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Repsol completes two North Slope wells Gas blowout at Qugruk No. 2 disrupts drilling program; Kachemach No. 1, Qugruk No. 4 completed by end of winter exploration season Alan Bailey Petroleum News
After a North Slope exploration season that might be characterized as a “full Alaska experience” Spanish oil major Repsol, a newcomer to the Alaska oil scene, has been reviewing the lessons learned following a gas blowout on one of its exploration wells, Bill Hardham, Repsol’s Alaska operations manager, told Petroleum News March 13.
Although the blowout on the company’s Qugruk No. 2 well caused delay and disruption to Repsol’s drilling program, the company did eventually complete two wells: the Kachemach No. 1, to a depth of about 10,100 feet, and the Qugruk No. 4, to a depth of about 7,700 feet, Hardham said.
The Qugruk well is located near the Beaufort Sea coast on the Colville River Delta, with the Kachemach well some distance to the south, just east of the Meltwater participating area of the Kuparuk River unit.
Repsol is partnering in its drilling program with 70 & 148 LLC, a subsidiary of Denver-based Armstrong Oil & Gas, and with GMT Exploration Co. LLC.
Ambitious plan Having acquired interests in about 500,000 acres in North Slope leases that were already part way through their lease terms, with some due to expire within the next year or two, Repsol has been anxious to forge ahead with drilling in its acreage, Hardham said. So the company initially planned to concurrently use five drilling rigs to drill multiple well penetrations at five locations. However, after listening to concerns expressed by residents of Nuiqsut, a community near the planned drilling locations, the company decided to scale back its plan, opting instead to use four rigs at four locations while only drilling concurrently with up to three rigs.
“That was something that the community thought was more reasonable than what we initially proposed,” Hardham said.
The revised plan would have resulted in four wells: the Kachemach 1, the Qugruk 1, the Qugruk 2 and the Qugruk 4 (abbreviated as K-1, Q-1, Q-2 and Q-4), with the three Qugruk wells being drilled at different locations in the same general area.
Successful start As the winter approached, Repsol started the construction of the ice roads that it would need for access to the drilling sites, collaborating with Pioneer Natural Resources to share part of the annual ice road that Pioneer constructs to its offshore Oooguruk oil field. To support its operations, Repsol had to install several temporary camps, including a camp on an ice pad next to a ConocoPhillips well pad on the western side of the Kuparuk River unit. And the company chartered an aircraft for flying personnel to and from Anchorage.
Repsol started drilling the K-1 well in early-February and shortly afterwards starting drilling Q-2.
At that point the company’s challenging logistical exercise in support of the drilling was progressing pretty much to plan.
“Up to that point we had, I think, done pretty well pulling it off,” Hardham said.
Shallow gas But a few days after the start of drilling of Q-2, about half an hour before a group of Repsol managers was due to visit the drill site, the drill bit penetrated an unanticipated shallow gas pocket, causing the well to kick and shoot drilling mud onto the snow and ice adjacent the drill pad. The incident occurred while the crew was drilling the surface section of the well, before setting the surface casing and installing the blowout preventers, Hardham explained.
The drilling crew responded well, ensuring that gas flowing from the well passed through a diverter pipe, away from the rig, and shutting down the power on the rig to prevent a gas explosion. The rig crew did nothing wrong, Hardham said.
No oil was spilled. And there were no injuries or major damage. Gas flowed from the well for about eight hours, with water from the underground rock formation then flowing for another day or so.
Incident response Invoking its pre-prepared incident response plan, Repsol activated its contracts with incident response companies and established an incident command center managed by a unified command. The company also stopped drilling its K-1 well — the company wanted to focus on dealing with the Qugruk incident and did not wish to risk the possibility of a second incident while it was still bringing the Q-2 well under control, Hardham said.
Once the Q-2 blowout happened, the response to the incident proceeded very successfully, he said.
And drilling at K-1 stopped for about three weeks, restarting around March 8, Hardham said.
To enable the plugging of the unsecured well it was first necessary to thaw out and clean up the drilling rig which had been shut down in severely cold conditions. Eventually, about a month after the incident, it became possible to plug the well with cement.
Drilling mud that had spilled from the well, being water based, had formed a solid, frozen slab on top of a sheet of ice in an area of less than an acre adjacent the ice drilling pad. The water-based mud was environmentally benign, Hardham said. It took about three weeks to break up and remove the frozen mud, with the cleanup finishing around April 8. Repsol plans to inspect the site in the summer to evaluate any need for follow up work, Hardham said.
Permits withdrawn Following the Q- 2 incident the Alaska Oil and Gas Conservation Commission withdrew the drilling permits for Repsol’s remaining Qugruk wells. The commission wanted new permit applications, demonstrating Repsol’s understanding of what had caused the Qugruk incident and explaining how the company would address the blowout risk when drilling those other wells, Hardham said.
The gas pocket that caused the blowout was in a shallow rock formation that cannot necessarily be seen in seismic section — Repsol submitted revised drilling plans involving the setting of surface casing and installing the blowout preventer before drilling to the depth of this formation, Hardham said. The company also specified the use of a heavier drilling mud, he said.
The commission re-issued the permits. But at this point Repsol decided that there was insufficient time left in the season to drill the planned Q-1 well.
“In the end we did not pursue that well this year — we just didn’t have enough time left,” Hardham said.
Two wells completed However the company did proceed with the drilling of the Q-4 well, a well designed to be drilled from an ice island.
“We reached TD (total depth) on that well a few days ago and we are doing the logging right now,” Hardham said.
And meantime the drilling and logging of the K-1 well had been completed, with Repsol planning to finish all of its drilling operations by April 15.
Repsol is still assessing the data from the two wells that it finally completed and is not yet in a position to announce the results of the drilling, Hardham said.
Extremes Looking back on its experiences from the winter, Repsol has found Alaska to be a land of extremes, both in terms of the climate and the remoteness of the land.
“The logistics is every bit as challenging as we were led to believe, but that went well for us — we had a strong logistics plan,” Hardham said.
And it was a particularly cold winter, with multiple days where operations had to be shut in because of the low temperatures. The company even encountered a polar bear situation, with a sow and two cubs causing an interruption to the industrial operations.
“It approached our sea-ice road and so we had to close down our operations and monitor the bear,” Hardham said.
Taking advice from locals, the field crew waited for the night and, with no traffic about, the bears crossed the road and headed north towards the sea.
Return next winter Despite the challenges, Repsol plans to return to the North Slope next winter.
“We’ll be looking at a program next winter,” Hardham said. “We need to evaluate the results of the two wells that we drilled and we would be looking to permit at a minimum the two locations that we did not get to drill this winter, the Q-1 and Q-2.”
Repsol feels confident about finding oil in its acreage. But, with expectations of finds that are fairly modest in size, development costs and production tax levels will be key factors in the viability of field development, Hardham said.
And Repsol hopes that the open manner in which company dealt with government agencies and the local communities when responding to the Q-2 incident has gained everyone’s respect, he said.
“We hope we’ve gained some respect in how we reacted to this and how we conducted ourselves,” Hardham said. “We’re not disheartened going forward. Obviously it’s a setback and it’s costly, but we intend to proceed. The company is quite enthusiastic about the opportunities up here.”
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