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Pioneer completes Oooguruk evaluation Finds issues, misunderstandings, events it can’t substantiate; reports what it’s found to federal, state agencies in 37-page letter Kristen Nelson Petroleum News
Pioneer Natural Resources has completed an internal investigation of its Oooguruk field on Alaska’s North Slope triggered by allegations originally received by the BP Ombudsman and later by Pioneer directly that operations at the field were not in compliance with state and federal regulations.
While the scorecard is not perfect, an attorney for Pioneer Natural Resources said allegations about its operations at Oooguruk on the North Slope include misunderstandings of work at the site and some allegations which cannot be substantiated.
An allegation that the company illegally used a glycol-water mix for enhanced oil recovery at Oooguruk turned out to be correct. Jeffrey Leppo, an attorney with Stoel Rives LLP in Seattle, said in a 37-page May 24 letter to state and federal regulators (the U.S. Environmental Protection Agency, the Alaska Department of Environmental Conservation and the Alaska Oil and Gas Conservation Commission), that the company determined that employees followed procedures used at the Prudhoe Bay and Kuparuk River fields in using a glycol-water mix for EOR. While the Alaska Oil and Gas Conservation Commission had approved use of the glycol-water mix for EOR at Prudhoe and Kuparuk, it had not approved it for use at Oooguruk.
Leppo said Pioneer reported the use of the glycol-water mix at Oooguruk to the AOGCC in April after the company confirmed the occurrence through its investigation; it has since obtained amendments to its injection orders allowing the use of the glycol-water mix, he said.
Internal investigation Pioneer began an internal investigation after it received a statement of concerns from the BP Ombudsman.
The company assembled an investigation team from facilities outside of Alaska and spent more than 1,000 hours initially visiting and understanding the Oooguruk facilities and interviewing personnel at Oooguruk and in Anchorage, Leppo said.
Mike Kelley, a Pioneer employee from March 2009 to March 2010, made the complaints, first anonymously and then in his own name.
In an initial letter of March 12 the company said it could not substantiate allegations made against it.
The company has since been working through allegations in additional information it received from Kelley, including interviews and correspondence, in particular a 140-page document it received from Kelley March 8 entitled “Alaska’s Deadliest Sin.”
Leppo said Kelley contacted Pioneer in response to the March 12 letter, with which he disagreed, and provided additional details and documentation.
Issues raised by Kelley fall into five categories, Leppo said in the letter to regulators, including the injection of glycol into EOR wells.
Some misinterpretation A second category of concerns “relate to actual events, although the facts have been misinterpreted or misunderstood in a manner that suggest lawful and proper events were conducted in an unlawful or improper manner,” Leppo said.
Another category of incidents were responded to and reported where appropriate.
These incidents include accidents and spills reported to the company’s health, safety and environment department and logged by the company, Leppo said, and spills of a quantity requiring reporting to agencies are so reported.
“Pioneer’s investigation did not detect lax procedures, lapses in training, indifference to regulatory requirements or failure to report spills,” he said.
Where spills alleged in the Kelley document were confirmed to have occurred, they had been logged and-or reported.
Leppo said an example of an event that was reported occurred in June 2009 when sea ice was forced up the side of the Oooguruk drill site and pushed “ice rubble onto a portion of the ODS working surface.”
Stored materials, such as bags of drilling mud ingredients, were buried and damaged.
“Pioneer fully inventoried and reported spills of these solids, and all but approximately one pound of the affected material was recovered. No fluids were spilled,” Leppo said.
Pioneer also met with the Alaska Department of Environmental Conservation after the incident to discuss how it was handled and steps being taken to address future potential similar occurrences.
Some concerns weren’t substantiated Pioneer’s investigation was unable to substantiate some concerns, such as Kelley’s assertion that he saw caribou licking spilled drilling salts at Oooguruk and inferred “the caribou hemorrhaged and died from toxic effects.”
Leppo said Kelley did not report a drilling salt spill or any observations of caribou at the time “and there are no other witnesses, reported observations or corroborating evidence of this occurrence.” Leppo said drilling salt products used by Pioneer at Oooguruk “do not contain toxic additives.”
Much of the Kelly document “consists of views and comments critical of applicable regulatory requirements and practices with which the author disagrees,” such as arguments for a moratorium on nearshore oil and gas development in Alaska, critical views of the Alaska Oil and Gas Conservation Commission and criticisms of methods used by the State of Alaska to meter oil for royalty determination.
On those issues, Leppo said “Pioneer respects the author’s right to responsibly express himself, however, the company disagrees with the underlying assumptions and the expressed opinions.”
Responsive changes Leppo said that in the process of its thorough investigation of operations, “Pioneer has identified areas where improvements can be made in Oooguruk procedures, facilities, training and personnel,” and several of the changes are directly responsive to concerns expressed by Kelley.
Among those issues, the glycol-water mixture used for EOR was addressed with AOGCC.
Concerning the nonhazardous waste and hydrocarbon cycling issues addressed in Pioneer’s March 12 letter, Leppo said the company found nonhazardous wastes were properly identified and manifested for disposal and recycling and personnel properly trained. However, with a flexible system the company is dependent on operator judgment, and is instituting changes to its facilities and procedures to isolate certain nonhazardous waste and recyclable material streams “with greater certainty.”
Pioneer will inspect the tundra adjacent to its onshore facilities for problem areas, another concern Kelley had — something that could not be done earlier because of Arctic conditions — and assess whether there are problem areas and take remedial steps where appropriate.
Leppo said that some of Kelley’s “frustrations concern issues that he raised with operations supervisors, and which were properly and responsively addressed,” but Kelley was not advised whether or how his concerns were being addressed.
“Operations management are now being trained and encouraged to provide feedback to personnel and to contractors regarding how concerns are handled in order to avoid any misperception that such concerns are being ignored or mishandled.”
AOGCC Kelley was critical of how the Alaska Oil and Gas Conservation Commission conducts its business.
Commissioner Cathy Foerster told Petroleum News in late March that the commission was beginning its own investigation based on Kelley’s allegations, but that because the allegations included not only matters under the commission’s purview, but how the commission conducted its business, it was going to investigate itself through an independent investigator.
The state put out a request for proposals.
Foerster told Petroleum News June 1 that the contract was awarded May 1 to Hawk Consultants of Anchorage.
She said so far Hawk has gone through the lengthy document and identified the allegations, dividing them into those involving AOGCC and those involving others. The AOGCC issues have been put in categories and Hawk Consultants will be interviewing Kelley, AOGCC staff and Pioneer employees in putting together a report.
Foerster said the process is lengthy, but she hopes to see a report from Hawk by the end of summer.
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