Obtainable success: independents increase activity on the slope.

• Author: Liles, Patricia
• Position: OIL & GAS

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Pioneer Natural Resources and Eni, partners in the Oooguruk oil field, broke ground in June with their first crude oil production from the independent-operated reserve located in shallow water just five miles offshore Alaska's North Slope.

Pioneer, a 70 percent owner of Oooguruk and the North Slope's first independent producer, led the abbreviated five-year development process, beginning with the first discovery wells in 2003 and concluding with construction completion and the beginning of oil production in June 2008.

"For an independent company to actually successfully jump all hurdles to complete a project is an indication that smaller companies can indeed be successful on the Slope," said Tadd Owens, director of government and public affairs for Pioneer Alaska. "It sends a positive message about Alaska and gives other companies a higher sense of confidence that, under the right set of circumstances, they are able to do the same thing."

Significant in its groundbreaking role of an independently operated producing field, Oooguruk illustrates the hope that Alaska's oil and gas industry holds for future increased independent activity on the North Slope.

"The basin has reached a level of maturity now that some of these smaller prospects on the Slope are going to attract independents," said Paul Laird, general manager of the Alaska Support Industry Alliance. "The more players there are in the market, the better it is for our members, because there are more opportunities for employment and business."

Larger exploration and production companies have "huge operations they need to support," Laird said. "Sometimes a smaller, more nimble company is going to be able to explore for and develop prospects more efficiently than the giant companies."

Alaska's major producers are publicly welcoming the increased activity by independents, and have worked behind the scenes to forge financial agreements to work cooperatively. In a February 2008 news release announcing the completion of a production processing and services agreement for Oooguruk, another Slope-wide first for the project, the top Alaska managers of BP and ConocoPhillips both made supportive comments about the new North Slope operating field and producer.

"This is the first third-party facilitysharing agreement in North Slope history and represents a major milestone for new producers following the footsteps of Pioneer," said Jim Bowles, President of ConocoPhillips Alaska. "It really shows a spirit of cooperation and collaboration in which North Slope producers are working to help stem the decline of oil production."

In the same release, BP Alaska's president Doug Suttles said, "We...