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Vol. 15, No. 36 Week of September 05, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Eni plans 52 wells for Nikaitchuq Schrader Bluff oil development

In preparation for the upcoming startup of its offshore Nikaitchuq unit, Eni Petroleum filed pool rules with the Alaska Oil and Gas Conservation Commission on Aug. 18.

The Italian major is planning a 52-well development program for the Nikaitchuq Schrader Bluff oil pool, the only reservoir the company plans to develop at this time.

Eni wants the pool to include the entire Schrader Bluff formation, which it defines as being everything between 3,530 feet and 3,867 feet on the Kigun No. 1 well logs. Eni said the top of the pool is the Cretaceous shale below the Ugnu formation and the bottom of the pool is some 45 feet below the base of the Schrader Bluff OA sand.

That interval includes the Schrader Bluff OA sand and the Schrader Bluff N sand, but Nikaitchuq development is currently based solely on the OA reservoir, Eni said. The company will decide whether to develop the Schrader Bluff N sand and minor oil accumulation in the Triassic Sag River sandstones based on drilling and seismic results.

Eni said it plans to apply for a Nikaitchuq Schrader Bluff Participating Area, as well.

The AOGCC sets pool rules for all reservoirs to allow companies to recover as much of a given resource as possible, as safely and soundly as possible, with minimal waste.

Onshore and offshore pads

Eni is developing Nikaitchuq from onshore and offshore facilities.

Production will begin early next year from an onshore pad at Oliktok Point and will expand to include production from an offshore gravel drill site near Spy Island in Harrison Bay. Eni said it has already finished construction on both drilling pads.

Eni plans to drill 22 wells from the Oliktok Point Pad, or OPP: 10 production wells, eight injection wells, three water wells and one disposal well. To date, the company has drilled five wells, including several drilled by a former operator. Eni plans to drill 30 wells from the Spy Island drill site, or SID: 16 producers, 13 injectors and one disposal well.

Eni is drilling at OPP using Nabors rig 245-E and plans to use Doyon rig 15 at the SID.

After a lull, Eni resumed drilling at OPP this past April and plans to continue through at least the second quarter of 2012. SID drilling is set to begin in the third quarter of 2011.

Producers and injectors will be located in pairs, side by side. The wells will be drilled horizontally at 50 to 80 degree inclines with laterals ranging from 4,000 to 10,000 feet.

Eni said that new seismic acquired in the summer of 2009 revealed “several different sand lobes than previously thought,” leading the company to plot new well trajectories.

13 wells since 2005

Eni picked up a 30 percent interest in the Nikaitchuq unit and an 18 percent interest in the neighboring Tuvaaq unit in August 2005, when it bought the Alaska assets of Denver-based independent Armstrong Oil and Gas. In January 2007, Eni acquired the remaining interest in both units from independent Kerr-McGee. Eni ultimately merged the two units.

Kerr-McGee had drilled eight wells over the prospect between 2004 and early 2007. In the winter of 2008-09, Eni drilled a producer and a disposal well. The company began drilling again this past April, spudding one water supply well and two production wells.

Two new pipelines in place

A 3-mile subsea flowline bundle will connect the two drill sites. Eni is also building dedicated processing facilities at Oliktok Point, the first on the North Slope not operated by BP or ConocoPhillips. Those facilities will connect into the existing transportation grid through a new 10-inch gathering line running 14 miles to the Kuparuk Pipeline, where the oil will feed into the trans-Alaska oil pipeline for sale on the West Coast.

Eni said it has already installed both the flowline bundle and the gathering line.

The processing facilities are designed to handle 161,000 gross barrels of liquids per day, including 40,000 barrels of oil and 6.2 million cubic feet of gas daily at capacity.

The gathering line with have a LACT meter at the start and a check meter at the end to measure the integrity of the line; Eni plans to use multiphase meters for well testing.

15 to 22 percent recovery

Eni says it can technically recover between 15 and 22 percent of the original oil in place in the reservoir over a 30-year field life. Eni modeled the field out 50 years, which it called “not an unreasonable field life with respect to worldwide viscous oil analogues,” but ultimately scaled back “due to the uncertainties of forecasting this far into the future.”

The main uncertainty is the waterflood Eni is using to enhance recovery of the viscous oil at Nikaitchuq. Viscous oil waterfloods are only 10 years old on the North Slope, but Canadian viscous oil waterfloods have reported 30 to 40 percent recovery rates, Eni said.

The 15 to 22 percent figure represents technical recovery rates. “The economic recovery percentage could be substantially lower than the technical recovery percentage depending on the economic assumptions in the future,” the company wrote in its filings.

Eni expects to produce some 180 million barrels of oil over 30 years at Nikaitchuq.

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