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Explorers 2011: Eni becomes ANS producer in 2011 Italian major is fourth operator-producer on Alaska’s North Slope; keeps hand in exploration Eric Lidji For Petroleum News
After relinquishing much of its exploration acreage in Alaska in 2010, Eni Petroleum became a producer in 2011, but is still working behind the scenes on exploration projects in the state.
The Italian major first arrived in Alaska in the late 1960s through its company Agip Petroleum, but traces its more recent push in the state to the mid-2000s. In 2005, Eni bought a minority interest in several North Slope prospects from Armstrong Alaska and in 2007 it bought the outstanding interest in those prospects from Kerr-McGee Corp.
Those assets included Nikaitchuq, Tuvaaq and a stake in Oooguruk, three offshore prospects in the state waters of the Beaufort Sea, north and northwest of the Kuparuk River unit. It also included several onshore prospects, including the Maggiore and Rock Flour prospects in the central North Slope south of Prudhoe Bay and Kuparuk River.
Eni quickly worked to make its offshore prospects viable. The company combined Nikaitchuq and Tuvaaq into the Nikaitchuq unit and got the Alaska Department of Natural Resources to agree to offer royalty modification on leases in the expanded unit.
In 2008, Eni became an Alaska producer through its 30 percent interest in the Pioneer Natural Resources Alaska Inc. operated Oooguruk unit, just to the southwest of Nikaitchuq. But whereas Pioneer chose to partner with Eni and rent space on existing ConocoPhillips Alaska Inc. processing infrastructure, Eni decided to build its own processing facilities for Nikaitchuq.
Eni needed to use “innovative technologies” in order to be successful in developing the “marginally economic” viscous oil at Nikaitchuq, according to David Moles, Eni’s Alaska representative and development manager.
The company eventually sanctioned a roughly $2 billion development project in early 2008. The plan involved drilling 52 wells from a combination of onshore and offshore drilling sites and building an independent 40,000-barrel per day processing facility.
Eni originally hoped to bring that project online in late 2009, but delays related to weather and the short Arctic sealift season pushed the program back by one year.
Eni brought Nikaitchuq online in February, three years after it sanctioned the project.
Prepping offshore facilities The Nikaitchuq Schrader Bluff oil pool includes the OA and N sands.
Eni only plans to develop the OA sand for now. The company believes the accumulation holds between 800 million and 930 million barrels of oil in place and expects to produce as much as 220 million using primary recovery and waterflood injection. The Nikaitchuq unit is expected to produce for 30 years and peak at around 28,000 barrels of oil per day.
Eni is currently drilling from its onshore facilities at Oliktok Point while it constructs its offshore facilities near Spy Island. The company expects to finish drilling in 2014.
Nikaitchuq passed the 1 million barrel mark in July 2011.
Exploration partnerships Although Eni dropped its Rock Flour and Maggiore prospects in 2010, after drilling wells at both in early 2007, the company still holds acreage outside of the Nikaitchuq unit.
Through its minority partnership with Pioneer in Oooguruk, Eni is taking part in the Nuna development, an effort to further explore, delineate and develop the Torok formation.
Eni also recently farmed out six leases in the North Tarn prospect southwest of the Kuparuk River unit to Brooks Range Petroleum Corp. and its partners. Those companies drilled the North Tarn No. 1 well this year and plan to return to the region this winter.
Eni also holds leases in the Chukchi Sea in partnerships with Statoil and ConocoPhillips.
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