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$45K fine stands against ConocoPhillips Alaska Oil and Gas Conservation Commission reaffirms earlier finding that company committed violations at Kuparuk injection well Wesley Loy For Petroleum News
State drilling regulators have reaffirmed a $45,000 fine against ConocoPhillips Alaska Inc. for alleged violations at a well in the Kuparuk River unit on the North Slope.
In a final decision and order dated Oct. 3, the Alaska Oil and Gas Conservation Commission gave the company 30 days to pay the civil penalty.
The case began in December 2012, when the commission issued an enforcement notice to ConocoPhillips regarding an injection well known as KRU 3Q-16.
The notice said the company failed to complete a mechanical integrity test on 3Q-16, and failed to promptly report to the commission a “pressure communication” in the well.
ConocoPhillips asked the commission to reconsider the matter, and a hearing was held during the summer.
The company “presented nothing during the hearing” to warrant a change in the enforcement action, the commission’s final order said.
‘Out of compliance’ ConocoPhillips operates Kuparuk, the state’s second most productive oil field after Prudhoe Bay.
The company was supposed to conduct a mechanical integrity test on well 3Q-16 on or before Sept. 25, 2012, but this wasn’t done, the commission said.
“The well was out of compliance, but continued injection for 37 days,” the final order said.
Further, a review of pressure data indicated “significant pressure anomalies,” which were not reported to the commission, the order said.
Regulations specify that if signs are seen of pressure communication or leakage in any casing, tubing or packer, the operator “shall notify the commission by the next working day.”
The failure to notify spanned 33 days, the order said.
ConocoPhillips internally determined the pressure anomalies did not constitute communication, but this effectively prevented the commission’s review of the issue, the order said.
Mitigating factors The commission said it reduced the civil penalty from the statutory maximum after considering a number of mitigating circumstances, including the company’s “general history of satisfactory compliance and practices,” its eventual notification to the commission, the lack of an actual threat to public health or the environment, and the company’s shut-in of the well after determining it was out of compliance.
However, the commission noted two past cases involving ConocoPhillips and “missed” mechanical integrity tests on wells.
In addition to paying the $45,000 fine, the commission ordered the company to “provide a detailed description of its Underground Injection Control regulatory compliance program.”
Also, the company must provide details of its tracking system for determining when mechanical integrity tests are required.
Lastly, ConocoPhillips must provide a “root cause analysis” addressing the violations.
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