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Vol. 15, No. 27 Week of July 04, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Alaska regs up to par?

In wake of Gulf well disaster, AOGCC moves to review blowout safeguards

Wesley Loy

For Petroleum News

Reacting to the Deepwater Horizon disaster in the Gulf of Mexico, oil industry regulators in Alaska are launching a “thorough review” of state regulations on blowout prevention equipment and other aspects of well safety.

Among the study topics is whether the state should require companies to drill a relief well concurrently with an offshore or ultra-extended reach well. That idea already has at least one Cook Inlet explorer worried.

The Alaska Oil and Gas Conservation Commission on June 24 issued a “notice of inquiry” inviting written comments on whether changes or additions are needed to regulations governing well drilling, control and workovers.

The notice lists 14 points the commission “will examine, without limitation.”

“The Commission will conduct a thorough review of all AOGCC regulations applicable to offshore and ultra-extended reach drilling operations to assure the use of safeguards sufficient to prevent losses of well control or to facilitate immediate reestablishment of well control,” the notice says.

The notice adds that the commission will hold a public hearing once President Obama’s National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling delivers its report on the causes of the Gulf disaster.

“At this hearing, public testimony will be received and the Commission will examine relevant issues in light of the findings and conclusions of the National Commission,” the AOGCC notice says.

Fran Ulmer, a former Alaska lieutenant governor, is a member of the National Commission.

‘Just being prudent’

The April 20 explosion aboard the Deepwater Horizon, a Transocean semisubmersible rig drilling an exploration well for BP about 41 miles offshore Louisiana, has shaken the nation’s oil and gas industry.

The catastrophe, which killed 11 rig workers and unleashed a continuing oil spill, has raised questions not only about BP’s decision making but also the well’s blowout preventer, cementing operations, casing choices and other technical issues. That the rig was working in approximately 5,000 feet of water is a major consideration for investigators.

BP is drilling two relief wells to try to stop the leak.

Dan Seamount, a geologist and chairman of the three-member AOGCC, told Petroleum News his agency is conducting the inquiry into Alaska regulations because “it’s just being prudent.” He credited fellow commissioner John Norman with suggesting the inquiry.

It’s not that the commission believes current regulations are faulty, Seamount said.

“I think we’re covered right now,” he said.

But the AOGCC wants to make sure Alaska regulations are free of loopholes or gaps in light of whatever the Deepwater Horizon panel finds, Seamount said.

Alaska regulations currently call for tests of blowout preventers every seven days or so, and a failed test can halt operations, he noted.

The inquiry will look broadly at whether state regulations are adequate for offshore and ultra-extended reach wells in regions under the commission’s jurisdiction, the AOGCC notice indicates.

“Everything is on the table,” Seamount said.

On Alaska’s North Slope, BP is planning to drill ultra-extended reach wells from land to its Liberty field beneath the Beaufort Sea.

Points of inquiry

The AOGCC is inviting written comments on more than a dozen points of inquiry. As taken from the public notice, these points include:

• The commission’s currently prescribed drilling fluid systems and programs as a mechanism for providing primary well control, including requirements for degassing of drilling mud.

• The commission’s currently prescribed blowout prevention equipment and diverter requirements as a mechanism for providing fail-safe secondary well control for well drilling and completion.

• The commission’s requirements for configuration of blowout prevention equipment.

• Whether regulations should be adopted to require third-party certifications of blowout prevention equipment.

• The commission’s current requirements regarding methods, frequency and reporting of testing of blowout prevention equipment used in offshore and ultra-extended reach drilling operations.

• Whether the current frequency of inspections and test witnessing by the commission is sufficient to identify improperly functioning blowout prevention equipment.

• The commission’s practices for probationary follow-up inspections of blowout prevention equipment failing a test.

• Commission regulations governing casing and cementing programs including whether there’s need for a new regulation on performance of cement bond tests; whether there’s need for a new regulation prescribing procedures for use of centralizers; and whether there’s need for a new regulation on use of lock-down sleeves.

• The criteria the commission should consider in determining requirements for blowout preventer size and pressure containment capability.

• Casing requirements for offshore and ultra-extended reach drilling, including use of single casing strings versus tie-backs.

• Whether the commission should require operators drilling offshore or ultra-extended reach wells to demonstrate the ready capability to drill a relief well if necessary.

• Whether the commission should consider requiring concurrent relief well drilling in offshore and ultra-extended reach drilling operations.

• The regulatory requirements of other jurisdictions, domestic or foreign, governing the drilling of offshore and ultra-extended reach wells.

• Any other matters related to blowout prevention and well control.

‘Kiss of death’

An executive with one company looking to mount an offshore drilling program in Cook Inlet said requiring companies to drill a relief well together with an exploratory well is worrisome.

“We’ve had a hard enough time getting one jack-up rig up there, much less two,” said Mark Landt, speaking June 29 from Houston with Petroleum News.

Landt is vice president of land and business development for Buccaneer Alaska LLC, a subsidiary of Buccaneer Energy Ltd., a publicly traded oil and gas independent based in Sydney, Australia.

Having to employ two rigs obviously would add huge cost to a drilling campaign, and likely would “put the kiss of death” on a project in Cook Inlet, Landt said.

Buccaneer plans to submit comments to the AOGCC emphasizing the big difference between the deepwater Gulf of Mexico and Cook Inlet, where companies long have operated in only about 100 feet of water, he said.

“We think the AOGCC has got a firm set of rules,” Landt said. “Any rig we bring up there will have to pass muster.”

Buccaneer hopes to drill on its two Cook Inlet oil and gas prospects, and has narrowed its search for a jack-up to three rigs, he said.

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