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Home My WebLink AboutCO 214Conservation Order Cover Page XHVZE This page is required for administrative purposes in managing the scanning process. It marks the extent of scanning and identifies certain actions that have been taken. Please insure that it retains it's current location in this file. ,j'_~_ Conservation Order Category Identifier Organizing RESCAN [] Color items: [] Grayscale items: [] Poor Quality Originals: [] Other: NOTES: DIGITAL DATA [] Diskettes, No, [] Other, No/Type OVERSIZED (Scannable with large plotter/scanner) [] Maps: [] Other items OVERSIZED (Not suitable for plotter/scanner, may work with 'log' scanner) [] Logs of various kinds [] Other BY: ROBIN~ Scanning Preparation BY: ROBIN ~ Production Scanning Stage I PAGE COUNT FROM SCANNED DOCUMENT: PAGE COUNT MATCHES NUMBER IN SCANNING PREPARATION: X'" YES ~ NO Stage 2 ~ MARIA IF NO IN STAGE 1, PAGE(S) DISCREPANCIES WERE FOUND: ~ YES BY: ~ MARIA (SCANNING IS COMPL'ET~ AT THIS POINT UNLESS SPECIAL ATrENTION General Notes or Comments about this Document: IS REQUIRED ON AN INDIVIDUAL PAGE BASIS DUE TO QUALITY, GRAYSCALE OR COLOR IMAGES) 5/21/03 ConservOrdCvrPg.wpd STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 Re: THE APPLICATION OF SOHIO ) ALASKA PETROLEUM COMPANY for) an order amending Conserva- ) tion Order No. 145, Rule 15,) to provide for a "contin- ) gency production account". ) Conservation Order No. 214 Prudhoe Bay Field Prudhoe Oil Pool October 21, 1985 IT APPEARING THAT: · Sohio Alaska Petroleum Company, in coordination with ARCO Alaska, Inc., by letters dated September 5 and 25, 1985, requested an amendment to Rule 15 of Conservation Order No. 145 to permit production to exceed the currently allowed annual production by five million barrels for the purpose of establishing a one-time "contingency production account" to be maintained for so long as pool productivity enables. · Notice of public hearing was published in the Anchorage Times on October 5, 1985. · There were no protests to the request set forth in the notice of public hearing. FINDINGS: 1. · In the absence of natural gas sales, pool voidage is occurring at annual rates substantially lower than originally estimated. To date, actual pool performance appears to be favor- able as compared to the original prediction of pool performance with respect to the Pool's ultimate recovery. CONCLUSIONS: Overproduction of the allowable maximum annual oil offtake rate by five million barrels to establish a one-time "contingency production account" will not create waste. Conservation Ordei No. 214 Page 2 October 21, 1985 NOW, THEREFORE, it is ordered that: read: Rule 15 of Conservation Order No. 145 is amended to The maximum annual average oil offtake rate is 1.5 million barrels per day plus condensate production. The maximum annual average gas offtake rate is 2.7 billion standard cubic feet per day, which contemplates an annual average gas pipeline delivery sales rate of 2.0 billion standard cubic feet per day of pipeline quality gas when treating and transportation facilities are available. Daily offtake rates in excess of these amounts are permitted only as required to sustain these annual average rates. The annual average offtake rates as specified shall not be exceeded without the prior written approval of the Committee. Annual average offtake rates mean the daily average rate calcu- lated by dividing the total volume produced in a calendar year by the number of days in the year. However, in the first calendar year that large gas offtake rates are initiated, following the completion of a large gas sales pipeline, the annual average offtake rate for gas shall be determined by dividing the total vOlume of gas produced in the calendar year by the number of days remaining in the year following initial delivery to the large gas sales pipeline. Effective 1985 the maximum annual average oil offtake rate of 1.5 million barrels of crude oil per day may be exceeded for the purpose of establishing a one-time five million barrel "contin- gency production account" which may be maintained for so long as pool productivity permits. DONE at Anchorage, Alaska and dated October 21, 1985. CAia%aCho'~tand Gas C~nl%~ravnation Commission Harry W. /Kugler, Cop~nissioner Alaska Oil and Gas zConservation Commission PUBLICATZON' Ai"~CHD~AGE TI ' r P.O. ~OX 40 ~,,,ICHORAGE'. ALASKA 99510-0040 &LASKA OIL &GRS CONSERVATION 3001 PORCUPINE DRIVE ANCHORAGE. AK 99501 LANNA SIH~ONS o BEING 9UB¥ SWORN. ACCORDING TO hAW DECLARES: THAT SHE I$ THE hEGAL CLERK OF, THE ANCHORAGE TIMES, A DAILY NEWSPAPER PUBLISHED IN ~HE ~OWN, DF, ANCHORAGE" IN THE THIRD JUDICIAL DI¥I~IDN, STAT~ OF ~GAS~A, AND THAT ~Hg NO?IC~ OF......,...,.....,,,..