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Home My WebLink AboutCO 363• • Index Conservation Order 363 1. 2. June 30, 1995 ARCO Alaska, Inc. Requesting to Revise Conservation Order 341, Rule 5 Prudhoe Oil Pool, Prudhoe Bay Field July 26, 1995 Proposal to Remove SSSVs from Prudhoe Bay Oil Pool July 28, 1995 Notice of Public Hearing, Affidavit of Publication Conservation Order 363 STATE OF ALASKA 01L AND GAS CONSERVATION COMMISSION 3001 Porcupine Drive Anchorage, Alaska 99501-3192 The Application of ARCO Alaska, ) Inc. and BP Exploration (Alaska) Inc. ) to eliminate the requirement for ) subsurface safety valves in wells drilled ) to the Pmdhoe Oil Pool. ) Conservation Order No. 363 Prudhoe Bay Field Prudhoe Bay Unit Pmdhoe Oil Pool September 29, 1995 IT APPEARING THAT: By letter dated June 30, 1995, ARCO Alaska, Inc. arid B.P Exploration (Alaska) Inc., as operators of the Prudhoe Bay Unit, requested a revision to Conservation Order 341, Rule 5, t¢, eliminate 'the requirement fbr subsurface safety valves in the Prudhoe Oil Pool, Prudhoe Bay Field. . Notice of opportunity for public hearing was published in the Anchorage Daily News on July 28, 1995. 3. The Co'tnrnission received no protest or request fc, r a hearing regarding the petition. FINDINGS: Commission :regulations, 20 AAC 25,265, require surface and subsurface safety valves CSSSV") only' in wells localed offshore that are capable of unassisted flow to the surface, but allows Commission discretion for requiring surface safety valves ("SSV") or SSSV's, or 'both, on 'wells in other areas. , When equipped with both valves, the SSSV provides redundant protection against accidental release of hydrocarbons from wells capable of unassisted flow to the surface. 3. Conservation Order 341,. Rule 5, requires both SSV's and SSSV's for all wells capable of unassisted flow to the surface hi.the Prudhoe Oil Pool, P. mdhoe Bay Field. , Conservation Order 34 il., i,3sued November 2, 1994, consolidated all previous conserYation orders and administrative orders issued by the commission for the Prudhoe Oil Pool. Conservation Order NI. _,,>3 { ..... Page 2 oeptember 29, 1995 . The Commission first required SSV's and SSSV's for all onshore wells in the Prudhoe Bay Field in Conservation Order 145, issued June 1, 1977. The average well rate at field startup in 1977 was 7000 bbl/day oil, with maximum rates as high as 27,000 bbl/day. 6. The majority of wells producing from the Prudhoe Oil Pool today use artificial lift. 7. Extensive activity and infrastructure exists today within the Prudhoe Bay Field and adjacent areas, whereas little or no infrastructure existed on the North Slope in 1977. 8. In 1977 casing setting techniques conformed to lower 48 practices and operators had little experience producing through permafrost or under Arctic conditions. 9. Operators today use cement formulated for permafrost conditions, appropriate casing grades, annular fluids to alleviate concerns for casing failure and enclosed well houses. 10. The Commission has no record of an SSSV being used in Alaska to prevent uncontrolled flow to the surface from an onshore well. 11. SSSV's contribute to higher operating costs for the state and operators. 12. SSSV's impede or prohibit some types of completions, and increase the difficulty and risk of conducting some downhole operations. 13. Commission requirements for automatic safety valve systems have evolved over time. CONCLUSIONS: SSSV's may reduce ultimate recovery by contributing to higher operating costs, and may increase the chance of an accidental release of hydrocarbons when conducting certain downhole operations. 2. SSSV's in onshore wells in Alaska have provided limited benefit to public safety, environmental protection or resource recovery. 3. Experience and new technology have reduced any danger to casing integrity from freeze-back or thaw subsidence effects within permafrost. . The probability of early detection and response to an accidental release of hydrocarbons is significantly greater today than in 1977 as a result of full field development and activity. Conservation Order N~,..,03 Page 3 ("~' 3eptember 29, 1995 . Eliminating the requirement for SSSV's in onshore Prudhoe Oil Pool wells will not likely contribute to waste and may contribute to safer well operations and greater ultimate recovery. . For wells equipped with artificial lift, the surface safety valve system should be capable of shutting down the lilt system if an over pressure of equipment could occur if the artificial lift systems were to remain functioning. 