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Producers 2023: Eni integrating Oooguruk and Nikaitchuq
Power-sharing project would connect electricity systems at the nearby fields
Eric Lidji for Petroleum News
On the surface, the biggest development at the neighboring Oooguruk unit and Nikaitchuq unit in the nearshore state waters of the Beaufort Sea is renewed drilling.
After the uncertainty of the worst of the pandemic years, operator Eni US Operating Co. Inc. is planning another active year of drilling and maintenance activities at both units.
But for those in the oil patch who have been following the story of those two units over the past two decades, a more intriguing development might be underway: infrastructure.
Oooguruk and Nikaitchuq emerged from similar circumstances in the late 1990s and early 2000s. In the immediate aftermath of the Charter for the Development of the Alaska North Slope, the small Denver-based independent Armstrong Oil & Gas proved up both nearshore plays and brought on larger partners to oversee development and start-up.
The large Texas-based independent Pioneer Natural Resources took over Oooguruk, bringing the unit into production in mid-2008. The project was remarkable in several ways. Pioneer was the first independent to bring a North Slope oil field into production, and it completed the task in about five years, notably quicker than the basin average.
Pioneer worked on Oooguruk with minority partner Eni US Operating Co. The American arm of the large Italian multinational company, Eni also became the owner and operator of the neighboring Nikaitchuq unit. It brought that unit into production in early 2011, marking another expansion beyond the "Big 3" players: BP, ConocoPhillips and Exxon.
Despite all those similarities, there were some notable differences, too.
Eni was a much bigger company than Pioneer. Nikaitchuq was a bigger discovery, too. Early estimates for Nikaitchuq put primary recovery at 220 million barrels, compared to an estimate of 90 million barrels proposed during the early years of the Oooguruk unit.
The scale of the developments also differed.
Pioneer developed the Oooguruk unit from a single pad: the six-acre man-made Oooguruk Island built off the coast of Oliktok Point. Eni developed Nikaitchuq from two pads: the onshore Oliktok Point Pad and the offshore Spy Island Drillsite.
Even more consequentially, Eni was able to afford standalone processing facilities to handle production from Nikaitchuq. Pioneer negotiated a facility sharing agreement with ConocoPhillips Alaska Inc. to utilize spare capacity at Kuparuk River Unit facilities.
Pioneer sold the unit to Caelus Natural Resources Alaska LLC, which sold it to Eni in 2019. By the end of May 2023, Eni reported cumulative oil production of 77.3 million barrels from 62 wells at Nikaitchuq and 48 million barrels from 42 wells at Oooguruk.
With both units now approaching the midpoint of their original life expectancy, perhaps it was inevitable that the need for efficiency would warrant some administrative changes.
Eni took the first step in that direction recent years by acquiring the Oooguruk unit, and now the company is increasingly integrating the two units. The company is currently working to interconnect the power supply for both units, in a project set for 2025.
Whether this marks the beginning of a wave of infrastructure projects at the units -- including midstream and processing infrastructure -- still remains to be seen.
Oooguruk Going into its most recent development year for the Oooguruk unit, Eni US Operating Co. planned seven rig workovers and one new well toward the end of the year.
The aging unit had other plans.
By the time Eni filed its current development plan for the year ending Sept. 30, the company had completed 12 workovers on eight wells and had deferred the new well for a year.
The original program had called for recompleting one well (ODSN-06), installing electric submersible pumps in three wells (ODSN-02, ODST-45A, and ODST-39) and replacing electric submersible pumps in three wells (ODSN-31, ODSK-41, and ODSN-25).
The program expanded due to "premature equipment failures and supply limitations," as Eni explained in filings with state regulators. The company started the year in January by recompleting the ODSN-06 well and then conducted replacement activities at the ODSN-31, ODSK-41, and ODSN-25 wells, as planned, through the summer and into early fall.
By October 2022, the program had changed.
First the company isolated the Kuparuk formation at ODSN-29. Then it returned to ODSN-31, ODSK-41, and ODSN-25 for unplanned maintenance, such as replacing cables or re-replacing an electric submersible pump. The company had to remove a stuck subsurface safety valve from the ODSN-10 well and then tend to a failed cable at the ODSN-02 well. Supply delays for that cable prompted the company to put the rig on standby for 10 days in February, followed by regularly scheduled work on ODSN-04.
The program not only involved more work but also took longer. The original schedule was supposed to finish in October 2022. The actual schedule finished in April 2023.
Now, Eni plans to drill two new wells this year (ODSN-05 and ODSN-09) and conduct one workover on the ODSDW-44 disposal well, with other workovers a possibility.
The company is also planning two major infrastructure projects.
The first is the Partial Gas Processing (PGP) project. The project would install 20 million cubic feet per day of natural gas processing and compression equipment at the unit.
According to the company, "Engineering is complete and nine processing and pipe rack modules are currently in shop fabrication with selected modules planned to ship to Eni's Oooguruk Transfer Point (OTP) in August 2023." Start-up is scheduled for January 2024.
The second is the Electrical Power Sharing project. The project would create a power sharing system between Oooguruk and the neighboring Nikaitchuq unit, which are both owned and operated by Eni. According to the company, "Engineering is complete and preliminary procurement activities have been initiated." Start-up is set for mid-2025.
