Savant Alaska is now the operator of the Badami unit.
The Alaska Department of Natural Resources approved the designation on Oct. 14, making the Denver-based independent the smallest operator-producer on the North Slope.
It also makes Savant the only privately held operator-producer on the North Slope.
BP Exploration (Alaska) Inc. formed Badami in 1995, but after more than a decade of stops and starts at the eastern North Slope unit the company partnered with Savant in 2008 to see if horizontal drilling and hydraulic fracturing could boost production.
“As BPXA struggled with the unit, we have searched for an opportunity to transfer the unit to another company or companies that saw more potential in Badami than BPXA. … It is BPXA’s desire to take the next step in this transition by allowing farmees to take an active role in unit operations,” the company wrote to state officials in late August.
2010 restart
After three years of renewed operations, Savant restarted Badami in November 2010 and the unit is currently producing 1,300 barrels per day, well below the 30,000 to 35,000 bpd that BP originally expected but more than the unit has produced in years.
Originally, BP simply farmed-out the leases at the unit to Savant, but earlier this year BP transferred four Badami leases to Savant and partner ASRC Exploration LLC.
Although Savant is now the operator of the unit, BP is retaining its responsibility to decommission the existing Badami facilities and to plug and abandon all wells that aren’t transferred to Savant and ASRC through previous farm-out agreements. If BP relinquishes its working interest in the remaining Badami leases, though, the Division of Oil and Gas might require BP and Savant to work out a “financial assurance agreement.”
With the decision, there are now five producer-operators on the North Slope: BP, ConocoPhillips, Pioneer Natural Resources, Eni Petroleum and Savant Alaska.
BP, ConocoPhillips and Eni are all giant multinational companies, and Pioneer is a large independent with nearly $10 billion in assets in Alaska, the midcontinent and Africa.
—Eric Lidji
