NEWS BULLETIN

February 14, 2002 --- Vol. 8, No. 19February 2002

AOGCC considering enforcement action against BP for test failures

The Alaska Oil and Gas Conservation Commission has completed a review of safety valve system performance in the western operating area of Prudhoe Bay and is considering enforcement action against field operator BP Exploration (Alaska) Inc.

The commission said in a Feb. 14 letter to BP that the enforcement action the commission is considering would require BP to implement a specific safety valve system management system "that more effectively ensures compliance with AOGCC Order and Regulations."

The management system would include: how BP will monitor operability and reliability of safety valve system performance; who will be responsible for determining appropriate remedial action to prevent failures or correct failures; how performance reporting will be accomplished; and detailed procedures for analyzing and implementing corrective action.

The commission requires that components of the safety valve system be operational; if components cannot be repaired within 24 hours the well is shut in until repairs are completed and successfully re-tested.

The commission initiated its review following observations on safety valve system failures on six pads in the western operating area during the first quarter of 2001.

The commission said the safety valve system is "one part of a larger set of systems designed to prevent uncontrolled release of produced fluids (hydrocarbons and water)." The commission said the safety valve system is "not generally required for onshore wells by the majority of oil producing jurisdictions." Performance tests are designed to simulate catastrophic flow line ruptures and the commission requires wells to be tested by pad every six months.

The commission said BP has reviewed the safety valve system failure rates "and concluded that there was insufficient internal communication concerning the objectives, practices and results of SVS testing. They also acknowledged that there was inadequate attention to frozen pilots and a lack of analysis of test failure data."

The commission said "it is not clear that the failures on these WOA pads were solely the result of poor communication within BPXA." The commission said that it recognizes that mechanical failures occur, but "maintenance is required to keep the SVS in working condition. The majority of problems that cause component failures are avoidable. The frequency and type of maintenance are the keys to consistent successful SVS performance."

The commission said there are no benchmarks or performance measures available from other oil producing jurisdictions because most to not require the installation of safety valve systems on onshore wells.

The commission said BP has made recommendations and developed proposals to address some of the commission's concerns, but it would like the opportunity to evaluate all aspects of BP's proposed safety valve system management system before proceeding with an enforcement action, and is requesting complete details of the proposed system.


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