Drilling operations are returning to the Cosmopolitan oil field in the Cook Inlet and the site could be producing oil within five years, Pioneer Natural Resources officials said Nov. 17.
Pioneer, an Irving, Texas-based company that took full control of the Cosmopolitan field in 2006, will conduct a well appraisal on part of the reservoir already tapped into before drilling another separate appraisal well.
"The next plan is to do a new appraisal well, not a well that is Hansen 1B or something," said Joey Hall, Pioneer's operations manager. The statement demonstrates Pioneer's intent to broaden its work area within the Cosmopolitan.
Following the appraisal, Pioneer will decide whether to proceed with production-drilling operations on Cosmopolitan, said Tadd Owens, government and public affairs director.
"The tests will tell us a lot more about the reservoir," Owens said. "At that point we will conduct a cost effective analysis, look at oil prices and see where the company is."
Should the site, located about two miles offshore in the southeast Cook Inlet, become an oil producer, Pioneer is also planning a separate, 20-acre offshore processing plant facility. The company submitted an all-encompassing building permit to the state covering the processing plant, water treatment plant and other drilling operations, according to Owens.
Owens said the "all-in costs," including drill operations and the treatment plant, could total $400 million to $500 million.
Pioneer is not planning an oil pipeline, but instead will rely on truck transportation to carry the oil to Tesoro in Nikiski. Tesoro would be the primary purchaser.
Following Hall's presentation at the Nov. 17 Alliance meeting in Kenai, community members expressed some concern over an increase in traffic as a result of the oil transport.
At its peak, the site is expected to produce about 8,000 barrels of oil per day. During peak production, which Owens said likely would not last more than a few years, Pioneer would require about 30 trucks per day to transport the oil. But during most of the plant's 25-year expected lifetime, no more than nine trucks would be needed a day, according to Hall.
"The total traffic in the area will increase only by 0.5 percent," Hall said, adding that the round-trip delivery would cover about 75 miles.
"We're pretty confident that it won't be a significant change to the daily drive on the peninsula," Owens added.
"It's my own personal opinion, but personally I think we can all wait to go fishing if they're going to be drilling oil in the Cosmopolitan," said the Alliance's Bob Favretto.
The project would result in about 80 construction jobs and 50 to 75 drilling jobs. Hall said the drilling jobs should last a few years, but once the site became operational, only six people would be needed to keep it running.
Hall said drilling in the Cosmopolitan will be a trying process.
"It's as complicated as it's ever been," he said. "There's nothing easy about drilling at Cosmopolitan."
Pennzoil first discovered the Cosmopolitan field in 1967. ConocoPhillips formed a partnership with Pioneer Natural Resources in 2001, drilling two wells, the Hansen 1 and Hansen 1A wells, as the Cosmopolitan unit. In 2007, after assuming 100 percent of the field's interest, Pioneer drilled a third well. The Cosmopolitan basin is estimated to contain 30 to 50 million barrels of oil equivalent.
Work at Cosmopolitan has been put off in the past.
In November 2007, Pioneer's tentative development schedule planned for permitting in 2008, facility construction in 2008-09 and development drilling in 2009-10. In January, Pioneer put off a 2009 appraisal because of low oil prices.
