ENDICOTT DEVELOPMENT-MAKING THE ARCTIC

OFFSHORE ECONOMICAL
M. I. Curtis, Vice President, Engineering & Special Projects, Standard Alaska Production
Company, U.S.A., 900 East Benson, Anchorage, Alaska 99519, U S A ; and D. B. Huxley,
Development Planning Manager, Standard Alaska Production Company, USA.

Abstract. Construction is underway on the development of Endicott, the first offshore oilfield in the Arctic.
Discovered in 1978 in shallow water in the Beaufort Sea about 15 miles northeast of Prudhoe Bay, the field
holds about 350 million barrels of recoverable liquids. Operated by Standard Alaska Production Company, the
field is expected to start u p by the end of 1987 and reach a peak production of 100000 barrels per day
(16 O00 m3/d) by early 1988. On the basis of initial studies, Endicott appeared uneconomical due to the high
cost of offshore arctic development. Subsequently, the project was rescoped and approached as a ‘no frills’
second generation arctic design. Through various scope changes, design-optimization studies and improved
well drilling techniques, the total cost of the project was reduced from the $3.8 billion conceptual estimate to
less than $2.0 billion. Concurrent with the design efforts, three years of intensive environmental study and
coordination with Federal, State, and local agencies were required to obtain the needed development permits.
This was followed by a decision of the owner companies in February, 1985 to proceed with full field development.
This paper traces the Endicott from its discovery in 1978 through a ten-year evolution to planned start-up at
the end of 1987.

Résumé. Le développement du gisement d’Endicott, premier champ pétrolier marin de l’Arctique, est en chantier.
Découvert en 1978 sous les eaux peu profondes de la mer d e Beaufort, à 25 kilomètres environ au nord-est de
la Prudhoe Bay, ce gisement contient environ 50 millions de tonnes de pétrole récupérables. Exploité par
Standard Alaska Production Company, il devrait commencer à produire en fin 1987 pour atteindre en début
1988 une production de pointe d e 5 Mt/an. D’après les premières études effectuées, Endicott semblait non-
rentable en raison du coût élevé de l’exploitation de l’Arctique marin. Ultérieurement, les objectifs ont été
redéfinis dans l’optique ‘sans fioritures’ d’une conception arctique de la seconde génération.
A la suite de divers changements d’objectifs, d’études d’optimisation de la conception et d’améliorations des
techniques de forage, le coût total d u projet s’est trouvé ramené, des 3,8 milliards de dollars estimé initialement,
à moins de deux milliards de dollars. En parallèle avec les études de conception, trois années d’études intensives
du milieu et une coordination avec les agences fédérales, l’administration de 1’Etat d’Alaska, et les autorités
locales ont été nécessaires pour obtenir les permis d’exploitation. Ceci fut suivi par la décision prise par les
sociétés exploitantes, en février 1985, d’entreprendre l’exploitation à fond du gisement.
La communication retrace l’évolution d u gisement d’Endicott depuis sa découverte en 1978 jusqu’au début
de sa mise en production prévue dix ans plus tard pour la fin de 1987.

1. INTRODUCTION 2. ENDICOlT RESERVOIR

The Endicott Field is located about 4 km offshore
from the Sagavanirktok River delta in the Beaufort
Sea about 24 km northeast of the Prudhoe Bay oilfield
(Fig. 1). The water depth in the project area ranges
from about 1.2 to 3.7 m. The field is located within
the Duck Island Unit of which Standard Alaska Pro-
duction Company is the operator with a 57% equity
share. The other Endicott owners include: Exxon
Corporation; Amoco Production Company; Union
Oil Company of California; ARCO Alaska, Inc.;
Cook Inlet Region, Inc.; NANA Regional Corpor-
ation, Inc.; and Doyon, Limited.
The Endicott Field discovery well, Sag Delta #4,
was completed by Standard in early 1978. The reser-
voir was delineated by 6 additional exploratory wells
drilled by Standard and Exxon through the first quar-
ter of 1982 (Fig. 2). The oil was found in the Kekiktuk
formation, the lowermost portion of the Endicott
group, of Mississippian age. The oil pool is overlain
by a gas cap with the gas-oil contact at a depth of
about 3004 m; the oil water contact is at about 3107 m.
The structure is a southwesterly plunging antiform,
bounded to the north/northeast and southjsouthwest
by major faults.