-.....- A0-08-5554 WAS PUBLISHED IN,,,,.,.,',,,,,,,.,,',,., OF THE. ANCHORAGE. TIMES. BEGINNING 'ON,,,,,,,,,,,,:,',,,,.,,,,,,,,, ENDING'ON...............-.,..--.-.'.-. 1 ISSUES 10f05/85 THE SIZE OF T~i,$ AD WAS,....,.,..., 67 LIN·ES Notic~ of p~llc meeti.~ STATE OF ALASKA , Alaska Oil and'Gas ' '. Conservation Commlsslonl,' ': ALASK~ ' PETROLEUM COMPANY In r.~X~dlnation with .ARCO ALACK_A, INC., Ooeromrs of'the P~fN~ee, Bay Unit, ',to overlifl the. 1985 annual , allowable, offtake ' · from the Prudhoe:Oil Pool, ' Prudhoe BoY Fleld,tooffset ' future ,interruptiOn' In the , Io.Wable, crude pII 'prodUCfl. on rate resulting trom a molar faCllity'shut-down event. ' ' , , ',, , , , The'AlaSKa OII arid Gasi,C0n. servatlon ,CommiSsion has been ~ requested,,,to Issue an order per. mitring, ,the operators ,of ,.the Prudhoe,,Bay Unit to produce ma'xlrnur~,of 5 million ImtrelS of crUde'~oll,'in~ excess of, fNe allowa- b3e'.,':,ar~nuql alga.kO 9et, ~rth In Ii , con'~FVc~fl0n ureer'No'. '1'45 asa II coo.f.l,rtg.encyi account, and ,,ltd II ,,,maintain 'the account 'in,:subse- II ' quenf years for so long as proC, Il ' 'ti~0ble:(~O,off~.t any, Interruption II ,Of,~P'roduCflon ir1 caSe:~,of'(],',future II ~h~own of the pipelln'e,or ~a'll i, malC)r 'facility In' the 'Pr0dhee',ll · ' Ba~,Fleld; ' ,'" ,:,.' '", .,.: . , ,, , ,.,,. :,':'"~:~:~ii'S, ',~ Who. ,.m~ ',.~ ,,%. ;.'~?'i~.~d'," '!~ 'the. :re.~ren~e~ .omer .' i~m 'the.~'da~ ~t. thl$'.o~t}l I~atlon ..ih~hi~thleh ~'orfl e:.a i~r~est. I~ wrlf-' ,.In~;i Stating In ~etall th~ n~tuv, ,O~,'~".the' ag~rleveme~t, and ..their , ~'e.j~'U~st fgr a hearlng:.'.The'Place. '., 'o_f::f!l/O'~ ~s th~; Alaska oiL'.uno ...'~a:S':.~C0'nServot mnn Comm.lss~0n, '.,300]~:. Porcupine ,Drive,, An.chop .feSt.,.l~,. flmely,fl ed;'U, h~urlng on '.'"th.e.,',l;~tfer will be>.neld' at'.th'e ' T0~¢.'17~ -1985 at which time pro. testants and others may be heard, if no such protest Is timely filed, the Commission. will c~nsjder the Issuance of the. ... o~de~,.wlfhou, f.o hearing. . ,,, ,, .... .,~, ,, , , ,, , SIGNED........., THE PRICE OF ·THIS AD IS...........,. $ 21.44' THE AD NUMBER I$,.,,,,,,,,,,,,,,...,, 2207§34 SUBSCRIBED AND SWOR~ " ' 07 DAY OF 0CT,.19,$5 TO BEFORE ME THIS,,,...,.,,,,,.,,,,.,,,.,. NOTARY ,PUBhIC. OF! THE: STATE DF ALASKA G. N. NELSON PRESIDENT SOHIO ALASKA PETROLEUM COMPANY 900 EAST BENSON BOULEVARD ANCHORAGE, ALASKA TELEPHQN E (907) 564-5423 P.O. BOX 6612 ANCHORAGE, ALASKA 99502~612 September 25, 1985 C. V. Chatterton, Commissioner Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Re: Permanent Contingency Bank, Prudhoe Bay Field Conservation Order No. lzlS, Rule 15 Dear Commissioner Chatterton: Pursuant to my letter and our discussion of September 5, 1985, we hereby submit a proposed administrative approval for the establishment of a permanent contingency bank for the Prudhoe Oil Pool, Prudhoe Bay Field. This draft also incorporates some of those provisions previously contained in, and is intended to replace, your letter of November 12, 1982. We understand that you plan to give a ten day public notice of your proposed action. Please advise me if you would like additional information or would like to discuss this further. Sincerely, · N. Nelson President CNN/M3NJ:cl 26Z~0c Enclosure cc: PBU Working Interest Owners ADIVIINISTRATIVE APPROVAL NO. 145. Re: Permanent Contingency Bank Prudhoe 0il Pool, Prudhoe Bay Field As more fully described in the letter from Sohio Alaska Petroleum Company dated September 5, 1985, the Prudhoe Bay Unit Operators requested the Commission to consider and approve a proposal to establish a permanent Contingency Bank to achieve production flexibility for the Prudhoe Oil Pool, Prudhoe Bay Field, in accordance with the intent of Rule 15 of Conservation Order No. 145. This Contingency Bank would permit the Operators to build a buffer against unforeseen pipeline or major facility shutdowns during the period prior to field decline and would permit a smoothing of the field offtake