Kerr-McGee needs Nikaitchuq easement

Kerr-McGee, now part of Anadarko Petroleum, has applied to Alaska’s Division of Oil and Gas to modify the easement for the Nikaitchuq field development to accommodate wellbore areas between the field production pad at Oliktok Point and Kerr-McGee’s Beaufort Sea leases. The Nikaitchuq development involves directional drilling from Oliktok Point to offshore targets — the wellbores require an easement to pass through the ConocoPhillips-operated Kuparuk River Unit.

In its easement extension application Kerr McGee said that it proposes starting the drilling of two wells in November 2006, with full development involving the drilling of an additional seven wells. The maximum flow rate for any well is estimated at 2,000 barrels per day with artificial lift, the company says.

Following Anadarko’s takeover of Kerr-McGee in August people speculated about the future of the Nikaitchuq project. But in September Anadarko’s Alaska spokesman Mark Hanley told Petroleum News that Kerr-McGee’s planned winter drilling program would proceed.

Approval of field development will likely depend on the results from the two initial wells. Kerr-McGee’s U.S. Army Corps of Engineers permit and unit paperwork describe the future development of three production islands, which would each have about 50 wells. The islands would be in the shallow waters of the Beaufort Sea, south of the protective natural barrier islands.

Discovered in 2004, at its peak Nikaitchuq is expected to produce 60,000 barrels of oil (and small amounts of natural gas) per day from two formations, the Schrader Bluff and the Sag. The field, which is thought to hold between 100 million and 200 million recoverable barrels of oil, is expected to produce for 30 years.

—Alan Bailey