USA: Eni gets approval for Arctic well

Italian oil company Eni has received an approval of Arctic exploration operations on the U.S. Outer Continental Shelf, the first one to be awarded in more than two years.

The U.S. Bureau of Safety and Environmental Enforcement (BSEE) approved an application for permit to drill on Tuesday.

The U.S. Bureau of Ocean Energy Management (BOEM) conditionally approved Eni’s Beaufort Sea exploration plan (EP) in mid-July and Eni submitted the drilling permit application to the BSEE in August. Drilling the exploratory well from a man-made artificial island in the Beaufort Sea is expected to start as early as this December, the BSEE said on Tuesday.

The bureau’s approval allows Eni to move forward with new exploration in federal waters, but only after a thorough review by BSEE Alaska Region personnel to ensure the request met appropriate technical adequacy, safety and environmental sustainability standards, the bureau explained.

“BSEE Alaska Region staff conducted a thorough and complete review of Eni’s well design, testing procedures and safety protocol,” said Mark Fesmire, BSEE Alaska Region director. “Exploration must be conducted safely, and responsibly in relation to the Arctic environment and we will continue to engage Eni as they move forward with drilling its exploratory well.”

New well to add over 100 jobs 

According to Eni, new exploratory well operations will add an additional 100-110 jobs during the drilling of the well, and any potential plan of development is dependent on the results of Eni’s proposed exploration wells. At a minimum, new development could lead to the creation of 100-150 jobs in the region and new production of 20,000 barrels of oil per day.

Eni’s exploratory drilling will take place on Spy Island, a man-made artificial island approximately three miles offshore of Oliktok Point, in State of Alaska waters. Both the island and Oliktok point are already home to Eni production facilities comprising 18 producing wells, 13 injector wells and one disposal well. Eni is now proposing to use extended-reach drilling techniques to drill into federal submerged lands.

The extended reach drilling will target a formation in the newly formed Harrison Bay Block 6423 unit, a 13-lease unit on the OCS that BSEE approved in December 2016. Eni will explore the Harrison Bay Block 6423 Unit in partnership with Shell and plans to drill two explorations wells plus two potential sidetracks over the next two years.

Pre-drill inspections

Prior to the start of drilling operations, BSEE Alaska Region engineers and inspectors will conduct required pre-drill inspections at the Spy Island location. As part of the inspections, BSEE engineers and inspectors witness equipment tests, and verify that all operations are being conducted in accordance with approved plans and permits.

BSEE Alaska Region personnel, in coordination with State of Alaska, currently oversee oil production at Northstar Island in the Beaufort Sea, producing approximately 10,000 barrels of oil per day. A second project in the Beaufort Sea, known as Liberty, is currently open to public comment with the Bureau of Ocean and Energy Management. If permitted, Liberty would be the first completely federal OCS production facility in the Alaska Region.