rate. The Commission finds that this proposal conforms with the intent of Rule 15 of Conservation Order No. 145, will not affect ultimate recovery or create waste, and is consistent with prudent oil field operation and reservoir management. Pursuant to the authority provided in Rule 15 of Conservation Order No. 145, the Commission approves the following practi'ces which shall replace those approved in our letter dated November 12, 1982: 1. Effective immediately, the Operators of the Prudhoe Oil Pool may, insofar as the daily overlift rate does not exceed one hundred ten percent (110%)of the Annual Allowable Offtake rate, establish and carry-over a Contingency Bank. This bank shall be a cumulative overlift of oil production in excess of the Annual Allowable Offtake specified in the conservation order in effect which may be carried over to each subsequent year. Said Contingency Bank overlift need not be restored to zero during the following calendar year and shall be considered a permanent Contingency Bank. 2. In accordance with our letter of November 12, 1982, an Underlift Account may continue to be established relative to the zero bank level. Both the Underlift Account and the five million barrel permanent Contingency Bank may be restored during the following calendar year provided that the daily overlift rate for restoration and reestablishment does not exceed one hundred ten percent (110%) of the Annual Allowable Offtake rate. 3. Definitions A. Annual Allowable Offtake: The number of barrels of oil that can be produced in a calendar year as prescribed in the conservation order in effect (currently 1,500,000 bbls times the number of days in the calendar year). B. Contingency Bank: The cumulative overlift of oil production in excess of the Annual Allowable Offtake specified in the conservation order in effect~r~i~r E may be carried over to each subsequent year. The Contingencg~.l~d<E, v L L.' cannot exceed five million barrels. ,~taska Oit & Gas Cons. Commissi Anchorage C. Underlift Account: The volume of oil ar. the end of a calendar year determined by subtracting the actual calendar year production from the sum of the Annual Allowable Offtake and the production allowed to rectify the previous calendar year's Underlift Account. The Underlift Account cannot exceed one percent (1.0%) of the Annual Allowable Offtake. In addition to current production reporting requirements, the Operators of the Prudhoe Bay Field shall advise the Commission by letter within 3! days following the close of a calendar year as to the volume of any Contingency Bank or any Underlift Account that may exist. jhd/2640c RECEIVED AlasKa 0il & Gas Cor~s. 00~miss'io~ Anchora.~e G. N. NELSON PRESIDENT SOHIO ALASKA PETROLEUM COMPANY · L 900 EAST BENSON BOULEVARD ANCHORAGE, ALASKA TELEPHONE (907) 564-5423 P.O. BOX 6612 ANCHORAGE, ALASKA 99502-0612 September 5, 1985 C.V. Chatterton, Commissioner Alaska Oil & Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Re: Rule 15, Conservation Order No. 145 AOGCC Letter of November 12, 1982, to G.N. Nelson from C.V. Chatterton & H.W. Kuqler Dear Commissioner Chatterton: As Operator of the Western Operating Area of the Prudhoe Bay Unit and oil movements coordinator for the entire Prudhoe Bay Unit, we, in coordination with ARCO Alaska, Inc., Operator of the Eastern Operating Area of the Prudhoe Bay Unit, are writing this letter for your consideration and approval. The expanded intent of Rule 15 of Conservation Order No. 145 as handled administratively in the November 12, 1982, Alaska Oil and Gas Conservation Commission letter specified above, establishes the allowable overlift and underlift limitations over a calendar year for the Prudhoe Bay Unit. These limitations accommodate a maximum overlift account of 547,500 BBLS and a maximum underlift account of 5,475,000 BBLS. Currently, any overlift account must be restored to zero during the first quarter of the following year; any underlift may be restored to zero during the following calendar year. while these limitations have permitted sufficient production flexibility in the past, a major unforeseen production interruption in the near future could jeopardize the Unit's ability to maintain the 1,500,000 barrel per day average annual offtake rate while maximizing conservation of ultimate reserves. Since, under the current ruling, we are allowed daily offtake rates in excess of the annual average offtake rate to sustain this annual average rate, it seems inefficient to require us to zero the bank caused by these rates just to immediately begin building it again. If an unexpected major TAPS shutdown, or any other unexpected major facility shutdown, were to occur beyond 1985, it could be difficult to recover the deferred production during the allowable period without introducing the risk of compromising reservoir management goals. .