Although Eni US Operating’s activities in Alaska tend to represent a small portion of the Milan based company’s worldwide activities, the company has been expressing a positive view of its Alaska interests. That view has recently translated into the completion of new wells in the company’s Nikaitchuq oil field offshore the North Slope.
In addition, drilling has continued for the NN-01 exploration well that Eni spudded in late 2017 on Nikaitchuq’s Spy Island drill site. The well is being directionally drilled under the Beaufort Sea into the Nikaitchuq North prospect in the federal outer continental shelf. The drilling has been proceeding intermittently since the well was spudded.
In January the company re-enforced its Alaska interests by purchasing Caelus Natural Resources Alaska’s 70% interest in the offshore Oooguruk field, to the west of the Nikaitchuq field, thus making Eni the operator and sole owner of Oooguruk.
And in August 2018 Eni purchased 350,000 exploration acres from Caelus - this acreage lies on the eastern North Slope between Prudhoe Bay and Point Thomson.
Although Eni US Operating’s activities in Alaska tend to represent a small portion of the Milan based company’s worldwide activities, the company has been expressing a positive view of its Alaska interests. That view has recently translated into the completion of new wells in the company’s Nikaitchuq oil field offshore the North Slope.
In addition, drilling has continued for the NN-01 exploration well that Eni spudded in late 2017 on Nikaitchuq’s Spy Island drill site. The well is being directionally drilled under the Beaufort Sea into the Nikaitchuq North prospect in the federal outer continental shelf. The drilling has been proceeding intermittently since the well was spudded.
In January the company re-enforced its Alaska interests by purchasing Caelus Natural Resources Alaska’s 70% interest in the offshore Oooguruk field, to the west of the Nikaitchuq field, thus making Eni the operator and sole owner of Oooguruk.
And in August 2018 Eni purchased 350,000 exploration acres from Caelus - this acreage lies on the eastern North Slope between Prudhoe Bay and Point Thomson.
Plan of development
Before the downturn in oil prices in 2014, Eni had been using a number of small drilling projects at Nikaitchuq to try to bolster production from the field. But the oil price fall resulted in those drilling activities being suspended. The activities had included the addition of multilaterals to existing wells; evaluating the potential of a sand reservoir below the producing reservoir; and drilling to the west and east of the existing well pattern.
The field has been developed by drilling from an onshore pad at Oliktok Point and from the offshore Spy Island drill site. At the time of drilling suspension in 2014 an initial Oliktok Point drilling program had been completed but a Spy Island program remained unfinished. New permitting and drilling indicate that the Spy Island program is back underway.
The Nikaitchuq plan of development, approved by the Alaska Department of Natural Resources and the U.S. Bureau of Ocean Energy Management for the period through September, envisaged the possibility of drilling an additional three new wells and eight lateral wells from Spy Island. Two of the wells would be injectors, while the remaining well and the laterals would be producers. In general, the concept is to convert some existing wells to multilaterals, while also drilling some new wells from the surface.
Two laterals completed
Eni did complete two new lateral production wells, the SP33-W03L1 and SP30-W01L1 wells. The company has also permitted a new development well, the SP03-NE2, and a lateral from that well. The SP33-W03L1 well was spudded May 25 and completed on June 20, while the SP30-W01L1 was spudded on June 21 and completed on July 20 according to Alaska Oil and Gas Conservation Commission records.
The SP prefixes indicate that these are production wells drilled from the Nikaitchuq Spy Island drill site.
Eni has also been continuing with maintenance activities on surface facilities, and on preparing tie-ins for future wells to be drilled. And the company has conducted multiple well workovers in the field.
According to the latest Nikaitchuq plan of development, which runs through to September 2020, the company anticipates continuing with facility maintenance and well workover activities through the coming year. Depending on the timing of drilling associated with Nikaitchuq North exploration, the company also anticipates the possibility of drilling three new development wells from Spy Island: one production well and two water injectors.
Nikaitchuq North
The Nikaitchuq North NN-01 well was started as part of an initiative to find new oil resources in federal acreage to the north of the existing field. The ultra-extended reach well is targeting Harrison Bay Block 6423, using the Doyon 15 drilling rig, the same rig that is used for development drilling from Spy Island in the existing Nikaitchuq field. Clearly, the idea is to try to use Nikaitchuq North resources to bolster reserves and production for the overall field. And, with just one rig in operation, there is obviously a linkage between the timeframe for the Nikaitchuq development drilling program and the Nikaitchuq North drilling - the drilling of new development wells could not begin until after the suspension of the NN-01 drilling.
