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AOGCC fines Hilcorp $695,600 for unauthorized Polaris injections
Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has imposed a $695,600 civil penalty on Prudhoe Bay operator Hilcorp North Slope for failure to comply with the Polaris Oil Pool Area Injection Order, which requires commission authorization for enriched gas injection at Polaris beyond three wells authorized in the AIO. AOGCC's decision and order was issued Nov. 24. The commission said in a Feb. 4, 2025, request for information and notice of investigation that Hilcorp notified it of the unauthorized injections on Dec. 12, 2024, telling AOGCC that it had found no record "of requested authorization per Rule 2 of AIO 25A for enriched hydrocarbon gas injection for either well."
The wells are S-201A and S-210, both drilled and completed by the previous Prudhoe Bay operator in late 2019/early 2020.
At S-201A enriched hydrocarbon injection began in April 2020 under the previous operator; at S-210 enriched hydrocarbon injection began under Hilcorp North Slope operatorship in October 2020.
There is a $100,000 fine for the initial violation at each well and additional fines based on the number of days the wells operated/injected enriched gas without authorization: $303,600 for 759 days at S-201A and $192,000 for 480 days at S-210.
Hilcorp action In a March 3, 2025, response to AOGCC's request for information and notice of investigation, Hilcorp North Slope provided a root cause analysis, citing transfer of operatorship at Prudhoe as the root cause of the incident.
"Individuals making decisions were unaware of Polaris Oil Pool specific AIO requirements."
Hilcorp also said there was an inadequate work process, telling the commission that while injection computer based training existed it "was not assigned correctly in 2020 and is not specific to Polaris Oil Pool AIO." Hilcorp also said there was no process in place for reservoir engineer and operating engineer verification of AIO requirements.
Contributing factors included that a July 2023 review of Polaris injectors did not recognize that existing authorizations for the two wells "were due to well completions and not for authorization of MI (miscible injection). Same lack of awareness impacted review process by not recognizing hazards present with pool specific AIO requirements."
Actions the company listed to prevent recurrence included requesting an update to AIO 25A to modify Rule 2 and creating an area injection order and conservation order pool summary, controlling documentation and maintaining a six-month review and approval by land and asset team leader.
In a Nov. 13 response to AOGCC's notice of proposed enforcement action, Hilcorp said it would not contest the proposed penalty.
It said the company "strives for continued reduction of non-compliance events with increased training, oversite and tools to assist in training, oversite and tools to assist in tracking of injection compliance with the ultimate goal of zero non-compliance events. Increased training and focus placed on injection compliance following previous incidents contributed to the discovery and immediate self-reporting of unauthorized injection into S-201A and S-210, dating back in part to the previous operator. Unauthorized injection on S-201A and S-210 has driven the Hilcorp North Slope team to implement additional substantive actions to prevent recurrence."
In its Nov. 24 order, the commission noted that Hilcorp met with AOGCC staff Nov. 12, a meeting with included an "update on the status of results of its internal gas-analysis investigation and associated corrective actions," including formation of a well integrity team, "training and procedural conformance measures, development of an injectivity-authorization tracking spreadsheet, implementation of quarterly injection-compliance reviews, and designation of a new single point of contact (SPOC) for Miscible Injection (MI) injection."
In its findings and conclusions, the commission said: "Hilcorp's violations related to its Underground Injection Control Class II operations constitute repeated failures to comply with AOGCC-imposed conditions of approval and failures to obtain prior AOGCC authorization before implementing changes to an approved permit or order. These violations warrant the imposition of civil penalties proposed in the Notice."
"Injection conducted in violation of orders, conditions of approval, or statewide regulations has not been reviewed or approved by the AOGCC and therefore carries the potential to damage reservoir(s), cause waste of resources, and increase the risk of loss of containment of injected fluids."
The commission said that in assessing the penalty it "considered Hilcorp's compliance history, the need to deter similar conduct, the absence of injury to the public or the environment, and Hilcorp's notification to the AOGCC upon determining the noncompliance. Hilcorp's corrective efforts and cooperations with the investigation were also taken into account."
In addition to the fine, the commission said, "Hilcorp is required to improve its regulatory compliance by implementing the corrective actions as detailed in the Hilcorp internal investigation reports as emailed to the AOGCC dated March 5, 2025, that included a root cause analysis and actions to prevent recurrence."
--KRISTEN NELSON
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