July 23, 2001 --- Vol. 7, No. 87July 2001

Marathon applies for unit at Ninilchik

Marathon Oil Co. has applied to the state Department of Natural Resources Division of Oil and Gas for approval to form the Ninilchik unit onshore and offshore the Kenai Peninsula between Clam Gulch and Ninilchik.

There are state, federal, Native, university and fee lands in the proposed 25,167 acre unit, including 19,419 acres of state oil and gas leases, most of which are owned Marathon 60 percent, Unocal 40 percent. Phillips also has acreage in the proposed unit.

Marathon would be the operator and Marathon and Unocal between them account for 85 percent of the working interest ownership in the proposed unit.

Most targets in the company's exploration plan are in the Tyonek formation; the Clam Gulch block well will also target the Sterling formation.

A work over is planned at the Socal Falls Creek 1 well in 2001 and Marathon's 1 Grassim Oskolkoff well will be production tested to identify gas potential this year. The 2 Grassim Oskolkoff will be drilled next year, and a work over will be done at the 1 Union Ninilchik well.

The Clam Gulch block will be drilled in 2004.

External corrosion causes flow line rupture at Prudhoe

The Alaska Department of Environmental Conservation said that BP Exploration (Alaska) Inc. detected a crude oil spill at drill site L2 in the eastern operating area at Prudhoe Bay the morning of July 21.

BP has estimated the spill at less than 10 barrels (420 gallons). DEC said July 23 it had not yet determined if the spill includes produced water.

The rupture in the flow line occurred over the tundra and the oil sprayed out of the flow line and was carried by the wind across the tundra, covering an estimated half an acre.

A 50 foot by 20 foot area was heavily contaminated and was surrounded by shore seal boom. The tundra is being treated with a warm water rinse to remove the oil and the oil and rinse water are being recovered with a vacuum truck.

Where the tundra was only lightly oil it will be treated with a weed burner to remove the oil and minimize plant damage. No surface water or wildlife were effected.

DEC said external corrosion caused the flow line to rupture. BP estimated that it would take 12 hours to repair the damage.

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