Clarification regarding Eni’s Nikaitchuq, Oooguruk processing

Kay Cashman

Petroleum News

The June 30 issue of Petroleum News carried a story titled, “Eni takes over at Oooguruk on Aug. 1; to finish drilling, test Nikaitchuq North well in 2020,” reporting on news that Eni had taken over 100% ownership and operatorship of the North Slope Oooguruk unit, which is adjacent to Eni’s Nikaitchuq unit.

The following paragraph needs clarification:

Already 100% owner and operator of the adjacent Nikaitchuq oil field, one of the reasons Eni gave for taking over at Oooguruk was because it wanted new oil to take advantage of significant spare capacity in its standalone Nikaitchuq production facility, which can handle 40,000 barrels per day and can be expanded to 50,000 bpd, per Eni Alaska Vice President Whitney Grande.

In fact, Grande did not say that one of the reasons Eni took over at Oooguruk was because it wanted new oil to take advantage of significant spare capacity in its standalone Nikaitchuq production facility - this was an assumption made by Petroleum News. Rather, all Grande said (in a November 2017 presentation) was that the Nikaitchuq production facility can handle 40,000 barrels per day and be expanded to 50,000 bpd. He said this in relation to the Nikaitchuq North exploration well, should it prove successful.

A decade ago, when Pioneer Natural Resources operated the Oooguruk unit, it did consider using the facilities at Nikaitchuq which company officials said would require an eight-mile line to deliver Oooguruk oil to Nikaitchuq. But nothing ever came of it and Oooguruk oil is still processed at the ConocoPhillips-operated Kuparuk River unit.

It remains to be seen whether Eni will build the pipeline and cancel its agreement with ConocoPhillips to process Oooguruk oil in its own processing facility at Nikaitchuq.

- KAY CASHMAN