NEWS BULLETIN

July 12, 2011 --- Vol. 17, No. 62July 2011

Obama issues order for Alaska energy development group

President Obama today issued an executive order establishing an interagency working group for the coordination of energy development and permitting onshore and offshore Arctic Alaska. Led by the U.S. Department of the Interior and involving multiple federal agencies, the group will facilitate efficient decision making over permits and environmental reviews, the order says. The group will ensure the sharing and integrity of scientific information, environmental information and traditional knowledge among agencies. The group will also ensure the coordination of issues such as oil spill prevention and contingency planning, while also coordinating the development of any necessary support infrastructure in Alaska.

In recent years permitting issues such as the current impasse over development access to the northeastern part of the National Petroleum Reserve-Alaska and recurring appeals over Shell’s offshore air quality permits have seriously delayed exploration and development projects in Arctic Alaska.

“The administration’s decision to designate specific people at each agency to focus on the development of our Arctic resources represents a positive step forward in improving the federal permitting process for companies interested in investing in Alaska,” said Sen. Lisa Murkowski in response to the president’s order. “I will be watching this effort closely to ensure that it’s successful at closing what has been an endless loop of approvals, appeals and delays — delays caused by special interest groups opposed to improving our energy security and the jobs it would create.”

“For the past two years, I’ve called on the administration to have federal agencies work together in Alaska,” said Sen. Mark Begich. “The president recognized the problem in his weekly address at the end of March. I give him full marks for honoring his commitment and look forward to the group untying the procedural knots that have stalled development at CD-5 in the National Petroleum Reserve-Alaska and improving permit processing in the OCS.”

“I am pleased that the administration is seemingly taking Alaska resource development more seriously,” said Rep. Don Young. “Time will tell if this working group helps streamline and expedite the process, as I hope it will, or if it adds another level of bureaucracy and red tape. In the meantime, I commend the president for taking a positive step in the right direction.”

See story in July 17 issue, available online at 11 a.m., Friday, July 15 at www.PetroleumNews.com

Second well goes into production on Alaska’s reborn Osprey platform

Osprey’s revival continues.

Anchorage-based Cook Inlet Energy LLC, the operator of the offshore platform in Alaska’s Redoubt unit, has succeeded in bringing a second shut-in well back into production.

The RU-7 well is the second to be activated recently on the Osprey platform, which was in “lighthouse mode” when Cook Inlet Energy and parent company Miller Energy Resources Inc. of Tennessee acquired it out of bankruptcy in late 2009.

Using a light rig known as a hydraulic snubbing unit, Cook Inlet Energy performed a workover of RU-7 that included replacement of an electric submersible pump and wellbore optimization.

“The RU-7 well has demonstrated an initial production of 250 barrels of oil per day, which more than doubled the projected flow rate of 120 BOD,” Miller Energy said in a July 7 press release.

In June, Cook Inlet Energy brought the RU-1 well onstream at a rate of about 350 barrels per day.

The company has big plans for Osprey, the newest and southernmost of the offshore platforms in Cook Inlet. A $17.9 million rig is under construction in Houston for the platform, and Cook Inlet Energy hopes to have it installed and drilling by year’s end.

David Hall, the company’s chief executive, has told Petroleum News the first order of business is drilling four sidetracks off existing but damaged Osprey wells. Beyond this, Hall has identified 13 potential new wells from the platform.

Production from Osprey and the Redoubt unit, the heart of which is the Redoubt Shoal field, goes to the shore-based Kustatan production facility on the west side of Cook Inlet.

“I am pleased with the successful rework of the RU-1 and RU-7 wells and the restart of the Osprey platform and Kustatan production facility,” said Scott M. Boruff, Miller Energy chief executive.

Reactivating the two wells “is only scratching the surface of the enormous potential” of the Redoubt Shoal field, Boruff said.


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