AOGCC halts new Meltwater drilling

AOGCC wants more information about why MI is migrating into shallower formations before ConocoPhillips can continue drilling

Eric Lidji

For Petroleum News

The Alaska Oil and Gas Conservation Commission is telling ConocoPhillips Alaska Inc. to hold off on drilling at a Kuparuk River unit satellite until the company and regulators can better understand why injected fluids have been migrating into shallower formations.

Starting in April 2002, ConocoPhillips noticed elevated pressures in the outer annulus — the area between the outer walls of a well at the surrounding geologic formation — of development wells in the Meltwater Oil Pool. Gas samples suggested that the miscible injectant used to enhance oil recovery in the field was migrating into the outer annulus.

For years, ConocoPhillips provided “periodic updates of monitoring and diagnostic efforts to the AOGCC” while it continued to make injections, but last year the company said a recent 4-D seismic evaluation determined that MI fluids were, in fact, migrating to shallower strata in the area. After ConocoPhillips made some adjustments to its reservoir management practices at Meltwater, the AOGCC in October 2012 allowed the company to continue MI injections under certain reporting requirements and pressure restrictions.

Because there are no potential underground sources of drinking water in Meltwater, the migration should not contaminate drinking water, but does violate AOGCC regulations.

Subsequently, ConocoPhillips asked the AOGCC to make six changes to the Area Injection Order for enhanced oil recovery at Meltwater, first among them being to expand the definition of the reservoir to include the shallower strata where the MI is migrating.

Currently, the reservoir only includes the Bermuda interval of the Meltwater sands, defined as extending from 6,785 feet to 6,974 feet in the Meltwater North No. 2A well.

ConocoPhillips wanted to move the top of the zone to 2,503 feet. The change would have included the Cairn — an interval extending from 6,411 feet to the top of the Bermuda.

When Phillips Alaska Inc. initially applied for Meltwater pool rules in 2001, it asked the AOGCC to include the Cairn in the reservoir, but the AOGCC decided “insufficient information is available to include the Cairn interval in the (Meltwater pool) at this time.”

Following a November 2012 hearing — where ConocoPhillips presented some testimony confidentially — the AOGCC denied the request, saying it would have violated existing state regulations. The AOGCC also denied a request from ConocoPhillips to allow it to skip weekly well monitoring during extreme weather and other emergencies. The AOGCC did, however, grant ConocoPhillips’ request to add several rules to the Area Injection Order covering well integrity, confinement of fluids, and injection pressures.

Now, the AOGCC is telling ConocoPhillips not to drill any new wells, or to convert any existing productions wells to injection wells, at Meltwater until the issue is resolved.

While noting that ConocoPhillips’ reservoir management adjustments at the pool appeared to be “allowing migration pathways to close,” the AOGCC said “more data are needed to assess the effectiveness of these migrating practices.” Starting in November, ConocoPhillips launched an 18-to-24-month study of the overburden in the area that the AOGCC called “critical” for understanding the characteristics of the Meltwater Oil Pool.

The AOGCC also determined that the reasons ConocoPhillips gave during the hearing for keeping certain material confidential did not meet state standards, but decided not to add those materials to the public record until after the end of the appeal period for the case.

Phillips Alaska Inc. discovered the Meltwater satellite in May 2000 and brought the satellite — the fourth at the Kuparuk River unit — into production in November 2001.

The company began its MI program at Meltwater in January 2002.