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BLM finalizes unitization, other regulations for NPR-A leases
Petroleum News Alaska
The Bureau of Land Management has published a final rule on unitization, suspensions and subsurface-storage agreements that relate to oil and gas activities in the National Petroleum Reserve-Alaska. The final rule appeared in the April 11 Federal Register and adds provisions to BLM’s existing NPR-A oil and gas regulations.
“The final rule, which implements recent changes in a law that governs oil and gas activities in the NPR-A, complements existing oil and gas leasing procedures in NPR-A,” said BLM Director Kathleen Clarke.
“Under this rule, companies operating in the NPR-A will be able to unitize their oil and gas leases. Unitization maximizes production while minimizing the environmental impact of development,” Clarke said. Unitization, lease suspensions, storage Under a unit agreement, or unitization, several lessees in a given area may share in the risks and costs — as well as the potential benefits — of oil and gas exploration and development by grouping their leases into one block and delegating the operating responsibilities to one operator, the agency said. The grouping also enables two or more leases to produce using fewer wells, which then reduces the size of the drilling area and the drilling impacts to the environment.
BLM said lease suspensions allow much-needed time to plan for development and construction of activity. The suspensions, which would be granted by BLM, allow leases to be extended beyond their authorized time or term by stopping the clock under circumstances that are beyond the control of the operator.
BLM said it would also be able to suspend a lease term after discovery of producible oil or gas to allow time for construction of a transportation system from the new well to a gathering or storage system or some other facility.
The subsurface storage agreements will assist production in the NPR-A by allowing operators, for a fee, to store oil or gas in existing geological structures rather than in above-ground tanks while waiting for distribution.
BLM said severe climate or other factors often make it difficult to construct distribution and storage systems for the oil and gas, and little environmental risk is posed by subsurface storage.
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