” from Oooguruk’s existing offshore drill site.
If the Nuna project is sanctioned by Pioneer, civil construction “could commence in 2013 with first oil in 2014 or later,” Pioneer said, noting that sanctioning “would not occur until completion of appraisal work and receipt of major agency approvals.”
The company said “preliminary engineering” had identified a development scenario that included:
• Two drill sites on the eastern bank of the Colville River;
• A tie-in pad adjacent to KRU drill site 3S (DS-3S);
• Using existing infrastructure at the Oooguruk tie-in pad, including power generation, gas compression and camp facilities to reduce the need for additional infrastructure;
• Utility service, including water, gas and power, that would come from elevated flowlines from the Oooguruk tie-in pad to the new drill sites via DS-3S;
• Gravel roads to connect the two new drill sites to DS-3S;
• Waste streams injected into approved disposal wells at the drill sites; and
• Three-phase production that would be transported for processing to the ConocoPhillips-operated Kuparuk River unit via a flowline tie-in at DS-3S.
Standalone processing facility a possibility Whether the Nuna development is ultimately part of a formal Oooguruk unit expansion or not, it still bodes well for increased production from the area for Pioneer and its 30 percent partner in all the leases, Eni Petroleum. The more oil operator Pioneer can produce, the better chance it has of justifying the construction of its own processing facility.
Currently, Oooguruk oil and small amounts of gas are being processed at Kuparuk, where PN sources say Pioneer has to pay stiff back-out fees because Kuparuk has to forego processing some of its own oil, and — some say — because Kuparuk is the only game in town. Neither observation has been confirmed by Pioneer, which has only praise for its facility sharing agreement with ConocoPhillips.
Here is what Pioneer spokesman Tadd Owens recently told PN about the possibility of Pioneer building its own facility for Oooguruk: “At this time we are not planning to construct our own production processing facility. However, that option remains available to us if at some point in the project’s future we determine the economics justify constructing our own processing plant.”
When asked if Pioneer was planning to use its partner Eni’s soon-to-be-online facilities at the adjacent Nikaitchuq unit, he said: “At this time we have no plans to use facilities at Nikaitchuq to process production from Oooguruk. Going forward we will continue to evaluate any opportunities to enhance the economics of our project.”
It would require an eight-mile line to deliver Oooguruk oil to Nikaitchuq’s processing facility.
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