7. It is appropriate to amend Conservation Order 341, Rule 5, to conform with similar surface safety valve system requirements now i~nposed for other North Slope pools. NOW, THEREFORE, IT IS ORDERED THAT Rule 5 of C.O. of 341 is amended to read: Rule 5. Automatic Shut-hi Equipment ao Each well shall be equipped with a Commiss.~on approved fail-safe atttomatic surface safety valve system (SVS) capable of preventing uncontrolled flow by shutting off flow at the wellhead and shutting down any artificial lift system where an over pressure of equipment may occur. b. The safety valve system (SVS) shall not 'be deactivatcd e:xcept during repairs, while engaged in active well work, or if the pad is manned. If thc SVS cannot be returned to service within 24 hours, the well must be shut in at the 'well head and at the manifold ' building. 1. Wells with a deactivated SVS shall be identified 'by a sign on the wellhead stating that the SVS has been deactivated and the date it was deactivated. . A list of wells with the SVS deactivated, the dates and reasons for deactivating, and the estimated re-.activation dates must be maintained current and available for Commission inspection on request. C. A representative of the C. ommission will witness operation and. performance tests at intervals and times as prescribed by the Commission to confirm that the SVS is in proper working condition. d. The SVS must be maintained in working condition at all times unless the well is shut in and secured, or the well is being operated in conformance with other sections of this rule. e. Upon proper application or its own motion, the Commission may administratively waive or amend the requirements of this rule as long as the change does not promote Conservation Order N~0..,°3 {'""- Page 4 September 29, 1995 waste, jeopardize correlative rights or compromise ultimate recovery, and is based on sound engineering principles. Nothing in this rule precludes the installation of a SSSV in wells designated by the operator. If a SSSV is installed, it must be maintained in working order and is subject to performance testing as part of the SVS. IT IS FURTHER ORDERED THAT C.O. 341 be revised to reflect the change in Rule 5 and its rules reissued under C.O. 34 lA. DONE at Anchorage, Alaska and dated September 29, 1995. David W Johnston, Cha~a~ ~ Alaska Oil and Gas Conse~tion Commission Russell A. Douglass, Comr~ssioner Alaska Oil and Gas Conservation Commission AS 31.051080 provides that within 20 days after receipt of written notice of the entry of an order, a person affected by it may file with the Commission an application fix rehearing. A request for rehearing must be received by 4:30 PM on the 23rd day lbllowing the date of the order, or next working day ifa holiday or weekend, to be timely filed. The Commission shall grant or refuse the application in whole or in part within 10 days. The Commission can refuse an application by not acting on it within the 10-day period. An affected person has 30 days fi'om the date the Commission ret~ses the application or mails (or otherwise distributes) an order upon rehearing both being the final order of the Commission, to appeal the decision to Superior Court. Where a request for rehearing is denied by nonaction of the Cormnission, the 30 day period for appeal to Superior Court runs from the date on which the request is deemed denied (i.e., 10th day after the application for rehearing was filed). #10036 ~! STOF 0330 AFFIDAVIT $59.00 STATE OF ALASKA, ) THIRD JUDICIAL DiSTRiCT. ) ....... :~.V~..M .... Ka.~ann .............. being first duly sworn on oath deposes and says that he/she is an advertising representative of the Anchorage Daily News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on July 28r 1995 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. sig ned ~..-~-~'~, '~ ~ u scribed and sworn Lu u~fore me this ..;~. day of ~~, ...... Nora~ Public in and the S~te o[ Alas~. Anchorage, Alaska ........ ............. OF PUBLiCATiON CLIP - Notice of Public Hearing , STATE OF ALASKA t.,, and GaS Conservation , Oil ~ C. ommission .Re:. The amHleotion of ARCO, Alaska, Inc. and BP Exploro. tiorl (Alaska), Inc.. to amend Rule.".5 'of 'Conservation Order /ExPloration (Alaska) Inc,' by l'letter dated' June 30, 1995 have r~q0bsted an amendment to /Rble:',s of Conservation Order /341,'; ','The. amendment would ~.elim dote 'the. sUbsurface safety 'valVe. requirement in the Prud- kh:oe'~Oil''~ Pool; Prudhoe Bay 'Field~',:",Ond r~e~uire surface ~afe'. ~ty, v, alves,only ,on, we Is capable .