Pool data The Oooguruk unit covers some 35,285 acres across 16 leases and is developed from a man-made offshore drilling site (ODS) in the nearshore waters of the Beaufort Sea. The unit has three participating areas: Nuiqsut, Kuparuk and Torok. Oil is commingled on the surface and piped to ConocoPhillips' Kuparuk River Unit CPF-3 at Oliktok Point.
At the end of September 2023, the Oooguruk unit had been developed through 42 wells, including 27 producers in the Oooguruk Nuiqsut participating area, five producers in the Oooguruk Kuparuk participating area, three producers in the Oooguruk Torok participating area, two ONPA-OKPA dual completion wells, one Class I & II disposal well, and four other well completions outside of existing participating areas.
The Oooguruk Torok participating area was offline during the year ending Sept. 30, 2022, "due to the high total gas-oil ratio required to produce the wells utilizing the gas lift and recurring tubing hydrate blockages in ODST-45A," according to Eni. The company had planned to install electric submersible pumps at ODST-45A and other wells in the participating area but deferred the project "to complete higher-priority Oooguruk wells during the rig workover campaign. Ultimately, the timing of the OTPA ESP recompletions will be constrained to future budget approvals and equipment availability."
Nikaitchuq At the nearby Nikaitchuq unit, Eni conducted drilling and maintenance from the Oliktok Point Pad and from the Spy Island Drillsite under its 15th plan of development.
Between December 2022 and May 2023, the company completed workovers at the OP10-09, OI06-05, OI07-04, OP03-P05, OI20-07 and OI13-03 wells from the Oliktok Point Pad before cold stacking Nordic Rig 4. Workover projects included replacing electric submersible pumps, replacing injection packers, and running new injection packers.
Between September 2022 and May 2023, Eni drilled two producers -- the SP41-E3 and SP42-NE4 production wells, each with an associated lateral -- and the SI43-NE3 injector from the Spy Island Drillsite using Doyon Rig 15. The company also completed workovers at the SP31-W7, SP03-NE3, SD37-DSP1, SP21-NW1, SP36-W5, and SP10-FN05 wells. The workovers at Spy Island mostly involved replacing completions.
This year In the current development year, Eni is planning a similar program to this past year: workovers from the Oliktok Point Pad and new drilling from the Spy Island Drillsite.
The company expects to warm up Nordic Rig 4 in January 2024 for an as-yet-determined workover program designed to "restore, sustain, and increase" Nikaitchuq production.
The company also expects to warm up Doyon Rig 15 in January 2024 to drill three new wells and a lateral from an existing well from the Spy Island Drillsite. The company also plans to "reclaim the NN01 Slot for future Nikaitchuq Development use" during the year.
The company is not planning any workover activities from Spy Island.
The NN01 well is a remnant of an exploration program Eni undertook in 2018 targeting offshore acres in federal waters north of the existing state unit. The company planned a two-well campaign but suspended the NN01 well shy of target depth due to drilling complications and cancelled the NN02 well after partner Shell backed out of the project.
Eni initially received a two-year deferral but ultimately allowed the leases to expire.
Nikaitchuq currently includes 62 wells -- 34 producers and 25 injectors. The production wells include 23 from the Spy Island Drillsite and 11 from the Oliktok Point Pad. The unit also includes two disposal wells (one at each pad) and three water source wells.
Expansion Over the past decade, Eni has been looking at several strategies for expanding production at the unit: dual laterals, N sand development and drilling beyond unit boundaries.
Dual laterals provide access to more of the underground reservoir without requiring additional surface wells. To date, the company has completed dual laterals on 29 wells at the Nikaitchuq unit -- 21 from the Spy Island Drillsite and eight from the Oliktok Point Pad. These wells all target the OA sand of the Schrader Bluff oil pool at Nikaitchuq.
Eni previously drilled the OP19-T1N well to test the potential of the N sand. The well is currently inactive. The company plans to drill an N sand producer/injector pair sometime in the first half of 2024 to assess the prospects of future development in that stratum.
Other projects planned this year include drilling the SP05-FN7 L1 lateral, drilling the SP44-S5 injector to replace OI15-S4 and converting the SP40-E4 producer into an injector. All these injection wells support enhanced oil recovery at Nikaitchuq.
The company primarily uses waterflooding to improve recovery at Nikaitchuq, with most wells drilled in producer/injector pairs that drain into horizontal laterals.
The company launched a one-year polymer injection test at the Oliktok Point I-2 well in late October 2019 but cut the program short in late March 2020, after 154 days, due to logistical complications arising from the early days of the coronavirus pandemic. The results of the shortened test were inconclusive, leading the company to try again at Oliktok Point I-2 with a second test running from mid-March 2021 to mid-December 2022.
"The successful execution of this pilot test allowed Eni to gather important information about the effectiveness of polymer injection into the Schrader Bluff OA sands in the Nikaitchuq field," the company wrote in its plan. "Key results of the study included the effects of polymer injection on the neighboring production wells, indications about polymer injectivity over time, and tracer arrival times. These findings provided valuable expertise in developing a case to support a future full-field polymer injection project."
According to the company, the test yielded approximately 120 barrels per day of additional oil production. The company is now considering full field implementation.
In addition to N sand development, dual laterals, and enhanced oil recovery, Eni expects to apply for an expansion of the existing Schrader Bluff participating area boundaries.
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