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Vol. 15, No. 15 Week of April 11, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Blow-out rules outdated

Imperial, BP, CAPP want same-season relief well requirement changed

Gary Park

For Petroleum News

The combined weight of Imperial Oil, BP and the Canadian Association of Petroleum Producers is being applied to seek changes to relief well policies for the Canadian Beaufort as the industry starts to eye prospects more distant from the shoreline.

In submissions to Canada’s National Energy Board, the three parties want an end to a 34-year-old policy requiring operators to, if necessary, be able to drill a relief well, kill an original well and safely suspend both wells during a single Arctic drilling season.

The review process was started last fall after the NEB turned down a request from joint partners Imperial and ExxonMobil Canada for an advance ruling on the adequacy of well control provisions for a proposed deepwater exploration well about 75 miles north of the outermost edge of the Mackenzie Delta.

The well was planned for an exploration lease which was one of two acquired by the partnership in 2007, carrying work commitments of C$585 million for rights to 508,000 acres on Exploration License 446.

Heated response to delay

The Imperial-ExxonMobil request was denied pending a generic policy review by the NEB that includes written submissions and a technical conference on June 3 and 4 to discuss the submissions.

The delay provoked a heated response from Imperial geosciences manager Michael Peacock, who replied on behalf of Imperial, telling the regulator that waiting for completion of a review would have “very serious implications” for EL 446 by eliminating an entire year from the nine-year license.

He said Imperial had spent C$150 million on developing well plans, acquiring 3-D seismic data and designing a drillship specifically to operate in the Beaufort.

Imperial warned the “continuing regulatory uncertainty” add to the risks associated with making these investments, would jeopardize its ability to procure an Arctic drillship, obtain permits, drill an exploration well and conduct a formal evaluation of the well results.

Peacock said the delay would add to the costs and the “already onerous inhibitions” to developing Canada’s Arctic resources.

Imperial: Deepwater drilling precluded

In its latest submissions, Imperial said the existing same season relief well would “essentially preclude the drilling of deepwater wells such as (the proposed Ajurak) well which require multi-season operations.”

The company said the probability of a blowout is one in 285,000 and should one occur “there are many better approaches than starting a relief well immediately. The best approach is preventive engineering.”

Imperial told the NEB that 295 wells were drilled in the Beaufort and Mackenzie Delta in the 1965-2009 period and none required a relief well, adding it alone has accounted for 107 wells.

Imperial said the Ajurak well targets depths of 8,400 feet to 17,400 feet, in water depths of 2,100 feet and would need three drilling seasons to complete and test, with the drillship able to operate without limitation from April 1 to Dec. 1.

Two to four icebreakers would be available to clear ice from around the drillship and help it maintain its position during ice incursions, while two ice-class and supply boats would provide additional logistics and resupply support.

Imperial, BP (which plans a baseline survey this year on its offshore exploration block) and CAPP all pressed the NEB to eliminate the same season relief well requirement and introduce a relief well policy that can be applied to all geographical areas under its jurisdiction.

BP said continuation of the same season relief well provision might well “impede further exploration in the Beaufort Sea.”

Instead, the NEB should establish goals and objectives to enhance safety and protection of the environment, leaving a same season relief well as “one of a suite of after-the-fact tactics to deal with a well control problem.”

BP also said it was statistically unlikely that a relief well could be completed in the same season.

Inconsistent with modern goal-oriented regulations

CAPP said the current same season relief well policy is inconsistent with a modern goal-oriented regulatory regime, and recommended a revised policy, emphasizing safety, protection of the environment, conservation of the resource and a “prevention first” approach.

Chevron Canada suggested consideration of an alternative well kill system developed with Houston-based Cameron, a global supplier of oil and gas equipment, to replace a same season relief well with an enhanced blowout prevention system.

The two companies entered an agreement in 2007 to develop a well control system and practices, engaging the Inuvialuit Game Council throughout the process.

The council told the NEB that a same season relief well or equivalent system should be required for operations planning to drill in the Beaufort, while the Tuktoyaktuk Hunters and Trappers Committee said it was opposed to Imperial’s proposed drilling program without a relief well in order to protect the region’s “subsistence harvesting of different mammal species”

The committee said Imperial has made no mention of compensating people who might be affected by a blowout.

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