May 18, 1999 --- Vol. 5, No. 26May 1999

April production down 2.4 percent from March

Alaska crude oil production for April was down an average of 26,763 barrels a day from March, a drop of 2.36 percent. The Alaska Department of Revenue Division of Oil and Gas Audit said that Alaska North Slope production was throttled back due to high inventories at Valdez on two occasions, April 3-5 and April 17-20, and that there was maintenance at Prudhoe Bay in preparation for the miscible injection enhancement project.

Alaska North Slope crude production averaged 1.079 million barrels a day in April, down 2.41 percent from a March average of 1.106 million barrels a day, and down 12.49 percent from April of 1998, when ANS production averaged 1.233 million barrels a day. Cook Inlet production averaged 30,419 barrels a day in April, down 2.28 percent from an average of 30,499 barrels a day in March.

1999 work complete at Red Dog

Drilling was completed April 2 on the Red Dog exploration well on the eastern North Slope between Badami and Point Thomson. The Alaska Oil and Gas Conservation Commission reported that the well has been suspended.

It was drilled to a measured depth (wellbore length) of 19,400 feet. Vertical depth was 12,379 feet. The well was directionally drilled from an onshore surface location to an offshore bottomhole location.

BP Exploration (Alaska) Inc. drilled the well, and company spokeswoman Carla Beam told PNA May 17, “We’re suspending it; we’re not abandoning it. We’ll be reentering the wellbore next winter. We were not able to complete what we wanted to do this winter. So will be talking with partners about work next winter.”

Legislature votes changes in AOGCC

On May 14 the Alaska Legislature sent to the governor two bills making fundamental changes in the Alaska Oil and Gas Conservation Commission.

Senate Bill 133, signed by the governor May 17, reorganizes the Alaska Public Utilities Commission, renaming it the Regulatory Commission of Alaska, moves the AOGCC in with the RCA and provides for a study on merging the two commissions.

Senate Bill 134 replaces the AOGCC’s current source of funding with a regulatory cost charge and adds four employees to the AOGCC’s professional staff. Both bills were sponsored by Sen. Drue Pearce, R-Anchorage.

SB133 mandates a study of merging the two agencies by Legislative Budget and Audit. Completion date for the study is January.

AOGCC funding source, quarters, to change

The Alaska Oil and Gas Conservation will move into the same quarters as the Regulatory Commission of Alaska by July 1, 2000. The Department of Administration has said it hopes to have the AOGCC — presently housed in its own building which is badly in need of repairs — moved well before the end of the year. After that time the two commissions would share record keeping facilities and clerical staff.

AOGCC’s funding, which has been based on a tax on production, will now be a regulatory cost charge based on the number of active wells in the state and the volume of oil or gas which is produced from those wells and the volume of oil, gas, water and other fluids — including waste slurry — injected into the wells. The commission will also be able to allocate expenses of investigations or hearings among the parties, including itself.

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