61
62 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT Pl1
of offshore Arctic development and the relatively
small size (compared to Prudhoe Bay and Kuparuk)
13 KUPARUK
MILNE
POINT
Beaufort Sea

1BURNE
<\ ,ENDICOTT
NATIONAL
PETROLEUM
RESERVE
ALASKA
<;
)/ , , NORTH SLOPE ';
/ '
Fig. 1. Alaska North Slope Fields.
I
Fig. 2. Endicott Reservoir.
The areal extent of the reservoir is about 3480 ha.
It is estimated that the field contains about one billion
barrels (159 million m') of 23" gravity oil in place, of
which 350 million barrels (56 million m') are recover-
able. In addition there are an estimated 800 billion
standard cubic feet (23 billion m') of recoverable gas
although there are n o current plans to develop this
resource due to the lack of a sales outlet and the need
to reinject the gas into the reservoir for pressure
maintenance. Field oil offtake will be 100 O00 barrels
per day (16 O00 m3/d) at start-up with a plateau of
about four years. Based on a nominal 80 acre (32 ha)
field wide well spacing, a total of about 100 develop-
ment wells will be required to exploit the resource.
3. CONCEPTUAL STUDIES
From early studies, the Endicott Field appeared to
be a submarginal prospect because of the high cost
of the resource. In late 1981 the owners set up a joint
study programme with the support of an engineering
contractor to look at alternative development con-
cepts. This study programme was done at a time when
delineation drilling and reservoir definition were still
NATIONAL
underway. Therefore, rather than attempting to final-
WILDLIFE
REFUGE
ize an optimum project design at a time when the
1 reservoir picture was still unfolding, the study focused
on the following:
(1) Evaluate the technical and cost feasibility of the
major project design alternatives.
(2) Establish a broad project scope that could
accommodate the maximum anticipated reservoir
requirements in terms of areal extent and well
density.
(3) Use a 'building block' cost estimating approach
that would allow for future rescoping and re-
estimating utilizing the components of the initial
study.
(4) Provide sufficient engineering definition to sup-
port filing of initial project permits.
The conceptual studies produced a development
scheme which included the construction of four gravel
islands: a central processing and drilling island; two
satellite drilling islands; and an island in water deep
enough to provide a reliable year-round source of
seawater forthe anticipated waterñood (Fig. 3). Three
alternative routes were considered for the sales oil
and gas pipelines. In the first case (West Dock
Marine) the pipelines were routed offshore on a sub-
marine approach to the existing Prudhoe Bay West
Dock; they were then routed overland to sales points
for oil (TAPS) and future gas (AGCF). The other
scenarios involved bringing the pipelines south to
shore, thence overland through the Sag Delta to sales
points. In one case (Delta-Marine) the pipeline sec-
tion to shore was submarine while in the other case
(Delta-Causeway) the pipeline was carried on a gravel
causeway connecting the Production Island to shore.
In all three cases the pipelines between the islands,
needed for transporting produced fluids, lift gas, and
injection water, were proposed to be subsea. The
on-island facilities were proposed to be housed in
modules of a size similar to those used at Prudhoe
Bay, or about 2000 tonnes maximum. Camps were to
be sited in the delta for housing personnel required
for construction (750 man) and operations (250 man).
It was estimated that to fully develop the reservoir
up to 240 wells might be required, providing nominal
40 acre (16 ha) well spacing.
 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT
Fig. 3. Early Endicott concepts.
The major issues resolved through conceptual
design included the selection o f
( 1 ) Centralized versus decentralized production pro-
cessing facilities.
(2) Conventional Prudhoe Bay type modules versus
barge-type facility packaging.
( 3 ) Onshore type drilling plan (wells closely spaced
in a row) versus a more compact offshore-type
drilling arrangement (template).
The estimate of total costs for the development
scheme produced during conceptual design was $3.8
billion. The key factors that influenced costs included:
a large number of wells (240) with a high average
cost ($5.7 million each); four islands; numerous
‘small’ modules with a large number of interconnects;
subsea pipelines between islands; and multi-train pro-
cess facilities. It was apparent that the initial develop-
ment scheme, although technically feasible, would
have to be reduced significantly in overall scope and
cost before field development could be justified.
63
4. PROJECT RESCOPING
A major rescoping of the project took place in late
1982 and early 1983 using the results of conceptual
engineering and recent delineation drilling. This effort
focused on resolving the major project scope issues:
(1) Number of Islands. Drilling results concluded
that the reservoir could be fully developed from
as few as one or two drill sites. Also, if a drilling
island was properly placed, it could provide a
