AOGCC has Prudhoe gas off-take report

Some data on Prudhoe Bay study will be available later in February; Point Thomson on hold; friendly audits under consideration

Kristen Nelson

Petroleum News

The primary technical efforts on the Prudhoe Bay gas off-take study have been completed, Alaska Oil and Gas Conservation Commissioner Cathy Foerster told Senate Resources Feb. 19.

The study is required, she said, because “Prudhoe Bay is an oil field and in an oil field you don’t typically get permission to produce the gas ‘til all the oil is gone.” Investors will want to know that the gas can be produced before they put money into a gas pipeline from the North Slope, she said, and it is the commission which will determine how much gas can be produced from the field without an adverse impact on oil production.

The commission has been working on a cooperative study with the Prudhoe Bay owners to help the commission determine what an acceptable gas off-take rate will be for a pipeline.

That study will be discussed at the commission’s Feb. 28 public meeting, Forester told the committee, but she also said that because the commission has a confidentiality agreement with the owners, “we will not be sharing anymore than they and we feel appropriate to share at this time.”

Because such a study involves forecasts, the commission may need to go back and do more studies she said, since forecasts need to be updated.

Point Thomson study on hold

Grilled by Sen. Bill Wielechowski, D-Anchorage, about why the Point Thomson study is on hold, Foerster said it costs a lot of money to have a consulting reservoir engineer look through the data and if a new operator should come in and gather new data that work would have to be done all over again.

Wielechowski said he didn’t understand why the state is waiting for Exxon, since they’re in default.

Forester said ExxonMobil owns the data and “they can choose whether or not to share and if they’re in default why would they share it with us?” If they no longer have the leases, she said, then the only thing they have of value is the data.

The commission negotiated an agreement with the Point Thomson unit owners for access to their confidential data so that the commission could determine the rate at which gas could be removed from the field without an unacceptable loss of liquid hydrocarbons. Point Thomson is neither an oil field nor a gas field, Forester said, but a retrograde condensate reservoir and if such a reservoir isn’t produced properly “you could lose liquid hydrocarbons in the reservoir.”

The Point Thomson owners had originally proposed producing condensate first and reinjecting the gas for a later sale, but recently opted for gas production at the field in conjunction with the proposed Alaska North Slope gas pipeline project.

Making the decision on an acceptable gas off-take rate will be complex Forester said, and “we recognize that we need a lot of information that nobody has but the owners and that we have to work a deal with them to get access to it.”

The data access deal had been struck and a meeting held on sharing the data when DNR came out with its ruling finding Exxon in default. Foerster said she offered to put the study on hold, knowing “they may not have the lease six months from now.”

Wielechowski said he was concerned about timeliness for an Alaska gas pipeline and Forester said she thought six months to let Exxon figure out if they want to continue with the study was appropriate. “We can’t just sit here for five years and wait for it to be resolved,” she said. “We’ll have to step in — give them a little time to breathe and then step back in and just see what we want to do.”

Friendly audit under discussion

AOGCC is bouncing around something similar, Forester said. Other agencies would be invited to participate, she said.