The start of production from the Eni-operated Nikaitchuq project on Alaska's North Slope represents the first standalone development by a new entrant into Alaska's oil and gas industry.
David Moles, vice president of special projects at Eni, outlined the process and challenges of the Nikaitchuq, which means "perseverance against nature," at the Offshore Technology Conference in Houston on Wednesday.
Moles said the company knew nothing about Alaska when it became operator, but compensated by hiring the right people. The team developing Nikaitchuq was understaffed, requiring all team members to have broad responsibilities, Moles added. The service providers working on the project also provided help.
Eni, which had been a partner in the project, became the 100 percent operator and owner of Nikaitchuq in 2007. After addressing the issues related to the original operator's plan and studying how to process the oil, the project was sanctioned in early 2008.
In August, the company will finish its onshore drilling campaign at Nikaitchuq. Onshore production began in January 2011, and offshore production began in November of last year. Currently, Nikaitchuq is producing 8,000 barrels of oil per day (bopd) from 30 offshore and 22 onshore wells. Nikaitchuq has reserves of 187 million barrels of oil equivalent. Nikaitchus is the most northern oil development in the United States.
Eni had to drill using extended reach wells, which presented a technical challenge. The company addressed sticking issues by using its proprietary technology to circulate mud while making pipe.
Nikaitchuq's oil, which is so thick you could use it as an ice cream topping, is produced by adding three parts water to one part oil to get oil to flow, then separating it out.
Nikaitchuq will be a huge water cycling project, Moles said.
Gravel for building roads at the project site did not pose an issue as it will in other areas of Alaska.
The company worked with local indigenous groups to address operational issues that could potentially interfere with local residents' subsistence hunting patterns. The Nikaitchuq development is both onshore and offshore, with an offshore drilling pad, Spy Island.
"The local residents especially paid attention to water activity more than activity on the tundra," Moles added.
Eni used pipe-in-pipe technology to address the issue of a potential oil spill. The company also has access to oil spill response equipment and has conducted oil spill response drills.
Moles, who previously worked in the Gulf of Mexico before heading up the Nikaitchuq project in Alaska, said Alaska's smaller community and issues surrounding oil and gas operations means oil and gas companies spend significant time meeting with state and local officials as well as community groups.
"I don't recall meeting with the governors of Louisiana and Texas when I was working in the Gulf," Moles said.
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