~f:.,:~ paS$isted,f ow of hydrocar. b~m ,.',' ',' ', ,, ', , , ~eriO~ ~1~0 h~'av be harmed ,if;ti 'i,,!requested order s ~sued, ",~q,' 'fil'e]..,a written Protest pr or ' me,/ ,'[aS'KO 0 ~ and Gos Con ,~,',' , ,, ser- yatl t,.Comm~ssi,on (her'e nafter t'h,ei~ ;omrniss on) 3001 PorCu-, P'i"ffe Drive, Anchorage 'Alaska [~iO ,,,!:an'~ request ~ he'ring on .~. ..... . . · _.,., . ,.,..,, .... , , :. ,, ..:.'.:::-~!;! ;-; , ,, :, .. ,... .~, ,,: .. ;: ": .... :, -. ., ' '.,:,C'-.'u .=.:: '..7 ':' :-'.; , -, · · ,.o ,,: r": - :: ........... . .:. , ....... ,', ~ '% :- % : ..... , ' ;,.., ,,., i~,.-',~,~:,,,l,s,, ;,,=a,. me Commission i~ll~l;CO,q$[~er the ssuance of the ~,~t~:~,i~ :fhbot' "'O '.:h~drln'{~, J,"J">!iJ!f~'"~du"dre' a person 'w, ith a J,'dl,~a'BJ, lj;t'~i:Who may need a 'spe [(:[,dl,',:,,~,hlo'~ff~cahon in 'order to I'~r~l'~-.~,~;','~'~,~..~.. , ,, L. , · .':,, .' .L .... '': ' '.~'PUDliC · ': :' Diana =' ':' '"' .' "'""';' ' ,'.~r' than,, - ..'... ~ .~' ,.. , , IP:u_a,!: JULY" 28,~ 1995 '.' Notice of Public Hearing STATE OF ALASKA Alaska Oil and Gas Conservation Commission Re~ The application of ARCO Alaska, Inc. and BP Exploration (Alaska) Inc. to amend Rule 5 of Conservation Order 341. ARCO Alaska, Inc. and BP Exploration (Alaska) Inc. by letter dated June 30, 1995 have requested an amendment to Rule 5 of Conservation Order 341. The amendment would eliminate the subsurface safety valve requirement in the Prudhoe Oil Pool, Prudhoe Bay Field, and require surface safety valves only on wells capable of unassisted flow of hydrocarbons. A person who may be harmed if the requested order is issued may file a written protest prior to 4:00 p.m. August 14, 1995 with the Alaska Oil and Gas Conservation Commission (hereinafter the Commission), 3001. Porcupine Drive, Anchorage, Alaska 99501, and request a hearing on the matter. If the protest is timely filed and raises a substantial and material issue crucial to the Commission's determination, a hearing on the matter will be held at the above address at 9:00 a.m. on August 29, 1995 in conformance with 20 AAC 25.540. If a hearing is to be held, interested parties may confirm this by calling the Commission's office, (907) 279-1433 after August 14, 1995. If no protest is filed, the Commission will consider the issuance of the order without a hearing. If you are a person with a disability who may need a special modification in order to comment or to attend the public hearing, please contact Diana Fleck at 279-1433 no later than August 24, 1995. Published July 28, 1995 Russell A. Douglass Commissioner MEMORANDUM Alaska Oil and Gas Conservation Commission To: David Johnston Fm: Blair Wondzell ~'fez[~r- State of Alaska Date: 26July95 File: Sub: a-sssvpb Proposal to Remove SSSVs from Prudhoe Bay Oil Pool By letter to you dated June 30, 1995, the Prudhoe Bay operators propose the removal of SSSVs from all Prudhoe Bay Oil Pool wells. You asked me to review and provide comments on that proposal - my comments are listed below. The Kuparuk Experience This is similar to Arco's request for the Kuparuk Oil Pool. After the Commission granted that request, Arco decided to maintain the SSSVs in the gas injection wells and in their high producing oil and gas wells. In a March 9, 1995 meeting with Arco they described the production/injection characteristic of the wells in which they would maintain the SSSVs, this criteria is as follows: Category 1: Wells in the gas storage area; wells near production facilities and living quarters; and other wells have production rates greater than 5000 BLPD or unlitied gas rates greater than 6000 MSCFPD. SSSVs must be maintained in these wells. Category II: Wells with production rates greater than 1500 BLPD but less than 5000 BLPD and gas rates less than 6000 MSCFPD. SSSVs are required in these wells unless the Production Manager determines removal does not compromise personnel safety or the environment. Category III: Well which are not included in Category I or II and have unliiied rates less than 1500 BLPD and gas rates less than 60000 MSCFPD. SSSVs need not be maintained in these wells. At the meeting you said we would review the situation in one year to determine if we