reasonably secure source of ice-free seawater for
waterflooding. Therefore, the decision came
down to one versus two drilling/production
islands. The one-island case minimized gravel
and facility connections (no inter-island pipe-
lines) but had the highest drilling costs and tech-
nical risks (high step-out wells), provided the
least flexibility for reservoir development (chance
of putting the island in the wrong place), and
was assured of leaving some of the oil reserves
behind. The two-island case was selected.
 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT
Number of Wells. A review of additional well
data and new reservoir performance predictions
from computer simulation work concluded that
the field could probably be developed adequately
with 80 acre (32 ha) rather than 40 acre (16 ha)
well spacing. This reduced the required number
of wells to about 100 to 120.
Pipeline Route. The major decision on pipeline
route was: submarine (West Dock or Delta-
Marine) versus above ground (Delta Causeway).
Integral to this decision was a cost/benefit analy-
sis of the causeway, both from a standpoint of
carrying pipelines and providing year around
road access to the islands. Since the shallow
waters allowed for a ‘relatively’ inexpensive
causeway, the Delta-Causeway alternative was
selected. In addition to connecting the project to
shore, the causeway would also connect the
islands, thus eliminating the need for any subsea
pipelines.
Facility Sizing. An oil offtake of 100 O00 barrels
per day (16 O00 m3/d) was recognised as aggress-
ive for the Endicott reservoir size. However, well
tests indicated the reservoir had a high produc-
tivity potential and cost sensitivities showed ‘rela-
tively’ small savings with smaller processing
facilities in the range of 70000 barrels per day
(1 1 O00 m3/d).
5. PRELIMINARY DESIGN
A $50 million preliminary design effort was begun
in May 1983 with a design basis that was substantially
altered from the initial conceptual work (Fig. 4) and
included the following: two gravel islands; a gravel
causeway connecting the islands to each other and
2 ISLANDS AND CONNECTING CAUSEWAY
DELTA CAUSEWAY PIPELINE ROUTE
1 2 0 WELLS - 70 MPI. 5 0 SDI
CAMPS ON MAIN ISLAND
CONSTRUCTION 600 MAN
OPERATIONS 150 MAN
PROCESS FACILITIES
Oil Prod. 100 MBD
Gas - Inj. & Fuel 200 MMCFD
- Lift 200 MMCFD
Prod. Water 150 MBD
Source Water 140 MBD
Fig. 4. Endicott preliminary design basis.
Pl1
to shore; the Delta Causeway pipeline route; a
100 O00 BPD (16 O00 m3/d) production processing
facility; a waterflood intake system integral to the
Main Production Island; and space for up to a total
of 120 wells. More than 90 studies were conducted
during preliminary engineering (May 1983 to June
1984) in an effort to refine the project design and
further reduce overall project costs.
Borrowing a term from the budget world, pre-
liminary design was conducted with a ‘zero-base’
approach in establishing the facilities requirements.
This meant that we not merely rely upon past practice
for establishing design criteria, but that we examine
every piece of equipment, construction standard, and
design practice to ensure that each dollar invested
was essential to meet our performance goals. The
value of production ‘lost’ when the facility was down
was balanced against the cost of redundant equipment
to ensure a more reliable system. The focus was to
remove redundancy and sparing where they could
not be economically justified. Taking advantage of
experience at Prudhoe Bay and Kuparuk, we sought
to define a ‘second-generation’ arctic design
approach.
During preliminary design it was found that
module sizes greater than those used at Prudhoe were
cost effective at Endicott, where long module-trans-
portation distances over roads will not be required.
The largest Endicott module was proposed to have
base measurements of 29 by 59 m and weigh in excess
of 3600 tonnes. It was determined that much of the
non-rotating equipment could be installed outside,
rather than enclosed in modules as had often been
done at Prudhoe Bay. A single, rather than redundant,
oil-processing train was employed and three stages
of gas compression were set to run off a single turbine
driver. An existing exploration drilling island was
incorporated into the design as a breakwater and ice
protection feature for the seawater intake system on
the north side of the Main Production Island. The
sideslopes of the islands and causeway were designed
to withstand severe ice and wave action with the use
of concrete mats, gravel bags, or shallow slopes; such
systems were used individually or in combination,
depending on water depth and location. The final
selection of materials was based on an economic
trade-off of the higher initial cost of the more substan-
tial concrete mats versus higher maintenance costs
associated with the less durable alternatives.
In the drilling area, wells were designed on 3 m
surface spacing as compared to 34 m at Prudhoe Bay
for the purpose of conserving island space. This
selection required a careful analysis of perma-frost
Pl1 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT 65

