Proposed development of Niakuk oil field in shallow waters of the Beaufort Sea off Alaska has been revived under a new scheme by operator BP Exploration (Alaska) Inc.
The project originally was intended to start up in 1992 and produce 20,000 b/d of oil until it ran afoul of environmental permitting and economic concerns.
TROUBLED HISTORY
The Niakuk development proposal was shelved in 1990 after engineering studies led BP to increase its estimate for development costs to about $250 million from $130 million to accommodate a greater than expected gas handling and gas compression capability.
That would have increased the number of production modules to 35 from 15 for a field that was marginally economic to begin with under a low oil price regime.
Adding to project difficulties was the inability of BP and partners to win a permit from the U.S. Army Corps of Engineers to build a controversial 1.4 mile gravel causeway from shore to gain full access to the reservoir's estimated 58 million bbl of reserves.
And there were concerns over the prospect of sharing production facilities for the Lisburne oil reservoir of the Prudhoe Bay Unit with proposed development of nearby giant Point McIntyre oil field.
Niakuk is a lower Cretaceous Kuparuk River sands reservoir just west of Endicott field, the first commercial oil field in U.S. arctic waters.
NEW PLAN
With a new development approach, BP has resumed engineering work and pursuit of federal and state permits for the project.
BP now plans to develop the field with high angle wells from an onshore location at Heald Point northeast of Prudhoe Bay. Plans call for drilling as many as 20 wells-15-16 of them producers and the rest injectors-and perhaps additional wells intended to tap the Alapah pool, apparently an extension of Lisburne. Under the current proposal, as much as 50 million bbl of Niakuk reserves could be developed.
A BP official said the commingling/production sharing issues among partners in the three fields essentially has been resolved as well but didn't elaborate because final approvals are pending.
There is no solid timetable for the project at present, BP said, noting that permit documents calling for a mid-1993 construction timetable to meet a yearend 1994 start-up represents the "earliest possible" scenario.
The company needs the permits in hand before it can complete engineering work and commit to a final schedule.
There is no new cost estimate for the redesigned project, although the gravel causeway would have been a sizable cost component.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