should make a change in our Conservation Orders. Further, you asked me to get with Arco to see if maintaining the SSSVs in Category I and II wells is cost beneficial. In order to determine the cost benefit, I asked Arco to determine the cost of an insurance policy to provide liability coverage in lieu of the protection provided by the SSSVs they planned to maintain. The Prudhoe Bay Recommendations Based on the Kuparuk experience, we recommend that the Prudhoe Bay Oil Pool operators be required to keep the SSSVs in the gas injection wells and be allowed to remove the SSSVs from the Iow volume hydrocarbon production wells in the Prudhoe Bay Oil Pool. The correct "Iow volume" criteria is not easily determined. Jack interrogated his data base for years 1993, 94 & 95; the 1995 data is used in the data below because it is the most recent and therefore probably the most relevant. (YTD 95 there are 931 producing wells in the Prudhoe Bay Oil Pool). Parameter .No. without SSSVS Wells with SSSVS If producing less than 500 BOPD - - 199 wells are excluded. 732 retain SSSVs If producing less than 1000 BOPD - - 500 wells are excluded. 431 retain SSSVs If producing less than 1500 BLPD - - 393 wells are excluded. 538 retain SSSVs If producing over 50% water cut - -397 wells are excluded. 534 retain SSSVs If producing less than 6000 MCFPD -493 wells are excluded. 438 retain SSSVs Low volume could be described by making less than 500 BOPD litted or less than 6000 MCFPD gas. ARCO Alaska, Inc. '~, Post Office Box 100350 Anchorage, Alaska 99510-0350 Telephone 907 276 12!5 June 30, 1995 Mr. David W. Johnston, Chairman Alaska Oil and Gas Conservation Commission 3001 Porcupine Drive Anchorage, Alaska 99501 Re' Request to Revise Conservation Order 341, Rule 5 Prudhoe Oil Pool, Prudhoe Bay Field Dear Mr. Johnston: ARCO Alaska, Inc., and BP Exploration, Alaska, Inc., Operators of the Prudhoe Bay Unit, request the Commission revise the requirements of Conservation Order 341, Rule 5, Automatic Shut-in Equipment, for the Prudhoe Oil Pool. We .request a change to this rule to eliminate the requirement to equip each well with a subsurface safety valve. Under this proposal, Prudhoe Oil Pool wells will continue to be equipped with surface safety valves to prevent uncontrolled flow. This change will allow more efficient operation of the field while maintaining a safe operation. This letter is divided into three main sections covering SSSV background information, our proposal for this modification, and the justification for this action. ,,B,, A, CKG ROUND The pool rules (Conservation Order No. 341) for the Prudhoe Oil Pool, Prudhoe Bay Field, require each well be equipped with both surface and subsurface safety valves capable of preventing the uncontrolled flow of hydrocarbons. Conservation Order 341 was issued on November 2, 1994 as a consolidation of all earlier conservation orders, administrative approvals and letter approvals. Its record includes the hearing records of the previous Prudhoe Oil Pool Conservation Orders which required SSSVs. While some details have changed over time, the requirement for subsurface safety valves has been in effect essentially since the discovery of the Prudhoe Bay Field. The subsurface safety valve requirements in North Slope fields were originally requested by ARCO and BPX based on the Iow level of experience with arctic production operations. After many years of safe operations these concerns no longer exist. ARCO and BPX have gained substantial arctic operating experience and the Prudhoe Bay Unit now possesses an extensive infrastructure,:operated by a highly skilled work force. JUL 13 1 95 Aiasb Oil & Gas Cons. Commission Anchors..? AR3B-6003-93 242-2603 Request to revise(0_,.'. ,servation Order 341, Rule 5 Prudhoe Oil Pool, Prudhoe Bay Field Page 2 One of the main concerns during the early years of arctic operation was the potential freeze back of the permafrost. Subsurface valves were installed to protect against the risk of loss of well control due to casing collapse during freeze back. The uncertainty relating to this risk, however, was eliminated with a better understanding of the thaw - freeze back forces generated within the permafrost and improved design of casing strings and cement capable of withstanding these forces. Over eighteen years of production operations in the Prudhoe Bay Unit have clearly demonstrated that this is no longer an area for concern. In the