L
Fig. 5. Current Endicott Development.

thawing, and of facility and casing designs to ensure through a pipeline from MPI along the causeway to
that the resultant island subsidence and well bore soil shore, and from there to Pump Station 1 of the Trans
movements could be accommodated. An innovative Alaska Pipeline System. The Main Production Island,
cantilever design for drilling rigs was proposed to 18 ha in area, will include: a 600-person Main
speed up rig moves between wells. This design allows Construction Camp; a 150-person Base Operations
the rig to be moved more easily across the tightly Center; production separation and dehydration
spaced wells and well flowlines that are planned. A equipment;' gas compression facilities; produced
reduction in well costs resulted not only from the water and seawater treatment and injection facilities;
reduction in total number of wells, but also from a and equipment for providing power and other utilities
reassessment of improved drilling efficiencies (Fig. 6). This island also provides space for up to 70
experienced at Prudhoe Bay, improved rig design,
optimization of drilling support facilities, and an
overall improvement in market conditions which
brought down the cost of tubulars, and drilling rig
and support service rates.
The development scheme that resulted from the
studies and preliminary engineering is shown as Fig.
5. Beginning on the east side of the Sag River, a 16 km
access road leads through the delta to the shoreline
and continues with 8 km of gravel causeway in the
Beaufort Sea. At each end of the T-shaped causeway
is a gravel island; the Main Production Island (MPI)
to the northwest and the Satellite Drilling Island
(SDI) to the southeast. Sales oil will be pumped Fig. 6 . Endicott main production island.
66 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT
wells. The Satellite Drilling Island, 4 ha in area, will
function as a drilling pad for up to 50 additional
wells. The causeway connecting MPI and SDI will
carry pipelines for the transport of produced fluids
to MPI, and lift gas and injection water to SDI.
Altogether, as a result of project rescoping, pre-
liminary design and the improved cost climate, overall
project costs were reduced to less than $2.0 billion
from the initial conceptual estimate of $3.8 billion
(Fig. 7).
COSTS, $ MILLIONS (MOD)
INITIAL DESIGN
CONCEPT ESTIMATE
FACILITIES 1620 940
PIPELINES 270 120
ISLANDS & CAUSEWAYS 300 290
WELLS 1610 6 2
TOTAL 3800 1970
Fig. I . Endicott cost reductions.
6. PERMITTING
While eff Orts were being made to reduce the
development costs for Endicott, world oil prices were
beginning to soften. Thus, while the owners believed
in mid-1984 that Endicott might be a viable project,
it could hardly be called robust. Two key questions
remained at that time which prevented a final decision
to proceed:
(1) Would we get the necessary environmental and
other permits from the various governmental
agencies and get them in a timely manner?
(2) How much would the stipulations attached to
these permits cost us?
There was a real possibility that unnecessarily
restrictive environmental mitigation measures might
be imposed that would push development costs above
an acceptable level.
The owners had concluded in early 1982 that the
magnitude of the Endicott Project, being the first
offshore arctic development and requiring up to 6 mil-
lion cubic metres of gravel, would require the prepar-
ation of an Environmental Impact Statement (EIS).
The collection of environmental baseline data had
already begun in the summer of 1981. These data,
along with a fish overwintering study in the winter
of 1981/82 and an extensive field monitoring program
in the summer of 1982, provided the basis for the EIS
analysis.
Conceptual engineering work during 1982 laid the
ground work for preparation of Engineering and
Environmental Overviews; these documents suppor-
ted the initial Corps of Engineers 404 permit applica-
tion filed in September 1982 by fully defining the
project scope alternatives and assessing the antici-
pated environmental impacts. The Corps permit filing
was the trigger for the preparation of the EIS which
began in late 1982 with the Corps as the lead agency.
The EIS process concluded in August, 1984 with
issuance of a 1,250 page final EIS document. The
process took approximately two years and cost several
million dollars, including the baseline monitoring
programmes. In the end, the EIS provided an exhaus-
tive analysis of the development alternatives and a
reasonable worst-case assessment of their potential
impacts; in so doing, it supported Standard’s conten-
tion that the proposed development scheme was
environmentally acceptable.
In all, 13 different regulatory agencies on three
levels of government were involved in the project
review and permitting effort. A total of 25 permits
was required before development could proceed. The
major Federal approval was received from the Army
Corp of Engineers for placement of gravel on wet-
lands. Approval by the State of Alaska was required
to ensure that the programme was consistent with the
Alaska Coastal Management programme. The Alaska
Department of Natural Resources also approved the
owners’ proposal for unitization of the oil field. The
North Slope Borough was the local agency that
approved the overall project Master Plan and
Rezoning.
Of the various environmental issues that arose
throughout the EIS/permitting process, the most
difficult and potentially most costly related to con-
struction of the offshore causeway; principally, the
