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Oil Search Alaska files first Pikka plan of development
Kay Cashman Petroleum News
Oil Search Alaska took another significant step forward in its Pikka oil field development by filing the first plan of development for the North Slope unit with the Alaska Department of Natural Resources’ Division of Oil and Gas.
The POD, dated Nov. 1, has a cover letter addressed to both Corri Feige, DNR commissioner, and Rex Rock Sr., president of Arctic Slope Regional Corp. It was signed by Bruce Dingeman, chief operating officer of Oil Search Alaska, who will be taking over as president of the Alaska unit of Oil Search Ltd. from Keiran Wulff, who was recently appointed to the top position of managing director of the ASX-listed parent and will be moving to Sydney in mid-December. To ensure a smooth transition of responsibilities Wulff is maintaining his Alaska responsibilities until then to help oversee the company’s entry into front-end engineering and design for the Pikka project, while also engaging with stakeholders and being involved in budget and planning for 2020 and beyond.
Although the POD describes proposed operations for the North Slope winter off-road season 2019-20, through early production start in 2022 and full-facility production in 2024, the actual term of the plan is one year, from Feb. 1, 2020, through Jan. 21, 2021.
While there were no significant changes in development activities previously made public by Oil Search Alaska and reported by Petroleum News, the document confirmed project details and provided a few updates, such as the company is still working with Kuukpik Corp. regarding access to Kuukpik surface lands for Pikka unit operations. Kuukpik is the Native village corporation for the community of Nuiqsut.
Pikka B and C drilling An annual report in the POD describes operations conducted under the current and fourth, plan of exploration, or POE, that ends Jan. 31.
Planned activities for the fourth POE were based on the drilling of the Pikka B, Pikka B ST1, Pikka C and Pikka C ST1 wells.
The company completed that drilling, with “data analysis ongoing and expected to be completed” by Jan. 31, the POD said.
Oil Search Alaska, or OSA, built ice roads and two ice pads beginning at the Mustang pad in the Southern Miluveach unit to the Pikka B and Pikka C appraisal well sites.
Pikka B was drilled to a depth of approximately 5,192 feet true vertical depth, and its deviated sidetrack well was drilled to 4,921 feet TVD. A production test was done at the Pikka B ST 1.
The Pikka B wells “helped delineate the southern half of the planned Nanushuk development area and in the subsurface basis of design,” the POD said.
OSA drilled the Pikka C well to approximately 4,650 feet TVD, and the Pikka C ST 1 horizontal sidetrack well to 4,118 feet TVD in the central part of the unit. These wells helped “delineate the northern limit extension of the reservoir and in the subsurface basis of design,” per the POD.
Coring, logging, AVO analysis Conventional core was acquired in both wells along with a “full suite of LWD (logging while drilling) and wireline logs, including fluid sampling,” the POD said.
Routine and special core analysis, or SCAL, was done on the conventional core from Pikka B, Pikka B ST 1 and Pikka C wells.
“SCAL conducted on the nearby Qugruk 8 well has identified key uncertainties with respect to reservoir quality distribution and water saturation as predicted by capillary pressure experiments,” the POD said. “The routine and SCAL work will investigate reservoir quality distribution, water saturation and capillary pressure to reduce uncertainties and narrow the range of outcomes in the Nanushuk reservoir model. In addition to a robust set of routine analyses, a number of SCAL, including relative permeability, capillary pressure, fluid flow velocity and fluid sensitivity analyses were undertaken.”
Fluid sampling for the Pikka B and C sidetracks was gathered via LWD MDT (measurement while drilling) and samples collected during the well test.
“Single-phase fluid samples will help address key remaining uncertainties identified in pre-FEED engineering study, including asphaltene precipitation and miscible gas injection,” the POD said.
Initial modeling of enhanced oil recovery through miscible gas injection has been “encouraging, but additional testing of single-phase oil samples is needed to confirm the results.”
Data acquired in the Pikka B and C wells is being integrated into OSA’s reservoir model. Adjustments, the POD said, “will be made to the stratigraphic framework and distribution of reservoir properties within the static model. Fluid analyses and SCAL will be integrated into the dynamic model through refinement of the relative permeability and capillary pressure curves.”
Results from recent wells are also being integrated into existing 3D seismic interpretation, the POD said, noting “adjustments will be made to the existing elastic inversion and AVO models as appropriate. The results of geophysical modeling will be used to guide the distribution of reservoir properties with the static reservoir model.” (AVO analysis is a technique geophysicists use to determine thickness, porosity, density, velocity, lithology and fluid content of rocks. Successful AVO analysis requires special processing of seismic data and seismic modeling to determine rock properties with a known fluid content.)
OSA continues to advance facility engineering and design and contract negotiations for Pikka unit development, per the POD.