Lower 48, as in Alaska, subsurface safety valves are installed in offshore applications where wells and platforms are at risk due to hurricanes, ocean going ships, and subsea mud slides. The use of subsurface safety valves in onshore wells in the Lower 48 is very rare and generally restricted to wells with extremely high levels of hydrogen sulfide, located in heavily populated urban areas. Consistent with the industry's practice in the Lower 48, the use of subsurface safety valves is now not required in any of the onshore fields in Alaska outside of the Prudhoe Bay Field. PROPOSAL ARCO and BPX propose that Conservation Order 341, Rule 5 be revised to eliminate the subsurface safety valve requirement for all wells in the Prudhoe Oil Pool. The pilot actuated surface safety valves will continue to be used and are capable of automatically closing to prevent an uncontrolled flow. These surface safety valves will be tested as required by the AOGCC. For clarity, a copy of Rule 5 is included in Attachment 1 with the paragraphs referencing SSSVs underlined. It is proposed that these references to SSSVs be removed and the Rule 5 be restructured as shown in Attachment 2. (References to "Low Pressure Sensor (LPS) system" in the current order were updated to "Safety Valve System (SVS)" to conform to recent AOGCC Conservation Orders and Policies). Removing the requirement for subsurface valves in the Prudhoe Bay Oil Pool is consistent with the Commission's statewide regulation, 20 AAC 25.265, which requires subsurface valves only for offshore wells. JUSTIFICATION SSSVs provide only a redundant level of protection to the SSV. The risks which were thought to justify the extra protection provided by SSSVs have proven to be either absent or extremely unlikely in Prudhoe Bay Oil Pool wells. In fact, subsurface valves actually create a small element of risk, as hundreds of downhole well operations are performed each year just to service and maintain existing valves. In addition, the requirement for subsurface valves m.,.a...Y¢ ,preclude or hinder the development and jt.j1 , o 1995 Alaska ut, ~ Gas Cons. Commlsslon Anchor~,.~? ¢.,. Request to revise ¢__,'-.,servation Order 341 Prudhoe Oil Pool, Prudhoe Bay Field Page 3 , Rule 5 application of various alternate completion techniques being studied to extend the life of the Prudhoe Bay Field. It should be noted that ARCO and BPX are not asking for a waiver of a statewide rule as 20 AAC 25.265(b) does not require either a surface or subsurface safety valve for onshore wells. Our proposal will continue to exceed the requirements of the statewide rules by continuing to install and maintain surface safety valves. This revision will improve the efficiency of operations in the Prudhoe Bay Oil Pool. In fact, there will be no immediate effort to remove SSSVs from all Prudhoe Bay Oil Pool wells. Instead this revision will provide the flexibility to reduce maintenance costs and the option to not replace specific valves upon failure. For wells in certain services, such as the gas injection wells, SSSVs may continue to be rerun at the discretion of the operators. In addition, development costs will be reduced by not installing this equipment in every new well or during each workover. This revision conforms with prudent oil field management and will not adversely affect ultimate recovery. Please contact either of us if you have any questions, or need more information. Our phone numbers are 263-4248 and 564-4757 for the ARCO and BP X contacts respectively. Sincerely, D. F. Scheve Technical Advisor Prudhoe Bay Resource Development ARCO Alaska Inc. Attachments: (2) C. J. Phillips Manager Waterflood Prudhoe Bay Resource Management BP Exploration (Alaska)Inc. ';.JL ~ :3 1995 Gas Cons. Anchora;~ ' Attachment 1 Current Conservation Order 341, Rule 5. (Emphasis Added) Rule 5 Automatic Shut-in Equipment (ref. C.O. 341) (a) Upon completion, each well shall be equipped with' , a fail-safe automatic surface safety valve (SSV) capable of preventing uncontrolled flow. . a fail-safe automatic subsurface safety valve (SSSV~. unless other types of subsurface valve are approved by the Commission, installed in the tubing string below the base of permafrost and capable of preventing uncontrolled flow. .