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Making it work Pioneer studies developing Oooguruk from Beaufort drill site with 48 wells Kristen Nelson Petroleum News Editor-in-Chief
Pioneer Natural Resources Alaska and its partner Armstrong Alaska are talking to regulators about what their Beaufort Sea Oooguruk development would look like, if the project goes ahead.
Susan Spratlen, Pioneer’s vice president of corporate communications, reminded Petroleum News Feb. 24 that the project has not been sanctioned and said a general project description being circulated was prepared to give contractors and permitting agencies an idea of what the current thinking is on how the project might proceed.
But, Spratlen said, Pioneer has not approved the project or finalized the plans, and is still working to make it economic.
In fact, Ken Sheffield, president of Pioneer Natural Resources Alaska told Petroleum News, things are about where they were when Pioneer updated its Alaska activities in a Jan. 13 news release: Pioneer is moving forward with engineering studies and beginning to engage regulatory agencies.
The company’s Jan. 13 release says Pioneer “completed an extensive technical and economic evaluation of the resource potential” at Oooguruk in the fourth quarter of 2004 and has committed $5 million during 2005 for front-end engineering and permitting activities to further define the scope of the project. If additional work confirms favorable development economics, the company said in the release, it will seek regulatory approval to develop the field in 2006 targeting first oil in 2008.
Sheffield told the Resource Development Council for Alaska’s annual conference in November that Pioneer will be working on fiscal terms for Oooguruk with the state. Sheffield called making Oooguruk economic “quite challenging,” and said the company will be discussing royalty reduction with the Alaska Department of Natural Resources because “this is an economically challenged project and we really need to protect the down side in the event that oil prices were to fall to a low level, and that’s an essential part of us moving forward with this project.”
Leases in the unit have 16.67 percent royalties. Pioneer submitted a confidential economics model of its assessment of the Oooguruk development to the Alaska Department of Natural Resources Division of Oil and Gas in February “to assist in its internal review of Pioneer’s request for lease terms modifications.” Company looking at island development In the general project description submitted to the Division of Oil and Gas — information Pat Foley, Pioneer Natural Resources Alaska’s manager of land, commercial and regulatory affairs, called a “communication document” for talking to agencies — Pioneer said it is looking at developing the Oooguruk discovery from a five-acre drill site in approximately four feet of water near the mouth of the Colville River. Both Kuparuk and Nuiqsut (Jurassic) reservoirs are being considered for development and production is estimated to be less than 20,000 barrels of oil per day.
The development being looked at would include approximately 48 wells in containment modules with three-phase production transported to shore in a buried subsea “pipe in pipe” flowline.
There will also be a one-half acre onshore gravel pad at the shore transition site for automated valves and valve housing.
Offshore and onshore import/export flowlines and utilities would terminate at a Kuparuk River unit drill site facility which will be expanded to allow for Oooguruk tank storage, pig launching/receiving and chemical injection facilities.
The document says Kuparuk River unit facilities, operated by ConocoPhillips Alaska Inc., would process the three-phase production stream, but Foley said that is a discussion that hasn’t yet taken place. Unit approved in 2003 The 20,394-acre Oooguruk unit was approved by the state in July 2003. Oooguruk is in Harrison Bay, offshore Alaska’s North Slope, north and west of and contiguous with the Kuparuk River unit.
Three of the tracts in the unit date from a state oil and gas lease sale in 1997 and the other nine leases were acquired by Armstrong Alaska in an October 2001 state oil and gas lease sale. Armstrong assigned Pioneer Natural Resources a 70 percent working interest in its leases in late 2002 and Pioneer acquired the other leases in early 2003.
Pioneer drilled three wells: the Ivik No. 1 was spud Feb. 24, 2003, followed by the Oooguruk No. 1 and the Natchiq No. 1.
On March 31, 2003, Pioneer said it had a 1,300 barrel per day oil discovery from the Jurassic formation. The Kuparuk C sands were the primary target. The company said it was testing “a possible extension of the productive sands in the Kuparuk River field into the shallow waters offshore. Although all three of the wells found the sands filled with oil, they were too thin to be considered commercial.”
But the wells “also encountered thick sections of oil-bearing Jurassic-aged sands that are currently being tested,” Pioneer said, and reported a 1,300 barrel per day sustained rate from the first well.
When the state approved formation of the Oooguruk unit in July of 2003 it said there are three oil-bearing Jurassic sands southwest of Oooguruk: the Nechelik, Nuiqsut and Alpine sandstones. The Alpine sandstone from the Alpine field discovery well, the Bergschrund No. 1, is not present in the northern Colville Delta area. State: key is producing low-API gravity oil “The key to unlocking the reserves within the Jurassic sands is producing the low API gravity oil without damaging the formation with drilling fluids,” the division said in its unit decision. Nuiqsut sands were tested in several Colville Delta exploration wells: the Texaco Colville Delta No. 1 (1,075 bpd of 25 degree API oil); the Texaco Colville Delta No. 2 (409 bpd of 24-40 degree API oil); the Texaco Colville Delta No. 3 (374 bpd of 27.7 degree API oil); and the ARCO Kalubik No. 1 (410 bpd of 21 degree API oil).
Pioneer completed the Oooguruk well, a vertical hole, to a depth of 6,900 feet; the Natchiq was completed to a measured depth of 7,500 feet and a true vertical depth of 6,740 feet; the Ivik was completed to a measured depth of 6,943 feet and a true vertical depth of 6,942 feet.
Pioneer said it found oil in two Jurassic-aged sands, which the company described as “very similar in geologic age, permeability and porosity to those in the prolific, onshore Alpine field to the southwest.”
Pioneer fractured the Ivik and got a sustained rate of about 1,300 bpd. Spratlen told Petroleum News in April 2003: “The issue is determining the permeability, how much oil there is and what the recovery factor will be.”
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