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End of the line Two Cook Inlet platforms to be shut in: Middle Ground Shoal field platforms Baker and Dillon were built in the 1960s; Unocal Alaska says it is no longer profitable to produce from them Kristen Nelson PNA Editor-in-Chief
Unocal Alaska Resources will be shutting in the Dillon and Baker platforms in Cook Inlet, company spokeswoman Roxanne Sinz told PNA Oct. 29.
The Spurr platform is already shut-in, so by early next year there will soon be three non-producing platforms in the inlet.
Sinz said the platforms have been under production for more than 35 years: Baker began production in 1965, Dillon in 1966.
“It has been determined that they have reached their economic limit, and because they are no longer profitable we will shut them in,” she said.
Unocal expects to shut in Dillon near the end of this year, and Baker by the end of the first quarter of next year. Sinz said the company is working with the state to address all issues concerning the shut ins.
Both platforms are in the Middle Ground Shoal field. Baker was the second platform to be installed in Cook Inlet, following platform A installation (also at Middle Ground Shoal) in 1964. Both platforms were originally operated by Amoco.
There are four platforms in the Middle Ground Shoal field, the most southerly of currently producing Cook Inlet fields: XTO Energy operates platforms A and C.
Baker platform is at the north of the field, Dillon at the south; the A and C platforms are in the middle of the field which runs approximately north-south offshore northwest of Nikiski.
Production figures from the Alaska Oil and Gas Conservation Commission for September show production averaging 574 barrels per day from the Baker platform and 452 bpd from Dillon, compared to an average of 3,000 bpd from A platform and 1,292 bpd from C platform. Year-to-date production totals for the platforms are: 170,422 barrels from Baker, 125,213 barrels from Dillon, 870,825 barrels from A platform and 324,734 barrels from C platform.
Life of leases triggers state abandonment If production on a lease is continuing, a platform on that lease can be shut down by plugging and abandoning wells and pipelines and cleaning up production equipment. That is the case with the Spurr platform in Cook Inlet, Bill Van Dyke of the Division of Oil and Gas told PNA Oct. 29. The platform is shut in, but because the lease on which it sits is still producing, the platform does not have to be removed.
But, he said, if production from the lease ceases — leases are held beyond their initial term by production — then the commissioner of the Department of Natural Resources has the right to require the platform owner to remove it. And there is a timeline for the removal. Van Dyke said the commissioner can grant extensions for platform removal. Because of the cost of bringing in the needed heavy equipment, probably from as far away as the Gulf of Mexico or the Far East, he said, it would make sense to remove more than one platform at a time. Plugging and abandoning One of the AOGCC’s duties is to regulate the plugging and abandoning of wells. As to the commission’s role when platforms are shut in, Commissioner Dan Seamount told PNA Oct. 30 that while Unocal had called him about the planned shut-in, the commission would need more information about the company’s plans — such as whether they are temporarily or permanently halting production.
Commission Chair Cammy Taylor said the commission’s goal is to make sure the wells are properly secured. The company might want to secure wells temporarily, she said.
Wells can be shut in, mechanically closed off, without commission approval.
But prior commission approval is needed for plugging and abandoning, Taylor said.
For offshore locations where wells are plugged and abandoned and the platform removed or dismantled, commission regulations require that all well casing must be removed to a depth of at least one foot below the mud line no later than when the platform is removed or dismantled. The commission’s regulations also provide: “If an agency acting on behalf of the state or federal government as lessor approves leaving the platform in place after well abandonment, the commission will accept that approval and waive requirements of this subsection.”
What would the operators like? The AOGCC held a hearing on platform removal in 1994 and Unocal told the commission it would like a 10-year window to remove platforms so that the work could be done in batches. The heavy equipment required would have to be brought to Alaska, and batching would allow several platforms to be removed in a season.
Unocal said a 1985 estimate by the National Research Council put the cost of removing the platforms one at a time in the range of $15 million to $25 million per platform.
Unocal told the commission that rather than removing the entire platform, it is recommending that the decks be removed and the legs toppled and allowed to corrode away. Those requirements, the company said, would be in line with what the U.S. Minerals Management Service and the state of California allow for abandonment.
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