(b) A well that is not capable of unassisted flow of hydrocarbons, as ..d.etermined by a "no flow" performance test witnessed by a ...Corn.mission representative, is not reauired to have a fail-safe automatic SSSV. Lc) Subsurface safety valves may be temporarily removed for not more than 30 days as part of routine well operations or repair without specific notice to, or authorization by the Commission. . Written notification will be required for those wells that will have SSSV's removed longer than the 30 day period. . Wells with SSSV's removed shall be identified by a clearly .vi.sib!e.sign .or tag on the wellhead stating that the valve has been rem0.v.ed, reason for removal and the date of removal. . A list of wells with SSSV's removed, removal dates, reasons for removal, and estimated reinstallation dates must be maintained current and available for Commission inspection (d) on request. The Low Pressure Sensor (LPS) systems shall not be deactivated except during repairs to the LPS, while engaged in active well work or well operations. During times when the LPS is deactivated, the pad must be manned at all times or the well shut-in at the wellhead and manifold building. Repairs to the LPS must be completed within 24 hours or the well must be shut-in at the wellhead and manifold building. RECEIVED L 1 ;5 1995 Gas Cons. (e) (f) (g) . Wells with a deactivated LPS shall be identified by a clearly visible sign or tag on the safety valve control panel stating the date the LPS was deactivated. . A list of wells with the LPS deactivated, the dates and reasons for deactivating, and the estimated re-activation dates must be maintained current and available for Commission inspection on request. The safety valve systems must be maintained in working condition at all times unless the well is shut in and secured, or the well is being operated in conformance with other sections of this rule. Upon proper application or its own motion, the Commission may administratively waive or amend the requirements of this rule as long as the change does not promote waste, jeopardize correlative rights or compromise ultimate recovery, and is based on sound engineering principles. A representative of the Commission will witness performance tests as prescribed by the Commission to confirm that the SSV, SSSV and all associated equipment are in proper working condition. Attachment 2 Proposed Revised Conservation Order 341, Rule 5. Rule 5 Automatic Shut-in Equipment ao Each well shall be equipped with an automatic surface safety valve system (SVS) capable of preventing uncontrolled flow by shutting off flow at the wellhead. b. The safety valve system (SVS) shall not be deactivated except during repairs, while engaged in active well work, or if the pad is manned. If the SVS cannot be returned to service within 24 hours, the well must be shut in at the well and at the manifold building. I , Wells with a deactivated SVS shall be identified by a sign on the well head stating that the SVS has been deactivated and the date it was deactivated. 2~ A list of wells with the SVS deactivated, the dates and reasons for deactivating, and the estimated re-activation dates must be maintained current and available for commission inspection on request. C. A representative of the commission will witness operation and performance tests at intervals and times as prescribed by the Commission to confirm that the SVS is in proper working condition. d, Upon proper application or its own motion, the Commission may administratively waive or amend the requirements of this rule as long as the change does not promote waste, jeopardize correlative rights or compromise ultimate recovery, and is based on sound engineering principles. RECEIVED JUL 1 ~ 1995 A~sV,~ U~ & Gas CoDs. C0mnlissiO CC: Bose, D. W. Broadribb, M. Davis, M. R. Dayton, J. D. Gurule/Johnson Gray, T. Inglis, A. J. Kerr, S. I. Lemon, R. M. Lang, K. W. Mayson, H. J. Manzoni/Replogle Phillips, G. K. Puckett, D. L. Putnam/Szabo Shoemake/Smart Weeks, J. W. Woodward, D. K. Worcester, M. P. ATO-1670 MB 8-4 MB 13-5 ATO-2084 PRB-10 NS Milne Point MB 7-3 ATO-1220 PRB-20 MB 9-3 MB 4-1 PB F-1 ATO-496 ATO-1226 PB C-1 PRB-20 ATO-2100 MB 13-2 ATO-2090 File F P KRU SSSV ( RISK MANAGEMENT CRITERIA SUMMARY RECEIVED MAR -9 1995 Alaska 0il & Gas Cons. C0mmissi0n Purpose Anch0ra~e The purpose of this Summary is to communicate the basic criteria that has been incorporated in the Kuparuk SSSV Implementation Plan. The Plan is the field personnel's guiding policy for the future maintenance of the existing SSSV's in the Kuparuk River Unit. Also addressed are the SSSV