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Pioneer finds no wrongdoing at Oooguruk Internal investigation finds nothing, second investigation under way, AOGCC looking into allegations against itself and Pioneer Eric Lidji For Petroleum News
After an internal investigation into its waste management activities, Pioneer Natural Resources has said it could not substantiate allegations made against the company.
“Based on the investigation conducted, Pioneer does not believe that Mr. Kelley’s allegations regarding waste management practices in general, regarding specific incidents, and regarding corporate culture are correct,” an attorney for Pioneer wrote to state and federal officials. “Pioneer did not detect, and does not suspect, violations of applicable law or regulation regarding the matters addressed by Mr. Kelley.”
“Mr. Kelley” refers to Mike Kelley, a now-former employee of Pioneer who made several complaints against the company, first anonymously and then in his own name.
At least one state agency is planning an independent investigation, but that effort is complicated somewhat by the broad nature of the allegations. Pioneer is also starting work on a second internal investigation to address additional allegations by Kelley.
The allegations mostly concern Pioneer’s Oooguruk unit, a nearshore project in the waters of Harrison Bay, north of Kuparuk, off the coast of the North Slope of Alaska.
Anonymous claims at first The allegations began with a confidential complaint to the BP ombudsman. While BP Exploration (Alaska) does not have any authority over Oooguruk, the ombudsman noted in a Feb. 18 letter to President John Minge “it is clear as a good corporate citizen that BPXA should forward the information to the appropriate federal and state authorities.”
BP sent the allegations to Pioneer, as well as to the U.S. Environmental Protection Agency, the Alaska Department of Environmental Conservation and the Alaska Oil and Gas Conservation Commission. Pioneer began an internal investigation in late February.
Those allegations primarily concern Pioneer’s management of waste at Oooguruk Island, the six-acre, man-made drilling site located six miles offshore, and known as the ODS.
One allegation claims Pioneer put waste generated at the ODS into the production stream as a form of “sham recycling.” The company said its investigation showed no sign of this.
In its final report, Pioneer said the allegations were “difficult if not impossible to comprehensively address,” and so instead the company looked at its operating procedures to see if waste management practices on the ground complied with guidelines.
“Pioneer’s investigation did not detect any regulatory non-compliance associated with the configuration or proscribed usage of these facilities and processes,” the report said.
Second investigation under way The report to the AOGCC is the result of that investigation, but not the end of the matter.
Pioneer said that on Feb. 22, an employee named Mike Kelley e-mailed the company about additional allegations concerning the pigging of a seawater injection line. It was ultimately revealed that Kelley also sent the initial allegations to the BP ombudsman.
Pioneer “does not believe that there is any merit” to the pigging allegation.
Kelley also complained about a corporate culture of “shoot the messenger.” Pioneer said Kelley “freely and frequently spoke out when he had concerns regarding operations procedures, safety issues and other matters, both while employed by Pioneer and since resigning,” adding “the problem was not with his ability or willingness to raise issues, but with his disappointment and disagreement with how his concerns were resolved.”
The company said Kelley “was employed by Pioneer in the position of Multi-Skilled Tech II from March 18, 2009, until his voluntary resignation on March 2, 2010,” and previously worked at Oooguruk as a contract employee of NANA Management Services.
On March 8, Kelly e-mailed Pioneer a 140-page document called “Alaska’s ‘Deadliest Sin,’” including thoughts about the Alaska oil industry, and Oooguruk in particular.
The document includes narrative, accusations and photographs claiming to prove oil industry malfeasance on the North Slope. Pioneer included the document in its report to the AOGCC, but in the copy obtained by Petroleum News, the relevant content of the reproduced black and white photographs are in many cases difficult to render.
Because of the timing, the recently completed internal investigation does not cover the allegations Kelley made in “Alaska’s ‘Deadliest Sin.’” The company attorney said Pioneer is “working diligently to investigate the new allegations,” but because of the length, added he is “hesitant to state when Pioneer will complete its investigation.”
AOGCC investigation underway The AOGCC is beginning its own investigation as a result of the allegations.
“Anytime something like that comes across our desk, we automatically trigger our own investigation,” Commissioner Cathy Foerster told Petroleum News on March 29.
The size and scope of the allegations create complications, though. Not only do its accusations fall under AOGCC jurisdiction, but they also point fingers at the AOGCC.
The AOGCC is therefore investigating itself through an independent investigator.
Foerster said the AOGCC asked state procurement officials to fast track the process, but noted “the wheels of state government move a little bit more slowly than industry,” and said there would probably not be a strict timeline put in place for the investigation. “Once he gets started we’re going to give him or her all the time he or she needs,” she said.
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