Oil Search moves into FEED phase for Pikka Unit development in Alaska
Oil Search Ltd. has received board approval to enter into the front-end engineering and design (FEED) phase for development of its Nanushuk oil discovery in the Pikka Unit licenses on the North Slope of Alaska west of Prudhoe Bay.
The company also reported an increase in the estimated 2C contingent oil resources in the Pikka Unit which now stand at 728 million bbl. This is 46% higher than the 2C figure of 500 million bbl estimated at the time of the acquisition of Oil Search’s interest in the region from the Armstrong Energy group in November 2017.
Pending joint venture approval and finalization of third-party agreements, FEED is expected to start early this year. The work entails finalization of detailed technical and engineered designs and the ordering of long-lead items such as pipeline and process facility equipment.
Oil Search said that the basis of design and assumption for FEED is to begin an early production system targeting up to 30,000 b/d of oil in 2022.
Work includes the start of drilling from one well-pad in 2021 along with construction of a three-phase pipeline tied into adjacent processing facilities that have ullage to support the early production. This work will provide a learning process and enable enhancements to be incorporated into the full field development drilling program.
Full field development, planned to come on stream in 2024, currently assumes drilling 106 wells (53 producer/injector pairs) from three well-pads enabling a production plateau of up to 135,000 b/d through a new Nanushuk central processing facility.
The infrastructure will also comprise an operations center with a 200-bed camp plus office, stand-by generation, warehouse, and maintenance facilities. In addition there will be about 40 km of roads, two bridges, and about 56 km of pipelines.
The Pikka Unit facilities will lie 84 km from Deadhorse, major supply base for the North Slope, and 11 km northeast of the community of Nuiqsut.
The increase in 2C contingent resources has been provided by Ryder Scott incorporating new reservoir models and regional data acquired by Oil Search during 2018 and 2019. Ryder Scott’s estimates for 1C and 3C contingent oil resources are 513 million bbl and 907 million bbl, respectively.
Oil Search said these figures are based on the current Pikka Unit development plan only and do not include several reservoirs within the Pikka Unit and field extensions outside the unit that could be drilled from existing planned well-pads, or other discovered resources that could be tied into the larger Pikka Unit development with additional investment. These resources are the subject of a separate independent assessment expected to be released this year.
As part of the development program Oil Search has signed a comprehensive Land Use Agreement with the Kuukpik Corp. to ensure the development program is carried out in a balanced and environmentally responsible manner that preserves subsistence living and also provides business development opportunities and other long-term benefits to the local communities.
Oil Search exercised its option to acquire additional working interests from Armstrong Energy group in 2018 and now holds 51% interest and operatorship in the Pikka Unit. Repsol E&P USA has the remaining 49%.