Sidebar: Pioneer likely moving forward on gravel island

Kay Cashman

Petroleum News

In addition to getting preliminary approval for royalty reduction on its Oooguruk project from the State of Alaska, Pioneer Natural Resources says its proposed North Slope oil development is moving forward on other fronts as well, which could potentially allow the company to lay gravel for the production island in first quarter 2006.

Just prior to the state's royalty finding the North Slope Borough conditionally accepted Pioneer's application for rezoning the Oooguruk area to allow for development, a process that Pioneer's Alaska subsidiary president says he hopes will be final in January,

In an interview with Petroleum News on Dec. 20 (2005), Ken Sheffield said Pioneer is also waiting for permits from the U.S. Corps of Engineers, which the company hopes to get in January.

"The goal is with the receipt of all the permits and a final binding decision on royalty relief we're hoping to move forward with the gravel laying operation in first quarter 2006," which would allow Pioneer to go into the winter season of 2006-07 with the island complete, Sheffield said.

In early 2007 Pioneer would then "install the subsea flowline and get the drill site hardware on the gravel island," he said.

Pioneer does not yet have a "definitive" facility sharing agreement with Kuparuk River unit operator ConocoPhillips, where Oooguruk oil will be processed, but Sheffield said it does have a "Memorandum of Agreement with Kuparuk unit owners that lays the foundation for that future facility access agreement. ... The KRU ballot 255 and 255A (backout portion) will be the foundation of the future agreement."

Sheffield would not comment on when the project might be sanctioned by Pioneer.

--Kay Cashman