Commission cuts Milne fine for Hilcorp

The Alaska Oil and Gas Conservation Commission has issued a final order on a fine it issued against Hilcorp Alaska for failure to test blowout prevention equipment at Milne Point after use.

The commission had originally fined Hilcorp both for its failure to notify the commission of the use of BOPE as well as the failure to test BOPE after use and prior to reentering the well. The commission had proposed to fine Hilcorp $40,000, $20,000 of which was for failure to notify the commission of the use of BOPE and $20,000 for failing to test BOPE before it was used again.

Both fines were related to work on a Milne Point unit well, MPU I-03.

Hilcorp is the operator and 50 percent working interest owner at Milne Point.

The commission said in a May 3 order that Hilcorp requested an informal review of the Nov. 16 notice of proposed enforcement action, and that review was held Feb. 18, in advance of which Hilcorp submitted a consolidated brief covering four notices of proposed enforcement action, including the notice covering the MPU I-03 BOPE issues.

At the February review Hilcorp told the commission that the well site manager had provided proper notice to AOGCC via email regarding the use of BOPE, and said the proposed penalties were based on an “incomplete understanding of the factual record” and “overlooked” communications.

The commission concluded that Hilcorp did provide notice of BOPE use and said while the communication was “misleading and incomplete” the proposed penalty for notification “will be mitigated.”

The commission did impose the $20,000 fine for failing to test BOPE “after being used for well control purposes and prior to the next wellbore entry” and instructed Hilcorp to provide the commission “with a detailed explanation of how recurrence of this violation will be prevented in the future,” including correction actions Hilcorp has taken “to ensure accurate information is provided to AOGCC for decisions.”

- KRISTEN NELSON