Oil Search pushes up production date for Pikka

  • Oil Search Alaska President Keiran Wulff discusses his company’s acquisition of a stake in the Pikka prospect in 2017. The company is planning to start production a year sooner than expected according to plans submitted to the Alaska Division of Oil and Gas. (Photo/Michael Dinneen/For the Journal)

The company developing one of the largest oil prospects on the North Slope has applied with state regulators to change its plans and start producing oil a year early.

Oil Search Alaska submitted a modification to its July 2019 Plan of Operations for its Nanushuk project in the Pikka Unit on Sept. 26 with the Division of Oil and Gas.

The amended plan calls for some changes to the layout and size of the project’s three drill sites near the Colville River delta and moving the tie-in pad that will connect to ConocoPhillips’ Kuparuk River Unit that will link the project’s pipelines to the rest of Slope oil infrastructure at a site that won’t interfere with existing operations.

But it also requests changes to the Nanushuk drill site B and associated pipelines that will allow the company to begin producing up to 30,000 barrels per day from the pad in 2022.

Alaska leaders for Australia-based Oil Search had previously pegged late 2023 for startup of its Nanushuk oil project, which will require nearly $5 billion of investment and could produce upwards of 120,000 barrels of oil per day at its peak.

According to the plan modification document, Oil Search hopes to initially transport liquids produced from drill site B to the Kuparuk Central Processing Facility-2 via pipelines that will pass through the Nanushuk Processing Facility site while it is being constructed.

When its own Nanushuk Processing Facility is operational in 2023 or 2024, Oil Search will shift from sending unprocessed liquids to the Kuparuk facilities to sending sales-quality oil through them for shipment down the Trans-Alaska Pipeline System.

The project changes will increase its overall gravel footprint by approximately 0.2 acres and add roughly 5,000 cubic yards of fill in total, according to the documents submitted to DOG.

An Oil Search Alaska spokeswoman did not respond to questions about the changes in time for this story.

This winter the company plans to conduct additional appraisal drilling and begin laying gravel for roads and work pads, Oil Search leaders have said.

Oil Search received a favorable environmental impact statement record of decision for the project from the U.S. Army Corps of Engineers last May.

The company reached a deal with Armstrong Energy in October 2017 to buy into Pikka and take over as the project operator for $400 million. This year the company exercised an additional $450 million option to completely buy out Armstrong and GMT Exploration Co., a silent working interest owner in Pikka, to take a 51 percent stake in the Unit. Spanish major Repsol holds a 49 percent interest in the Pikka Unit and the Nanushuk project.

Most of the oil would come from its namesake shallow, conventional Nanushuk formation. It has been the source for smaller nearby discoveries by ConocoPhillips as well as Conoco’s Willow project in the National Petroleum Reserve-Alaska, which is similar in scale to Pikka but a couple years behind in the development process.

The company announced Oct. 1 that current Oil Search Alaska President Keiran Wulff will take over for retiring Managing Director Peter Botten in February. The company’s current chief operating officer for its Alaska unit, Bruce Dingeman, will replace Wulff as its Alaska President.

Elwood Brehmer can be reached at [email protected].

Updated: 
10/02/2019 - 9:43am

Comments