|
State contracts combined PBU Niakuk PA
Kristen Nelson Petroleum News
Alaska Division of Oil and Gas Director Bill Barron notified BP Exploration (Alaska) at the end of July that the division is contracting a portion of ADL 34626 from the combined Niakuk participating area at Prudhoe Bay for failure to meet drilling commitments.
The contraction is an administrative contraction for the combined Niakuk participating area, CNPA. No acreage will be contracted from the Prudhoe Bay unit because ADL 34626 is held by production allocated to the West Beach, Point McIntyre and combined Niakuk participating areas, the division said.
ADL 34626 is offshore the North Slope in Stefansson Sound in the Beaufort Sea, on the northern edge of the Prudhoe Bay unit.
The division approved the combination of the Niakuk and West Niakuk participating areas into the combined Niakuk participating area in 2007, effective Jan. 1, 2008, contingent on the drilling, testing and certification of a well penetrating the Kuparuk River Sandstone within section 21, NE ¼, N ½ SE ¼ of township 12 north, range 15 east, Umiat Meridian, of lease ADL 34626 on or before three years from the effective date.
2010 extension In 2010, BP requested and the division granted an extension to the CNPA contraction date to June 30, 2014. The division said in its 2010 extension approval that the 2014 date was consistent with the contraction date set for other leases added to the Prudhoe Bay unit as part of a 2009 unit expansion, and said setting a common contraction date would allow the working interest owners “to properly prioritize and schedule drilling from the seasonally constrained Niakuk Pad to fulfill obligation on each of those leases.” The three other leases are to the east of ADL 34626 on the northern boundary of the Prudhoe Bay unit.
Barron said in the contraction decision that expansion of CNPA is not in the public interest “when BP has not shown the area is underlain by hydrocarbons or that the area will contribute to production.”
He also said that the contraction will require a revised allocation of CNPA production resulting “in a higher percentage of production allocated to lease areas (N ½ of ADL 34626 and 34625) where field costs may not be deducted from the state’s share of royalty oil production.”
Lands outside the original Prudhoe Bay unit are not subject to field cost deduction from the state’s share of royalty oil production.
—A copyrighted oil and gas lease map from Mapmakers Alaska was a research tool used in preparing this story.
| 