~ 'kECE[VED Alaska 0il & Gas Oons. commissiotr Mr. C.V. Chatterton, Commissioner Alaska Oil & Gas Conservation Commission Page 2 The Operators of the Prudhoe Bay Unit request your approval to establish a permanent contingency bank not to exceed five million barrels (less than one percent of the annual allowable offtake) at the end of a calendar year. The contingency bank would likely be built during the last half of 1985 and would be used as a buffer against unforeseen production impacts during the years prior to decline. The buffer would permit a smoothing of the field offtake rate during non-shutdown periods by eliminating the past practice of cyclic building and depleting a temporary contingency bank to provide for unforeseen shutdowns during each calendar year. This bank will not jeopardize ultimate recovery as it will be developed within existing reservoir management strategies, and will provide operational flexibility to maintain the 1.5 MMBPD oil offtake rate during the period prior to decline. We believe this request to modify the banking provisions in your November 12, 1982, letter complies with the intent of Rule 15, Conservation Order No. 145 and does not constitute a change to existing regulations. We have attached a summary of production impacts due to past TAPS shutdowns to facilitate your understanding of the problem. (The TAPS shutdown summary was the basis for choosing a five million barrel contingency bank ceiling.) Please contact us if you require any additional information, or would like to meet with us further to discuss this request. Thank you for your consideration. Sincerely, President cl 2457c Enclosure cc: H.C. Heinze, ARCO Alaska, Inc. Mr. C.V. Chatterton, Commissioner Alaska Oil & Gas Conservation Commission Page 2 Attachment JUSTIFICATION OF PROPOSED CARRY-OVER BANK o Unforeseen TAPS Shutdowns Have the Largest Impact on Banking Plans o TAPS Historical Data Year Major TAPS Shutdowns* Duration Event 1979 53 Hrs 1984 57 Hrs 1985 86 Hrs Hole in Line Stuck Scraper Pig Line Subsidence (2 shutdowns) Average Downtime per Event - 65 Hours Average Deferred Production Per Event - -4.1 MMBBLS *Original TAPS startup related shutdowns not included Aiasi',:a Oil & Gas Co:s, Oomm:ssiofi Anchorage Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re: The application of SOHIO ALASKA PETROLEUM COMPANY in coor- dination with ARCO ALASKA, INC., operators of the Prudhoe Bay Unit, to overlift the 1985 annual allowable offtake from the Prudhoe Oil Pool, Prudhoe Bay Field to offset a future interruption in the allowable crude oil production resulting from a major facility shut-down event. The Alaska Oil and Gas Conservation Commission has been requested to issue an order permitting the operators of the Prudhoe Bay Unit to produce in 1985 a maximum of 5 million barrels of crude oil in excess of the allowable annual offtake set forth in Conservation Order No. 145 as a contingency account and to maintain the account in subsequent years for so long as practicable to offset any interruption of production in case of a future shut-down of the pipeline or a major facility in the Prudhoe Bay Field. Parties who may be aggrieved if the referenced order is issued are allowed 10 days from the date of this publication in which to file a protest in writing, stating in detail the nature of their aggrievement, and their request for a hearing. The place of filing is the Alaska Oil and Gas Conservation Commis- sion, 3001 Porcupine Drive, Anchorage, Alaska 99501. If such a protest is timely filed, a hearing on the matter will be held at the above address at 9:00 AM on October 17, 1985 at which time protestants and others may be heard. If no such protest is timely filed, the Commission will consider the issuance of the order without a hearing. Harry W. Kugler Commis s ioner Alaska Oil & Gas Conservation Commission Published: 10/05/85