Arctic OCS reparations

ConocoPhillips files plans for drilling in the Chukchi Sea starting in 2014 By Alan Bailey ConocoPhillips is moving ahead with its plans to drill exploration wells in the Chukchi Sea, starting in the 2014 open water season, Mike Faust, the company’s Chukchi Sea exploration project manager, told the National Marine Fisheries Service’s annual Arctic Open Water meeting on March 8. On March 1 the company filed its Chukchi Sea exploration plan with the Bureau of Ocean Energy Management, Faust said. The agency will review the plan for completeness before publishing it for public review. In February ConocoPhillips filed the corresponding oil spill response plan with the Bureau of Safety and Environmental Enforcement. Devil’s Paw The company’s Chukchi Sea lease positions include two prospects: part of the Burger prospect that Shell plans to drill this year, and the Devil’s Paw prospect. ConocoPhillips has no current plans to drill at Burger but does anticipate drilling one well per year in its Chukchi Sea Devil’s Paw prospect using a jack-up drilling rig, Faust said. Depending on ice and weather conditions, and on drilling progress, it might be possible to drill two wells in a single year, but one well per year is probably a more realistic expectation, he said. “Our plan is to drill one well. We’re going to go out there and be prepared to drill two,” Faust said. In its Devil’s Paw project ConocoPhillips is partnering with Statoil and OOGC, the U.S. subsidiary of the Chinese National Offshore Oil Corp. The Devil’s Paw prospect is located about 120 miles west of the Chukchi Sea coastal village of Wainwright and is about 80 miles from the nearest landfall, Faust said. The prospect is the site of the Klondike well, drilled by Shell into a major Chukchi Sea geologic structure in 1989. Although the Klondike well did not encounter commercial quantities of oil and gas, ConocoPhillips clearly views the geologic setting of the prospect and the results of the Klondike drilling as warranting further investigation at considerable expense. Although previous drilling did not conclusively demonstrate the viability of oil and gas development in the Chukchi Sea, ConocoPhillips believes that there is a good chance of finding the type of very large oil field necessary for commercial success in this remote region, Faust said. “Oil development would lead to significant workforce training opportunities, jobs, careers, increased community investment, and very significant tax revenue for the state and for the (North Slope) Borough,” Faust said, commenting that the necessary supporting onshore pipeline system, for example, would generate property tax revenues. Open water ConocoPhillips will only drill during open water conditions, with the drilling equipment being removed from the drill site should sea ice unexpectedly threaten the drilling operation, Faust said. “We have no plans to drill when there’s any ice on location at all,” Faust said. Based on past ice records, the drilling season should last from mid-July to mid-October, with that October end date allowing time for the drilling of a relief well in the unlikely event of a well blowout — it would likely take about 30 days to drill a well at Devil’s Paw, Faust said. In the interests of anticipating and accommodating any unexpected sea-ice movement, ConocoPhillips has developed an ice alert program, making use of frequently downloaded synthetic aperture radar satellite data to spot ice floes even under a cloud cover or at night. ConocoPhillips plans to use a brand new, state-of-the-art rig, equipped with the latest air emissions equipment and capable of operating in up to four-tenths sea ice cover, even although the rig will not be operating in ice in the Chukchi, Faust said. Ideal location And the location of the Devil’s Paw prospect, relatively far south of the likely summer sea-ice extent and under a water depth of about 160 feet, is especially favorable for a jack-up drilling operation, Faust said. A jack-up rig has huge sliding legs that can be jacked down to the seafloor and then used to lift the rig floor above the maximum height of sea waves. This arrangement creates a stable drilling platform that enables the well blowout preventer and other well control equipment to be located on the rig floor, rather than on the seabed, thus allowing easy access to this equipment, Faust explained. “It’s essentially a land rig sticking up some meters above the sea,” he said. And, being fixed rigidly to the seafloor without the need for propellers to keep it in position, the operation of the rig will be relatively quiet, he said. Capping stack To allow for the possibility of a blowout preventer failure, as happened in the Gulf of Mexico Deepwater Horizon disaster, ConocoPhillips is going to install on the seafloor what is called a “capping stack,” the type of equipment eventually used to seal the spilling Gulf of Mexico well. The approximately 150-ton capping stack, in place from the start of the drilling, with the well string passing through it, will be able to shear through the drill pipe, capping the well at the top of the well casing if necessary, Faust said. “That stack could be triggered from the rig. It could be triggered from a boat,” he said. However, the company does not expect an accident. A well at Devil’s Paw should be very similar in terms of drilling complexity to the more than a thousand wells drilled to date at ConocoPhillips’s Kuparuk River field in the central North Slope, Faust said. “We are constantly drilling this exact same kind of geology,” he said — the three primary drilling engineers working on the Devil’s Paw project have between them more than 90 years of experience. And, with a previous well at the Devil’s Paw location, subsurface conditions are known. ConocoPhillips has also acquired the experience of drilling 50 exploration wells in the Alaska Arctic since 1998, including in some in very remote locations, Faust said. Logistical challenge The logistical exercise of deploying a major Arctic drilling fleet, including all of the necessary oil spill response assets, will be a major challenge, Faust said. At the moment ConocoPhillips is engaged in the detailed planning for the operations and in the procurement of equipment. The company hopes to award all contracts for required vessels and equipment, including the drilling rig, by the end of 2012. “For an operation like this it really does take a couple of years of very detailed planning and a lot of work with all of the different contractors involved,” Faust said. “We have to spend a lot of time planning, ensuring that all of the safety precautions are in place, ensuring that all of the communications and simultaneous activities are really well tied together.” ConocoPhillips has spent much time with North Slope communities and is aware of past concerns expressed by North Slope residents that the oil industry had been moving forward too quickly with offshore development, Faust said. “We’ve really tried to step back and take a paced approach, understand what everyone’s concerns are, address as many of those as we possibly can,” Faust said. “We believe the time is right, now, to step out and actually drill a well.” Environmental studies ConocoPhillips has been involved in offshore environmental studies in the Chukchi Sea since 2006 and is proud of its involvement in the collection of baseline environmental data, Faust said. And in the offshore work that the company has conducted to date there have been no safety incidents and no injuries, he said. During drilling operations marine mammal observers will be stationed on the drilling rig and support vessels, and acoustic recording buoys will detect animals not observed on the sea surface. A monitoring program will determine any impact from permitted discharges from the rig by taking samples from the environment around the rig before, during and after the drilling operations. Some sampling will be done a year after the drilling, although no environmental impact is expected, Faust said. In addition to filing its exploration and spill response plans, ConocoPhillips has filed all of its permit applications for its Chukchi Sea operations, Faust said. The company has also applied for authorizations for the incidental disturbance of marine mammals. “We do believe that it’s appropriate to start working on those applications immediately,” Faust said. “There’s a lot of work that went into building those and we want to make sure that we have a good open dialogue with the agencies, and that … we have those authorizations in hand before we go out and commit hundreds of millions of dollars on equipment.” In early April the company will meet people from the North Slope Borough’s mayor’s office, to go through all of the Chukchi Sea permits in detail — the company will hold similar discussions with any of the North Slope communities that are interested in doing that, Faust said. Petroleum News