The Environmental Protection Agency today approved some modifications to the air quality permit for the Kulluk, the floating drilling platform that Shell plans to use for drilling in the Alaska Beaufort Sea. Shell applied for the permit modifications in mid-July, after conducting tests of the Kulluk’s engines. This year the company completed a multi-million dollar upgrade to the vessel’s emissions’ systems, to meet new stringent air quality standards.
The permit modifications are minor in nature and allow, for example, a change to the type of particulate filters used for engine exhaust and changing the specification for incinerator emissions.
And, because the permit remains a minor source permit, rather than a major permit, the permit changes can be made without a public comment period.
The Kulluk is currently in a holding position in the Beaufort Sea, waiting for the end of subsistence whale hunting in the area of Shell’s planned drilling before moving into operation. After issues relating to the deployment of its oil containment barge, a part of its oil spill response fleet, Shell will use the Kulluk to drill some top-hole sections of Beaufort Sea wells this year, rather than drilling wells into hydrocarbon bearing zones.
—Alan Bailey

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<FONT SIZE=5 COLOR=black>BP term price up 11.5 percent</font></P>

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<FONT SIZE=5 COLOR=black>Production up slightly in spite of 29-hour pipeline shutdown</font></P>

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Alaska North Slope September crude oil and natural gas liquids production was up 0.8 percent, a gain of 9,251 barrels a day, in spite of the 29-hour shutdown of the trans-Alaska pipeline system late in the month. 

<b>Prudhoe Bay, Endicott up from September</b>
Prudhoe Bay had the largest per barrel increase from August. Its production averaged 592,224 barrels a day, an increase of 12,568 barrels a day from August (up 2.12 percent). 
Endicott production rose 4,991 barrels a day in September, averaging 51,665 barrels a day, a 9.66 percent increase from August production averaging 46,674 barrels a day. Endicott’s satellite field, Eider, started production in June. 

<b>Lisburne leads decline</b>
The Lisburne production center had the largest per barrel decline between September and August, 4,836 barrels a day. September production at Lisburne averaged 157,520 barrels a day, down from 162,356 barrels a day in August and down 29.89 percent from an average of 204,610 barrels a day in September 1997. 
Milne Point had the largest percentage production decline in September, 7.64 percent, averaging 53,449 barrels a day, down 4,085 barrels a day from an August average of 57,534 barrels a day. Milne Point also had the only increase from last year, up 1.35 percent from an average 52,727 barrels a day in September 1997.
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<FONT SIZE=5 COLOR=black>Long-term test production begins at Midnight Sun</font></P>

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The first Prudhoe Bay oil field satellite has begun production. 
Major field owners ARCO Alaska Inc., Exxon Company USA and BP Exploration (Alaska) Inc. said Oct. 5 that long-term test production has started from the Midnight Sun oil field adjacent to Prudhoe Bay. 
The field is producing approximately 2,000 barrels per day of 29 API gravity oil and 750,000 cubic feet of gas per day from the discovery well. An additional delineation well is being drilled on ARCO/Exxon acreage east of the discovery well. 
The companies said they plan to apply for additional state approvals associated with permanent production operations in 1999. The long-term test production will be from an existing drill site using Prudhoe Bay facilities to process the crude. 
Midnight Sun is the first oil and gas accumulation in or around Prudhoe Bay field to begin production under terms of the recent facility-sharing agreement among the Prudhoe Bay owners. 
Midnight Sun is one of a number of satellite fields which have begun production since December 1997. Others include Tarn, Tabasco and West Sak, near the Kuparuk River field and Eider near the Endicott oil field. 

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