State puts Kitchen Lights in default

NEWS BULLETIN

July 19, 2010 --- Vol. 16, No. 60

July 2010

Kerr-McGee does not expect to make a decision on development of its Alaska North Slope Nikaitchuq discovery before the end of the year, as previously indicated. The company had initially hoped to both sanction Nikaitchuq development by the end of this year and begin construction of its first of four potential production pads. If Kerr-McGee was able to remain on schedule it would have produced oil from its first pad in March or April 2006, setting a record for the shortest time between the discovery of a field and when it went into production. “I can tell you we are still evaluating Alaska, but do not expect a sanctioning decision this year,” Kerr-McGee spokesman John Christiansen told Petroleum News Nov. 22. Christiansen declined to say more but he did provide an information sheet handed out by Kerr-McGee as part of a Nov. 15 Bank of America presentation indicating four issues the company was still trying to resolve in Alaska before deciding to proceed with Nikaitchuq development. Those issues were reservoir stimulation, royalty relief from the state of Alaska, and pipeline and processing agreements with North Slope infrastructure owners. Permitting was also listed but Petroleum News could not find a permit in public records that had not been issued for the project. At full capacity Nikaitchuq is expected to produce 60,000 barrels of oil per day and small amounts of natural gas through 2026. Editor’s note: See full story in the Nov. 27 issue of Petroleum News, which will be online at www.PetroleumNews.com this coming Friday at noon.

NEWS BULLETIN

July 14, 2010 --- Vol. 16, No. 59

July 2010

Eni gives up Rock Flour unit

Eni Petroleum voluntarily terminated the Rock Flour unit in June.

According to recently released state lease reports, the Italian major relinquished the central North Slope unit, tucked between the Prudhoe Bay and Kuparuk River units.

Eni acquired the unit when it arrived in Alaska in 2005, buying assets from Armstrong Alaska. Eni ultimately drilled two wells, Rock Flour No. 2 and No. 3, targeting viscous crude oil from several reservoirs. Previous exploration work in the area, including ARCO’s Rock Flour No. 1, showed oil-bearing sands, and Eni planned to test whether higher underground temperatures in the area would make the sluggish oil easier to produce.

The decision to terminate the unit suggests Eni is no longer interested in completing its work commitments at Rock Flour. In a plan of exploration approved in late 2005, Eni agreed to drill three wells and run a seismic program at Rock Flour by this summer.

When Eni came to Alaska it divided its time among several prospects, but in recent years the company has been focused on bringing the near-shore Nikaitchuq unit into operation.

See story in July 18 issue, available to subscribers online at noon, Friday, July 16, at www.PetroleumNews.com

Kerr-McGee delays decision on Nikaitchuq development

Print this story

Petroleum News - Phone: 1-907 522-9469
[email protected] --- https://www.PetroleumNews.com
S U B S C R I B E

CLICK BELOW FOR A MESSAGE FROM OUR ADVERTISERS.