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Prudhoe Bay singled out for marketing info Division of Oil and Gas has approved 21 of 22 PODs since new natural gas marketing information requirement instituted in January TIM BRADNER For Petroleum News
So far oil and gas unit operators are providing only general and limited information on marketing in response to a new Division of Oil and Gas policy requiring the information as part of annual field Plan of Development, or POD, approvals.
The PODs are normally routine and offer a way for field operators to inform the division of activities they plan over the next year. The division must approve the POD, and without it oil and gas activities cannot be done on state leases.
In January the division instituted a new policy requiring a section in the plan describing marketing activities.
Then-state Attorney General Craig Richards pushed for the new requirement and initially intended it only for the Prudhoe Bay field, which is an oil field that has large undeveloped natural gas reserves. However, the oil and gas division had to make the requirement apply to all POD renewals statewide, and not single out one field.
In the responses so far to the new policy Cook Inlet operators like Hilcorp Energy and Cook Inlet Energy have informed the division they sell oil to the Tesoro Corp. refinery at Nikiski and natural gas to utilities in the Southcentral region.
On the North Slope, operators inserted a few paragraphs to compliance with the requirement, most noting they have no surplus gas to sell and that all is committed to use as fuel or for enhanced oil recovery. Crude oil marketing was not mentioned.
21 of 22 POD renewals approved Since the requirement was made effective in January the division has received 22 POD renewals from unit operators, with 21 of these approved, oil and gas division spokeswoman Diane Hunt said.
There are five plans that are now being reviewed, and with approvals anticipated, and eight more that are anticipated through the rest of 2016, she said.
Only one that was applied for was not approved, the POD for Prudhoe Bay. The division had requested that Prudhoe Bay operator BP provide information on gas marketing activities by the other working interest owners, ConocoPhillips and ExxonMobil.
BP replied that it could not do this, noting anti-trust issues if it attempted to obtain marketing information, which is competitive, from its partners in the Prudhoe field.
Since the requirement was made effective in January the division has received 22 POD renewals from unit operators, with 21 of these approved, oil and gas division spokeswoman Diane Hunt said.
BP isn’t the only North Slope operator to tell the division it cannot provide information on marketing, however. In its proposed POD renewal for the Nikaitchuq field, field operator Eni Petroleum said “Eni does not have any information on marketing plans or opportunities.”
Despite that response, Eni’s POD for the Nikaitchuq field was approved.
Direction from governor’s offices The Prudhoe Bay disapproval was done at the direction of the governor’s office, according to sources, and is believed linked to plans being made to assert claims that Prudhoe working interest owners BP, ConocoPhillips and ExxonMobil are failing to comply with a “duty to produce and market” requirement in state oil and gas leases over the field.
That plan is also reported to be linked to the governor’s new proposal for a state-led gas pipeline project, which Walked announced Jan. 18.
Although crude oil has been produced from Prudhoe Bay since 1977 the claim reportedly will be made for the 26 trillion cubic feet of natural gas in Prudhoe’s reservoir which has not been marketed, mainly because there is no natural gas pipeline.
However, the gas is meanwhile being used to produce more crude oil.
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