Caelus sanctions Nuna development
Caelus Energy has given formal approval for its new $1.5 billion Nuna oil project on the North Slope and has started construction, the company confirmed Friday.
A letter notifying the state Department of Natural Resources of the approval was sent to the agency March 10 to satisfy a requirement of a temporary state royalty modification for the Nuna project.
Gravel mining and hauling for a 2.5-mile access road and 22-acre drillsite began Jan. 25, Caelus Vice President Pat Foley told state Deputy Natural Resources Commissioner Marty Rutherford in the letter.
The road and pad are to be finished this winter, with construction of production facilities planned for next year, company spokesman Casey Sullivan said in an interview.
The company has signed authorizations for $480 million in expenditures to date and is preparing additional expenditure authorizations for an additional $800 million, according to the letter.
Nuna is to be producing in 2017 and is expected to reach peak production rates between 15,000 barrels per day and 20,000 barrels per day.
There have been reports that Caelus had cut back some activities related to Nuna and Sullivan confirmed that some facility fabrication work has been rescheduled. Overall, the project is on track, he said.
Any reported slowdown of North Slope work causes discomfort in the support contractor community. Earlier this week KTUU Channel 2 in Anchorage reported that 75 employees of ASRC Energy Services, a major North Slope contractor, had been released from their work in the Kuparuk River field, which is operated by ConocoPhillips.
ASRC Energy later confirmed, in a press release, that “recent changes in our market have resulted in the company restructuring its North Slope operations to be more efficient and productive in a new and highly competitive business environment.”
Caelus is pushing Nuna along, however.
“Our Nuna development has been fully sanctioned, construction activities have commenced and we are safely on track to satisfy all of the milestones required in the Jan. 20 royalty modification,” agreement with the state, Foley said in the letter to Rutherford.