Eni fined $440,000 for failure to test
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AOGCC requiring corrective actions; 19 wells not tested for mechanical integrity within required 4-years; Eni also fined previously
Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission is fining Eni US Operating Co. $440,000 for late mechanical integrity tests on 19 wells.
In a July 21 order, the commission said Eni failed to test the injection wells at Nikaitchuq within the required four-year cycle. AOGCC said this violation is a recurrence of missed mechanical integrity tests in the previous testing cycle and said changes the company made in its tracking system, proposed to rectify the 2016 violations, did not prevent recurrence.
The commission held an informal review with Eni on July 8. The company’s “presentation outlined the summary of events, the root causes for missing the MIT deadlines, and solutions in response to the proposed enforcement,” AOGCC said, but the company did not dispute the violations, although it did suggest the penalty amount be reduced.
The current mechanical integrity test results were due in December, based on previous tests being completed in December 2016, and Eni notified the commission in March that the tests had been missed and were overdue, but did not request additional time to complete the tests.
The commission said the violations at the Nikaitchuq unit “are not isolated and demonstrate Eni’s ongoing compliance problems,” which include the earlier failure to test wells at Nikaitchuq, resulting in a $110,000 fine; failure to submit blow out prevention equipment tests at Nordic Rig 4 in 2018; and failure to complete required sundry report of well work within the required time for Nikaitchuq unit well SD 37-DSP1, resulting in a $10,000 fine.
Testing results “Eni worked with diligence and urgency to coordinate with AOGCC to witness the required testing,” and the commission witnessed passing tests on 13 of the 19 wells on March 21 and April 30, mitigating the penalty.
While daily penalties were not imposed, this violation did occur after a penalty was assessed in 2016 for the same violation, the commission said. The penalty is $20,000 for each of the 19 wells overdue for testing, and an additional $10,000 for each of the six wells which failed the required test.
After the 2016 failure to test, the commission required, in addition to the fine, that Eni “develop and implement a tracking system for regulatory obligations, including an automated alert for approaching and past-due obligations, with notifications provided to Eni personnel responsible for the regulatory obligation.”
In addition to the current penalty, “Eni is required to improve its tracking system for regulatory obligations by implementing the corrections actions to the identified causal factors” the company identified in its investigation report on the failure to meet the testing requirements.
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