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Vol. 15, No. 37 Week of September 12, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Chevron to plug, abandon Cook Inlet platform wells; prelude to possible removal

More and more, some oil and gas platforms in Alaska’s Cook Inlet seem destined for dismantlement.

The latest proof is Chevron’s plan to begin work in October to plug and abandon some 25 wells on its Baker platform, one of several aging platforms the company operates in the inlet.

In support of the project, the Alaska Oil and Gas Conservation Commission on Sept. 2 approved Chevron subsidiary Union Oil’s request for an increase in the volume of waste fluids, such as oily water and sludge, it can inject back underground for disposal.

Once the work is completed, all wells drilled from the Baker platform “should be plugged back proximate to the mud line in preparation for ultimate platform removal,” the AOGCC approval said.

Sixteen platforms punctuate Cook Inlet’s turbulent waters, most of them installed in the 1960s.

Speculation has been mounting as to when one or more platforms might be removed due to depletion of the oil and gas reservoirs beneath them.

Chevron recently laid out perhaps the clearest timetable yet for platform removal, advising the Alaska Division of Oil and Gas that the Baker platform as well as the neighboring Dillon platform could be pulled in 2019.

All played out

Chevron’s 10 Cook Inlet platforms include Anna, Baker, Bruce, Dillon, Dolly Varden, Granite Point, Grayling, King Salmon and Monopod. Monopod and Steelhead.

Baker was installed in 1965 on lease ADL 17595 in the North Middle Ground Shoal field, northwest of the community of Nikiski. Oil production commenced the following year, primarily from the sandstones in the Tyonek and Hemlock formations. Union Oil took over for Amoco as operator of the Baker platform in 1990. Ultimately 31.9 million barrels of oil and 15.9 billion cubic feet of natural gas were produced from the lease.

Today, the Baker platform is in “lighthouse mode.” Production was halted in 2003 as oil recovery dwindled to an average of 515 barrels per day. Union Oil told state officials that year the North Middle Ground Shoal field was depleted and had reached its economic limit.

Oil production was suspended the prior year from the Dillon platform to the south.

Chevron, in an Aug. 24 letter to the AOGCC, said it is “moving towards” plugging and abandoning the wells on both Baker and Dillon, with operations to start in October on the Baker platform.

It means bringing the mothballed platform back to life for purposes of conducting the abandonment operations.

Construction work already has been done to make Baker “capable of well intervention,” Chevron wrote in a “plan of abandonment” dated May 10 to the Division of Oil and Gas.

“The construction phase included rejuvenating the living quarters and galley, reinstating the fire control systems, and repairing both the basic electrical and mechanical infrastructure,” Chevron wrote.

The well decommissioning is expected to run through much of 2011, according to an estimated schedule Chevron provided the state.

Dillon well decommissioning is to begin in late 2011 and run through much of 2012.

Platform removal strategy

Chevron, in recent correspondence with regulators, suggests the hugely expensive matter of removing platforms likely won’t begin for quite a few years, with complex logistics expected.

“Permanent platform abandonment planning is premature at this time,” the company told the Division of Oil and Gas on Feb. 23. “Union’s current business plan is to coordinate the abandonment of Baker and Dillon platforms coincident with the abandonment of other platforms in the Cook Inlet the timing of which is unknown. Union envisions a large scale and coordinated abandonment effort among platform operators in the Cook Inlet once a sufficient number of platforms have reached their economic life.”

Chevron gave no timetable for removing the platforms in the Feb. 23 letter.

After the Division of Oil and Gas requested additional information, Chevron submitted the May 10 plan of abandonment that included the schedule estimating the Baker and Dillon removals for 2019.

Pulling out platforms will involve lining up the necessary offshore work equipment several years in advance, Chevron said.

“Great distances separating sufficient marine equipment and the specialized processes required for the Cook Inlet environment will necessitate the removal of multiple platforms each summer season,” the company wrote.

Chevron further seemed to hint that some chance exists for the platforms to remain in place in a different role.

“In addition to decommissioning, Union is also evaluating alternative use opportunities for a portion of, or all remaining infrastructure, after well abandonment,” Chevron wrote in its May 10 letter. “Alternative use could take several years to come into play which would coincide with a ‘well abandonment priority’ strategy. Meanwhile, facility structures will be maintained in accordance with Union’s integrity management program.”

Chevron hinted with slightly greater clarity in its Feb. 23 letter, saying “preliminary feasibility work has been conducted for using these facilities to generate alternative power.”

—Wesley Loy

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