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Pioneer gets multiple Oooguruk approvals Participating areas, multiphase meters approved; development drilling continues; WAG in Nuiqsut, waterflood in Kuparuk planned By Kristen Nelson Petroleum News
Pioneer Natural Resources Alaska received multiple regulatory approvals for its Oooguruk field off Alaska’s North Slope north of Kuparuk in late July. The field, which began producing last summer, represents some significant firsts on the North Slope: the first field to be operated by an independent; the first use of multiphase metering to measure fluids moving between units; the first pipe-in-a-pipe flowline; and the first operational facilities-sharing agreement between major North Slope operating companies and an independent-operated field.
The Alaska Oil and Gas Conservation Commission and the Alaska Division of Oil and Gas approved use of multiphase meters for measuring field output and the division approved participating areas for both the Kuparuk and Nuiqsut formations at Oooguruk.
In its participating area decisions the division said Pioneer applied to the commission for approval to use the multiphase meters to measure and allocate oil production between the Oooguruk Nuiqsut and Kuparuk participating areas, and Pioneer and ConocoPhillips Alaska applied jointly for approval of multiphase meters to determine pool production and allocation for commingled Oooguruk and Kuparuk River production.
The division said this is the first application to AOGCC and the division “for approval to commingle and allocate production between units.”
Different than LACT Commingled Oooguruk and Kuparuk River production will be measured in accordance with state regulations, the division said, although the accuracy of Oooguruk production measurement will be less certain than if measurements were performed by a typical lease automatic custody transfer.
LACT meters measure single-phase sales-quality oil (water and natural gas has already been removed) and the measurement is performed in accordance with American Petroleum Institute standards.
“Multiphase meters provide separate measurement of oil, gas and water, in a three-phase fluid stream, but do not measure oil with the same degree of accuracy as a LACT meter,” the division said.
The measurement error band for a LACT meter is considered to be plus or minus 0.25 percent, but multiphase meters “can have a much higher error band,” the division said, although a significant source of inaccuracy occurs when multiphase meters are used to measure three-phase fluid with a greater than 80 percent volume of gas.
The division said the gas volume from the Oooguruk Kuparuk and Nuiqsut participating areas “will be much lower and will minimally impact meter accuracy.” And data reported to the division and to the commission indicate that the risk of error is randomly distributed — the meters are as likely to over report volumes as they are to under report volumes.
The division said it approves the use of multiphase meters for well testing and for allocation between wells, between the Oooguruk Nuiqsut PA and the Oooguruk Kuparuk PA, and between Oooguruk and Kuparuk, subject to the terms specified by the commission.
Temporary approval since 2008 The commission granted temporary approvals in June 2008 for use of multiphase meters for well testing and production allocation within the Oooguruk unit — along with use of multiphase meters to allocate production between Oooguruk and the Kuparuk River unit. The temporary authorization has been extended as data was gathered.
The commission said July 30 that data gathered so far indicated the multiphase metering systems and procedures approved in 2008 “acceptably measure and allocate oil production within the” Oooguruk unit and between the Oooguruk and Kuparuk River units.
ConocoPhillips Alaska, the Kuparuk River field operator, supported making the approval permanent subject to conditions.
The expiration date in the 2008 approval has been rescinded subject to compliance with the conditions in the ConocoPhillips’ letter; a 30-day approval period for the commission of any changes to the multiphase metering operations and maintenance guidelines specified in the ConocoPhillips’ letter; availability of a logbook identified in the letter to the commission upon request; and commission approval of any changes to the 18-month frequency of audits of the multiphase flow meters’ performance and accuracy.
The 18-month audits are another condition identified in the ConocoPhillips letter.
Schlumberger Vx Multiphase Flow Meters are used to measure Oooguruk unit production for fiscal and production allocation purposes, ConocoPhillips Alaska said in its June 25 letter.
The company specified that the audits will be conducted by an audit team including Schlumberger, Pioneer, ConocoPhillips, AOGCC and an independent party “recognized as an expert and agreed by other members of the team,” with the independent party chairing the audit team, on an 18-month frequency, or as agreed to by ConocoPhillips.
Benefits to other companies Jim Weeks, managing member of UltraStar Exploration and its sister company Winstar Petroleum, told Petroleum News last October that it was a big step forward for UltraStar when the commission allowed Pioneer to test multiphase flow meters for measuring Oooguruk production being processed at Kuparuk River unit facilities.