According to Eni Alaska Vice President Whitney Grande the Nikaitchuq production facility has spare capacity, with a capacity of 40,000 barrels per day, expandable to 50,000 bpd. Data published by the AOGCC indicates that Nikaitchuq production in July averaged 20,175 bpd, compared with 18,545 barrels per day in July 2018 (the production increase is presumably related to the new development drilling).
Drilling delays
Eni had originally planned to complete the NN-01 well in mid-February 2018, and then to conduct flow testing on any oil discovery. However, the drilling did not proceed to plan - the drilling was eventually suspended on Aug. 23, 2018, because of seasonal drilling restrictions. The drilling is presumably challenging, given that, with an expected measured depth of about 35,000 feet, the well would be the longest extended reach well of its type in Alaska.
According to Eni’s latest plan of operations the drilling of NN-01 restarted in January but was suspended in April at a measured depth of 30,010 feet because of operational limitations. Petroleum News understands that there was a need for modifications to the drilling rig. The plan of operations says that Eni anticipates continuing the drilling of the well in early February 2020, with the well expected to reach its target measured depth by the third quarter of the year. A reliable Petroleum News source has indicated that testing of the well is anticipated in 2020.
Eni has not publicly identified the drilling target at Nikaitchuq North. The Schrader Bluff formation that hosts the reservoir for the Nikaitchuq field is known to extend a long way north under the Beaufort Sea - it is possible that Eni is seeking a more northerly oil pool in this formation. However, there are other possibilities that, based on circumstantial evidence such as the planned drilling depth, may be more likely. One contender seems to be Jurassic Alpine sands, equivalent to reservoir sands in the Alpine oil field and deeper than the Schrader Bluff. In addition, Kerr-McGee, the previous Nikaitchuq operator, had talked about the possibility of testing the Jurassic Nuiqsut sandstone to the north of the field.
Oooguruk field
As with Nikaitchuq, the Oooguruk field saw significant impacts from the 2014 oil price downturn: In May 2016 Caelus, then the operator, suspended all drilling operations at the field. That drilling suspension continued up to the point at which Caelus sold its interests in Oooguruk to Eni. Eni became the new field operator on Aug. 1 and has thus far not announced any new development plans for the field.
Although not doing any new drilling, Caelus had been conducting some well workovers, including the replacement of some electric submersible pumps. This summer, with the concurrence of Eni, the company carried out some maintenance work in the field’s surface facilities. The field has been producing from three pools: the Kuparuk, Nuiqsut and Torok. The Torok formation contains the oil pool for the planned Nuna development that is being purchased by ConocoPhillips, separately from the Oooguruk field. However, the Torok does produce on the Oooguruk offshore production island.
The current plan of operations for the field indicates that two production wells and two injector wells are active in the Kuparuk pool, although Kuparuk production is currently shut in. Caelus has been hoping to obtain regulatory approval for commingling or alternating Kuparuk and Nuiqsut production through one of the Nuiqsut wells. The development area for the Nuiqsut pool has 18 production wells and 10 injection wells, the plan of operations says. Caelus has been in the process of upgrading the system that supplies seawater for injection into the reservoir. The Torok pool has three active wells - two production wells and an injector well. Two wells drilled from the onshore Nuna drill site have been suspended.
In January Eni announced a goal of raising its total Alaska North Slope production to 30,000 barrels per day by drilling more wells at both Oooguruk and Nikaitchuq. In July Oooguruk production averaged 8,720 bpd, compared with 9,696 bpd in July 2018. Taken together, the combined Oooguruk and Nikaitchuq production falls a bit short of that 30,000 bpd target.
Exploration acreage
Eni has yet to announce any specific plans for exploration in the 350,000 exploration acres that it purchased from Caelus. In 2015 Caelus acquired 175 square miles of new 3D seismic data and reprocessed another 275 square miles of existing 3D seismic, with the objective of imaging prospects in the acreage. Caelus said that, while there are multiple plays in proven stratigraphic horizons within the acreage, surrounding legacy wells confirm relatively shallow Brookian reservoirs and hydrocarbon charge, as well as deeper petroleum system elements. The company also commented that the proximity of infrastructure with available capacity reduces the resource volumes needed for viable development.