3 km causeway section perpendicular to shore.
Although the EIS found that a subsea pipeline to the
West Dock was environmentally preferable to routing
the pipeline to shore via a gravel causeway, the owners
concluded that the cost of the subsea pipeline could
probably not be absorbed in a viable project. The
environmental objections to the causeway stemmed
from its potential impacts on anadromous fish. Since
these fish normally move parallel to the coastline, it
was feared that any obstruction to their movement
might adversely affect them as a result of the physical
presence of the causeway itself or of changes in the
local water temperature and salinity created by the
causeway.
The final EIS proposed that the causeway would
be environmentally acceptable if broken by breaches,
Pl1 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT
or open bridges, allowing passage of water and fish
across the causeway; however, the total length
required to avoid unacceptable impacts was the sub-
ject of long discussions among the various agencies
and with Standard. As a final arrangement, two
breaches, 200 feet (61 m) and 500 feet (152 m) long,
were agreed to be installed by Standard in the cause-
way section to shore.
Furthermore, Standard is required to conduct a
comprehensive long-term environmental monitoring
programme to assess the actual impacts of the project
on the fish and wildlife in the area; if these pro-
grammes show greater impacts than expected, further
mitigation measures may be required.
7 . DEVELOPMENT PROGRESS
Endicott construction got underway in March, 1985
when Standard began the largest single-season gravel
hauling operation ever to take place on the North
Slope. By October, 1985, more than 4.6 million cubic
metres of gravel had been placed in constructing the
islands, causeway, and onshore road. Lower-48
module assembly began in August, 1985 at New
Iberia, Louisiana. The causeway bridge sections were
sealifted to the North Slope during the summer of
1985 and installed during the first quarter of 1986.
The Main Construction Camp was trucked in small
modular sections to the North Slope, field-installed,
and placed in service by June, 1986. The Rase
Operations Center was transported in modular sec-
tions to the Slope partly via sealift from northern
Canada, and partly by truck from Anchorage; field
installation should be complete by year-end 1986. The
first facility modules, which included utility and life
support systems, were sealifted during 1986; com-
missioning of the utility module is scheduled to be
completed by November, 1986.
Drilling began in April, 1986 with one rig on each
island. Approximately 30 to 35 wells will be drilled
and completed by the start of production at year-end
1987.
The gravel placement and slope protection pro-
gramme was completed in August, 1986. In all,
Standard placed nearly 5 million cubic metres of
gravel and installed 24 thousand gravel bags and 27
thousand concrete blocks for sideslope protection on
the islands and causeway.
Pipeline construction is underway and will be com-
pleted by mid-1987. Fabrication of the remaining
facility modules (approximately 20 O00 tons) is
continuing in New Iberia; these units will be sealifted
during the summer of 1987. Installation and com-
67
missioning of essential field facilities are expected to
be completed and field production started by year-end
1987. By early 1988 Endicott should be producing at
a peak of 100 O00 barrels per day (16 O00 m'/d).
Since the initial commitment was made, costs to
develop Endicott have continued to come down. In
the facilities area, construction has proceeded
extremely well and the current economic climate has
resulted in material and labour costs being sig-
nificantly less than initially forecast. In the drilling
area, further reductions have been forecast based on
actual experience to date, more favourable market
conditions, and an expectation that no more than 100
wells will be required to develop the reservoir. In all,
total development costs are now estimated to be about
$1.3 billion, a reduction of nearly $700 million from
the design estimate prepared in June, 1984.
8. CONCLUSIONS
We are satisfied at present to have what we believe
is a solid oil field development programme that is
proceeding on schedule; however, getting to this point
has not been easy. The conditions for developing an
offshore oil field in the Arctic have demanded the
closest attention to reducing project costs, and finding
ways to get the job done with less than we might have
been able to afford in earlier projects. The ten years
required to bring Endicott from discovery to produc-
tion (Fig. 8) is staggering b y U.S. Lower-48 standards
Gravel Work Island Construction
Module Conslruclion íL48)
Fig. 8. Endicott programme schedule.
and has placed a heavy economic burden on the
project. The interests and responsibilities of many
regulatory agencies have played a major role in shap-
ing the course of our development programme. By
68 APPRAISAL OF ENGINEERING TECHNIQUES FOR ARCTIC FIELD DEVELOPMENT Pl 1
starting early and maintaining close coordination with can be economically developed only if engineering
the various agencies, we have been able to establish and planning are dedicated to achieving cost
an economically acceptable programme. We antici- effectiveness, and if reasonable tradeoffs are made
pate that other fields similar to Endicott will be dis- between environmental concerns and their cost and
covered. It is clear from our experience that these schedule implications.