Arctic Directory: Escopeta jack-up rig sails for Cook Inlet

Petroleum News

A jack-up rig is headed for Alaska for the first time in more than a decade.

The M.V. Kang Sheng Kou heavy lift vessel left Freeport, Texas, at around 6:50 p.m. on Friday, March 18, carrying the Spartan 151 jack-up rig to Cook Inlet on behalf of operator Escopeta Oil. As of press time, the last known location of the ship was somewhere in the Gulf of Mexico, on its way to round the tip of South America. “Yup. We’re on our way,” company President Danny Davis told Petroleum News.

Escopeta plans to use the rig to explore Kitchen Lights, a large offshore unit in the upper Cook Inlet that combines four distinct prospects and is thought to hold both oil and gas.

The Division of Oil and Gas put Kitchen Lights in default last year because Escopeta missed work commitments deadlines and Escopeta appealed the ruling. The two sides reached a settlement that required Escopeta to have a rig bound for Alaska by March 31 and drill to a certain depth by Oct. 31. Escopeta expects the jack-up rig to arrive in Cook Inlet around May 8 and begin drilling shortly thereafter, once modifications and inspections are done.

Final inspections needed

Another outstanding issue is whether Escopeta will face delays related to the Jones Act, a federal law that requires ships moving between domestic ports to be built in the United States and manned by American crews. Because most of the available heavy lift vessels large enough to carry a jack-up rig are foreign-flagged ships, Escopeta got a Jones Act waiver in 2006, during an earlier attempt to bring a jack-up rig to Cook Inlet.

The U.S. Department of Homeland Security has not publicly said whether that waiver is still valid. If the waiver isn’t accepted, it is uncertain what impact — timing or financial — it would have on Escopeta’s program. U.S. Sen. Mark Begich, D-Alaska, recently petitioned the U.S. Department of Homeland Security to resolve some of those uncertainties.

A jack-up rig is a mobile offshore drilling unit that is well suited for relatively shallow waters, such as those in the upper Cook Inlet. Because companies have been unable to get a jack-up rig to Alaska since the 1990s, many choice prospects have gone undrilled.

Editors Note: The jack-up is under a two-year lease, with the option for an additional four years. Escopeta also has an option to purchase the rig, and intends to use it to drill both its own wells and those of other operators. Once the rig arrives and passes inspection, Escopeta plans to use it to explore Kitchen Lights, a large offshore unit in the upper Cook Inlet with four distinct prospects — Corsair, Northern Lights, East Kitchen and Kitchen. “We’ll drill our first well at Corsair,” Escopeta President Danny Davis told Petroleum News in February. “And then while we’re evaluating the results from our well, we’ll use it to drill another company’s well.”