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DO&G delays contraction of Northstar unit
Alaska’s Division of Oil and Gas wants to delay an enforced contraction of the BP-operated Northstar unit to give BP an opportunity to establish a new participating area in the unit. On Oct. 10 the division published a letter from DO&G to BP, stating the division’s decision on the contraction but saying that the decision requires agreement by the federal Bureau of Safety and Environmental Enforcement — the Northstar unit, straddling both state and federal waters of the Beaufort Sea, falls under both state and federal jurisdiction.
Apparently in September BP, on behalf of itself and Murphy Exploration, the other Northstar owner, had applied to the division for a contraction of the unit under the terms of the unit agreement. The unit agreement, which went into effect 10 years ago, requires a unit contraction by Oct. 11. As part of the contraction BP wants to retain within the unit a lease that contains an oil reservoir that is not currently part of a Northstar participating area and that also contains an aquifer that BP says could provide pressure support for that reservoir.
Lease needs to be in PA In the Oct. 10 letter division Deputy Director Jonne Slemons told BP that the terms of the unit agreement did not support BP’s request to retain the lease that is not part of the Northstar participating area. The division wants to use its discretion to delay mandatory unit contraction and is giving BP 120 days to apply for a participating area that includes the oil reservoir in that lease, Slemons said.
State law requires that, 10 years after production in a unit starts, the unit must contract to the land included within an approved participating area and any adjacent land that supports production. The division has the discretion to delay the unit contraction “if the circumstances of a particular unit warrant.”
—Alan Bailey
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