Pioneer natural resources Alaska: North Slope independent finds success.

• Author: Orr, Vanessa
• Position: OIL & GAS

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As the first independent oil and gas operator on the North Slope, Pioneer Natural Resources has a lot on the line. According to Todd Abbott, president of Pioneer Natural Resources Alaska, recent successes at its Nuna No. 1 appraisal well and at a development well drilled into the Nuiqsut formation make a long-term stay in the state look promising. However, the lack of a cohesive oil and gas financial regime may make convincing the home office to continue investing in the state a tough sell, he says.

Still, the company, which employs approximately 200 direct and indirect workers in Alaska each year and more than 3,300 people worldwide, is moving forward in its efforts to find investment-worthy projects that will keep it on the Last Frontier as long as possible. "We like Alaska--we want to stay here," Abbott says. "My charge is to grow the asset, so as long as there are projects here that can compete for capital, we'll be here a long time."

Pioneer Natural Resources, based in Irving, Texas, first moved into the Alaska oil and gas market in 2002 as part of a broader corporate strategy, according to Abbott. "At the time, the Lower 48 was viewed as fairly mature, so many companies began looking for growth opportunities elsewhere," he explains. "Pioneer started exploring in West Africa, South Africa and Alaska, looking for new places to grow. Alaska had a prolific oil and gas basin, accessible acreage, and at the time, the ELF (economic limit factor) fiscal system, which worked well for us."

During its first five years in the state, Pioneer drilled 11 exploration wells, which resulted in the commercial discovery Oooguruk. The company's primary project, the Oooguruk unit encompasses roughly 51,000 acres. The site is home to Pioneer's offshore drilling site and an onshore tie-in pad where the company brings in crude oil from a six-acre gravel island in the Beaufort Sea. Pioneer has a 70 percent working interest as owner and operator at Oooguruk; Eni Petroleum is 30 percent co-owner.

"We spend 99.9 percent of our time at Oooguruk, where we just produced our 10 millionth barrel of oil," Abbott says. "It's quite a milestone; it took a lot of hard work to get that oil and it's a project that we're very proud of. Our guys have done a fantastic job: it's a difficult place to work and a difficult industry to be in, and I don't get to say it often enough in a public forum, but we are extremely proud of the work being done."

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