NEWS BULLETIN

January 11, 2013 --- Vol. 19, No. 6January 2013

‘Sour gas’ forces Exxon to modify well array at Point Thomson

ExxonMobil is making a significant change to its planned Point Thomson project due to an unexpected “sour gas” problem involving the two wells already drilled at the remote Alaska North Slope field.

In 2010, the company finished drilling two wells on Point Thomson’s central pad, the PTU-15 and the PTU-16. One well was to be a producer and the other an injector for the natural gas condensate project.

But during well testing, ExxonMobil encountered higher levels of hydrogen sulfide than expected.

Hydrogen sulfide, or H2S, is a sour or acidic gas that can be very damaging.

The PTU-15 and PTU-16 well materials were not designed for “sour service” and will need casing mitigation, ExxonMobil has told state oil and gas industry regulators.

Ultimately, both wells will be used as injectors, and a third well will be drilled as the initial Point Thomson producer, the company said.

—Wesley Loy

See story in Jan. 13 issue, available online at 11 a.m. on Friday, Jan. 11, at www.PetroleumNews.com

EPA issues notices of violation for Shell air permits

The Environmental Protection Agency has issued notices of violation for the air quality permits for the Noble Discoverer and the Kulluk, the drilling vessels that Shell was using in the Chukchi and Beaufort seas in the summer of 2012, the agency said yesterday.

“Based on EPA's inspection of the Discoverer, and Shell’s self-reports of excess nitrogen oxides (NOx) emissions for the Discoverer and the Kulluk, EPA determined that Shell had multiple permit violations for each ship during the 2012 drilling season,” EPA said.

Having issued the notices of violation, the next steps in the regulatory process can include a consent decree for penalties, orders to correct the violations and possible mitigation measures, EPA said. A consent decree, which apparently is subject to public notice and comment, would presumably involve a voluntary agreement between Shell and EPA on how to resolve a violation.

Shell spokesman Curtis Smith told Petroleum News in a Jan.10 email that Shell has made every effort to meet the permit conditions for the company’s Arctic operations and that the company continues to work with EPA to establish conditions that can be realistically achieved.

“We are working with the EPA on the path forward for 2013, as we have already proposed necessary permit revisions as a result of ongoing conversations with the agency,” Smith said. “We remain committed to minimizing the environmental footprint of our Arctic offshore operations”

EPA also said that it has terminated the compliance order that it had granted in September for the Noble Discoverer, to allow the drillship to operate in 2012 after Shell had notified the agency that the drillship was unable to fully comply with its air quality permit. The agency says that a revised permit should be available for public comment in early 2013.

The issuance of notices of violation does not preclude Shell from applying for air permits in the future, EPA said.

—Alan Bailey


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