The Pikka B and C wells allowed further appraisal of the giant Nanushuk reservoir for the front-end engineering and design, or FEED, phase of the project, and “inform the subsurface basis of design for planning of development wells and production infrastructure,” the POD said.
An Oct. 22 release of OSA’s parent company’s third quarter financial results said it was on track to enter FEED by the end of this year, as planned.
Key development activities Based upon work conducted under previous POEs, as well as the drilling of the Pikka B and C wells last winter, the POD said the company is “moving forward with development activities to conduct a major hydrocarbon development in the Pikka unit” that will initially tap two of the stacked plays - the Nanushuk and Alpine reservoirs.
“Subject to satisfactory commercial terms and economic conditions,” the key development activities expected to occur in the POD period include:
* Further front-end engineering work that is scheduled for completion in mid-2020, which will help reach a final investment decision by the working interest owners at that time (timing confirmed Oct. 22).
* A civil works program to install gravel roads and pads, as well a bridge over the Miluveach River.
* Procurement of materials with extended delivery schedules.
Future key development activities involve development drilling beginning in early 2021 from an initial development pad, first targeting the Nanushuk reservoir; early production start in 2022 “to acquire additional data in support of reservoir management;” and construction activities for the remaining field infrastructure, such as processing facilities, additional pipelines, etc. that is scheduled to occur in parallel.
And, of course, commissioning of processing facilities and full facility production in 2024.
Civil works over two-years The civil works program, which will be both in the Pikka unit and adjacent to it, is part of a two-year program across winter 2019-20, summer 2020, and winter 2020-21, to establish the necessary civil infrastructure for development. It will involve ice road construction, gravel roads and pads, and bridge and culvert installation.
Gravel will come from the ASRC gravel consolidated mine site and the North Slope Borough gravel mine site F.
Specific winter 2019-20 activities, pending receipt of necessary approvals and agreements, are expected to entail:
* Ice road construction (in support of gravel lay activities).
* Mine site deployment and rehabilitation. (Gravel will be placed for the Nanushuk access road; Nanushuk operations pad; Nanushuk process facility pad; ND-B access road and pad; access road and pad for water access to lake 7903; and initial upgrades to the Mustang Road.)
* Bridge installation across the Miluveach River.
* Culvert installation (cross-drainage and fish passage) along relevant sections.
Placement of gravel for a tie-in pad in the vicinity of ConocoPhillips operated Kuparuk central processing facility 2 is also scheduled.
Summer 2020 work activities will likely involve:
* Pipeline road crossing casing installation.
* Rework of gravel paced in the winter.
* Additional Mustang Road upgrades.
Activities over the 2020-21 winter season are anticipated to include;
* Work not finished in winter 2019-20 and construction of other civil infrastructure.
* ND-C access road and pad.
* Access road and pad for the boat ramp.
* Installation of the Kachemach River bridge.
Temporary infrastructure for the 2020 activities will consist of camps at both mine sites, as well as on-ice infrastructure in the development area, the POD said.
Infrastructure elements Major components of Pikka infrastructure include:
* Nanushuk processing facility to receive produced fluids from the drill sites to convert it to sales quality crude. (The NPF includes power generation for all project facilities.)
* Nanushuk operation pad with the main camp, shops, storage, water and wastewater treatment, and fuel station.
* Three drill sites for the drilling equipment and support facilities for both drilling and completion operations as well as production (e.g. pipeline pigging), routine well testing and process fluid heating.
* Infield pipelines and cables from and to the processing facility and the three drill sites, ND-A, ND-B and ND-C, including multiphase production pipelines, water injection pipelines, gas lift pipelines (HP gas for artificial lift), gas injection pipelines (HP gas for miscible water alternating gas flood oil recovery) and fiber optic and power cables.
* Import and export pipelines and cables from and to the processing facility and any required tie-in pad(s) including an oil export pipeline, a water pipeline, a fuel gas pipeline, a fiber optic cable and a power cable.
* Other civil infrastructure supported by gravel pads with connecting gravel roads.
Future opportunities Once Pikka production operations are underway, OSA will conduct well, reservoir and facility management activities to optimize economic hydrocarbon recovery. Future development opportunities within the unit will be “appraised and evaluated as they become known/understood through these activities,” the POD said.
OSA has completed appraisal drilling activities “sufficient” for defining the resource targets (and surface locations) for the proposed Pikka development.
The development drilling beginning in 2021 will further delineate the resource distribution within the unit.
A participating area has not yet been established in the unit; but an application to establish a PA will be submitted “prior to commencement of regular production,” the POD said.
Additional exploration and appraisal drilling of high-value targets will be conducted where justified, possibly necessitating the need for more PAs.
- KAY CASHMAN
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