US firm snatches up Eni’s two shallow water oil fields off Alaska’s North Slope coast

June 27, 2024, by Melisa Čavčić

Italy’s energy giant Eni has clinched a deal with the U.S.-based Hilcorp to sell two oil assets off the coast of Alaska, as part of its ongoing efforts to rebalance its upstream portfolio and divest non-strategic assets.

Oooguruk development, which represented the third offshore production facility to be constructed in the Alaskan Beaufort Sea, is partially protected from wave and ice attack by virtue of its location in the shallow waters of the Colville River Delta; Source: Coastal Frontiers

The binding agreement enables Hilcorp to acquire Eni’s 100% interests in the Nikaitchuq and Oooguruk fields in Alaska. While the amount the Italian player will get for the sale has not been disclosed, the firm did add that the value will be revealed upon the closing of the transaction, which is subject to appropriate regulatory approvals and other customary terms and conditions.

Eni, which had a 30% interest, got its hands on an additional 70% stake and operatorship of the Oooguruk oil field in 2019. Located in the Beaufort Sea approximately 5 kilometers off Alaska’s North Slope coast, the field has been in production since 2008.

At the time, the Italian oil major was already the operator, with 100% working interest, of the Nikaitchuq oil field, situated around 13 km northeast of Oooguruk. This field has been in production since 2011. The Oooguruk acquisition enabled the firm to boost its production in Alaska by approximately 7,000 bopd gross.

Currently, Eni is committed to delivering a net €8 billion of net portfolio inflow, front-end loaded, over the 2024-27 plan, with proceeds anticipated to come from three main sources. This encompasses high-grading the upstream portfolio, diluting down high equity ownership exploration discoveries, and accessing new pools of capital via the firm’s satellite strategy to support the growth of its transition businesses while confirming progress in value creation.

Italy’s energy heavyweight is working on multiple projects, including a new 2.4 million tonnes per year (mtpa) floating liquefied natural gas (FLNG) unit, which is expected to start working at the firm’s LNG project off the coast of Congo in the fourth quarter of 2025.

Eni kicked off production from the Baleine field Phase 1 at the end of August 2023, less than two years after the discovery in September 2021 and less than a year and a half after the final investment decision (FID) was made. The company is now working on Phase 2, which is due online by the end of 2024 to lift field production to 50,000 bbl/d of oil and about 70 mscf/d of associated gas.

The Italian energy giant’s joint venture with BP, Azule Energy, recently made its first international acquisition since its creation in 2022, entering Namibia’s prolific Orange Basin.