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Pioneer has a range of Alaska prospects Company expects to be first independent to operate production on the North Slope, CEO Scott Sheffield tells symposium Kristen Nelson Petroleum News Editor-in-Chief
Alaska’s North Slope has a role in Pioneer Natural Resources’ near-term, mid-term and long-term plans, the company’s chairman and chief executive officer, Scott Sheffield said July 7 at an Independent Petroleum Association of America Oil & Gas Investment Symposium in London.
Pioneer expects to be the first independent to actually operate on the North Slope with its Oooguruk discovery, scheduled for sanction this year, Sheffield said. Oooguruk, a satellite near existing infrastructure, is a near-term prospect; mid-term prospects include the Storms area, south of Prudhoe Bay; long-term (five to seven years) include the National Petroleum Reserve-Alaska.
“One of the reasons that we’re seeing much higher crude prices is people in general are not exploring,” Sheffield said. “We’re seeing less exploration in the last several years than any time in history … People are not exploring.” Pioneer, he said, has taken a long-term strategy, “trying to find the right basins and also we went out and raided the majors over the last six to seven years, hired some of their best people.” Pioneer has put in a lot of the processes that the majors use, he said: “a very disciplined process” for peer review and post audit. Oooguruk coming on in 2008 Sheffield said Pioneer acquired interests in 1.6 million acres on the North Slope starting two years ago, when it expected oil prices to be in the $30 per barrel range. This includes 20-30 percent working interests in 1.4 million acres in NPR-A, 50 percent working interest in the Storms area south of Prudhoe and Kuparuk, where it is the operator; and a 70 percent working interest in 53,000 acres at Oooguruk.
Pioneer had the first independent-operated discovery on the North Slope, Sheffield said: “We’ll be sanctioning that project later this year at Oooguruk.” The North Slope, where the company is looking for oil, has under-utilized capacity, he said. “
We’ll be drilling about five to six exploration wells per year” in Alaska, Sheffield said, noting that Pioneer’s partner is ConocoPhillips Alaska, “the most active explorer” on the North Slope.
Pioneer is building a rig, “teaming up with an Alaska Native company and a Canadian drilling contractor,” Sheffield said. He described the rig as unique. The rig will be more mobile, “more efficient” and “less costly” for drilling on the North Slope, Pioneer said. The rig will be ready this winter.
In a slide accompanying the presentation current Oooguruk work is described as moving the project to a go-forward decision: island, pipeline and rig design are under way as is permitting. If the project is sanctioned, a gravel island would be built and offshore buried pipeline would be installed in 2007; development drilling would also begin that year, with first oil in 2008.
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