“I think Pioneer did the industry a huge, huge service getting these multiphase meters used for transfer,” Weeks said.
Because measuring is important not just for managing reservoirs but for determining taxes, royalties and sales volumes, Weeks said he believes multiphase flow meters could be used to bypass a growing concern among independent explorers related to Alaska’s Clear and Equitable Share, the production tax revision which became law in late 2007.
“Under ACES, any revenue to (BP) from facility access fees is considered production revenue … that increases their production taxes,” Weeks told Petroleum News in January 2008.
Because multiphase meters create more accurate and continuous measurements for each party, Weeks believes they would allow smaller companies to better measure their own production when using the facilities of another company.
Facilities-sharing Pioneer chose not to build its own production processing facilities but to negotiate use of existing facilities at the Kuparuk River field. Like the Tarn and Meltwater satellites on the edge of Kuparuk, Oooguruk crude oil moves through a flowline to central processing facilities at Kuparuk.
The division said the confidential production processing services agreement effective Jan. 1, 2008, between Pioneer and the Kuparuk River unit owners “represents the successful implementation of a facilities-sharing agreement on the North Slope and achieves one of the goals set out in the Charter for Development of the Alaskan North Slope,” signed in 1999 as a condition of ARCO selling its Alaska assets and amended in 2000 when Phillips (now ConocoPhillips) acquired those assets.
This agreement was the first on the North Slope between a facility owner and a third party; previous North Slope agreements have been between companies working in the same unit, the division said.
Jim Weeks had reached a facility access agreement with the Kuparuk River unit owners in 2003 before drilling the Oliktok Point State No. 1, but the deal died after the well proved to be a dry hole.
Drilling results Pioneer began producing — the first independent producer to do so on the North Slope — in June 2008. There are 16 state leases in the 43,236-acre Oooguruk unit, and Pioneer holds a 70 percent working interest in the horizons targeted for development; Eni Petroleum US LLC — operator of the adjacent Nikaitchuq unit — holds the remaining working interest.
Work on the offshore Oooguruk drill site, a flowline to shore and the onshore Oooguruk tie-in pad were completed during the second plan of development; the third plan of development, submitted earlier in 2009, covers work completed to date and work planned through June of 2010.
Pioneer said its original design assumed “very low solids suspended in the flow stream,” but plans to fracture stimulate the Oooguruk-Nuiqsut formation required upgrades to handle solids on the surface, and in the summer of 2008, a sand jet system was installed in the Oooguruk tie-in pad separators.
Oooguruk-Kuparuk production began in June 2008; Oooguruk-Nuiqsut production began in August 2008; the pools are being developed separately and fluids commingled on the surface.
Injection orders have been approved by the commission for both pools and fluid injection is expected to start this year, subject to water supply availability and subject to sustained production from Oooguruk-Nuiqsut, tentatively scheduled for the third quarter.
2009-10 plans Proposed operations include implementing a water-alternating-gas flood in the Nuiqsut pool and waterflood in the Kuparuk pool using horizontal wells drilled from the Oooguruk drill site. The company said the objectives of the WAG include maintaining reservoir pressure; swelling the undersaturated oil with gas to reduce in-situ viscosity of the oil; and sweeping moveable oil from injectors to producers.
Waterflood operations have been delayed, Pioneer said, but the plan is to inject return water from the processing facilities at Kuparuk supplemented by imported Kuparuk River unit water. While gas injection is desirable, the company said that is subject to the ability of the Oooguruk working interest owners to acquire an adequate supply of outside gas from a third party.
Drilling activities under the third plan of development are planned for 18 wells, 16 Nuiqsut and two Kuparuk, and include producers and injectors.
Pioneer said in its plan that prior to drilling, it believed Oooguruk reservoir conditions to be analogous to Alpine, but in some instances that has proved to be incorrect.
Initial drilling proved that a higher mud weight was required at Oooguruk and that resulted in longer drill times because of lower rates of penetration caused by buoyancy effects and increased difficulty in retrieving the bit from the hole.
Lateral sections of wells in the Nuiqsut reservoir were planned to be open-hole completions, but Pioneer said current plans are to install liners with fracture stimulations for producing wells and injection conformance equipment for injection wells, adding to project time.
In addition to development work, Pioneer said it will continue geologic and geophysical analysis to enhance its understanding of subsurface characteristics and will also assess “exploitation opportunities in the acreage immediately outside our development areas and at varying horizons.”
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