A U.S. Army Corps of Engineers permit appears to be last thing Pioneer Natural Resources Inc. needs to get work underway this winter on the company's Oooguruk offshore oil project. Pioneer hopes to get the permit in time to begin hauling gravel for the construction of an offshore gravel production island in shallow waters of the Beaufort Sea six miles offshore the North Slope. Oooguruk is north of the Kuparuk River field on the North Slope.
If the corps permit is received in time for gravel island construction this winter, Pioneer can begin construction of oil flow lines next winter and to start drilling the 38 production wells needed to produce oil from the project, Pioneer president Scott Sheffield told the Alaska Support Industry Alliance's annual "Meet Alaska" conference in Anchorage Jan. 20. Oooguruk could be in production between 2008 and 2010, producing 18,000 to 20,000 barrels per day.
In other activity, Pioneer is drilling its first exploration well with the new "Arctic Fox" drill rig built by Doyon Drilling Co. The "Hailstorm" well, in the Storms prospect area south of the Kuparuk field, is the first of three wells now planned this winter, although the company hopes to actually drill four wells, Sheffield told the Alliance.
Pioneer took delivery of the Arctic Fox drill rig in early December. It is a lightweight, highly mobile land rig that can be moved quickly from one location to the next, Sheffield said.
The company is also involved with ConocoPhillips in the "Cosmopolitan" oil prospect in Cook Inlet, near Anchor Point on the Kenai Peninsula. A detailed 3-D seismic survey of the prospect has been completed, and decisions will be made next summer on how to proceed with the project, Sheffield said.
With increasing activity, Pioneer is adding to its Alaska staff. The company now has 26 employees and will add six or seven this year, Sheffield said.
Pioneer is bullish on Alaska partly because of the prospective geology. "Alaska has been lightly explored over the last 20 years," Sheffield said. The company also likes the openness and stability of government in the state, he said.
Like others in industry, Pioneer is becoming increasingly concerned with political stability and taxation initiatives in many other countries. The company is now leaving Argentina because of that nation's changes in tax policies, Sheffield said.
Underlying much of the company's work, however, is an expectation that oil prices will remain strong. "We're a firm believer in the idea that we've entered a new, higher oil price regime. We expect to see oil prices between $50 per barrel and $100 per barrel over the next several years," Sheffield told the Alliance.
Tim Bradner can be reached at tim.bradner@alaskajournal.com.