requirements for workovers and new completions along with a general outline for an initial safety assessment and an annual plan review. SSSV Criteria Category I: The following wells in the Kuparuk River Unit will be designated as Category I wells and will have a working SSSV. The SSSV will continue to be tested and maintained in accordance to the AOGCC Regulations in place prior to December 16, 1994. a.) Gas storage area: Currently DS's 1C and 1D. Note: When these drill sites are no longer used for gas storage these wells will be treated the same as other wells. It is anticipated that for a period of time during blow down of the present gas storage area that SSSV's will need to be maintained until a substantial portion of the gas is removed. b.) Immediate proximity to major production facility and living facilities: DS 1 B. At this time this includes only the producers at DS 1B since all of the injection wells are water injectors. However, it is the intent of the Plan that IWAG / MWAG injectors at those DS's which meet the criteria of this paragraph will be protected with SSSV's. c.) Other Wells Requiring SSSV's: i.) All producing wells with unlifted liquid production rates in excess of 5,000 BLPD or unlifted gas rates greater than 6,000 MSCFD (Note: 5,000 BLPD represents 5% of the Total Spill Containment Capacity as Published in the Kuparuk River Unit Spill Plans). ii.) Any other well, at the discretion of the Production Manager, in which it is determined that a SSSV is required for safe operation of the well. Note: SSSV's testing in the above determined Drill Sites and Wells will be at the same frequency and to the same standards as those set forth to meet the AOGCC requirements prior to December 16, 1994. Similarly, and consistent with the former AOGCC policy, there is a 14 day grace period to repair a valve which failed to test before the well must be shut-in. : SSS~" {ITERIA SUMMARY March 9, 1995 page 2 II.) Category I1: Category II wells in(~'lude those producing wells not included in Category I that have an unlifted liquid production rates greater than 1,500 BLPD but less than 5,000 BLPD and gas production rates less than 6,000 MSCFD. Category II wells are required to have a SSSV unless, in the judgment of the Production Manager, removal of the SSSV does not compromise personnel safety or the environment. Any action to permanently remove or disable a SSSV in these wells requires an exemption which can only be approved by the Production Manager (with prior approval of the Production Superintendent). This approval can only be made after considering: the type of service, corrosion conditions, the total liquid rate, oil rate, gas rate, GLR, proximity to gas storage area, reservoir pressure, wells location to facilities, work required to re-instate the SSSV, and any other factors which might effect the safe operation of the well. · During the first 12 months following the initial execution of the Implementation Plan all of the Category II wells will be decisioned by the Production Manager as to their respective SSSV requirement. Those wells which are granted an exemption and are approved for operation without SSSV's will require no further testing or maintenance. Conversely, the wells that the Production Manager does not approve an exemption of the SSSV requirement will continue to be tested and maintained in accordance to the AOGCC Regulations in place prior to December 16, 1994, Category i11: Category III include all wells which are not included in Category I or II and have unlifted production rates less than 1,500 BLPD and gas production rates less than 6000 MSCFD. It is not required that the SSSV be maintained or tested in Category III wells. The Drillsite Supervisor has the authority to approve an existing SSSV be removed or disabled if it is a chronic problem, restricts the well's production /injection rate or accessibility, etc. If in his or her judgment removal or disabling of the SSSV compromises personnel safety or the environment the SSSV should not be removed or disabled and specific guidelines will be developed for the well. RECEIVED MAR -9 1995 Alaska Oil & Gas Cons. Commimdon Anchorage sss {ITERIA SUMMARY March 9, 1995 page 3 IV.) New completions: All new completions will be assigned to a SSSV Category based on their predrill/workover rate estimates. All Category I wells will have a SSSV included in their completion design. Category II wells will have a SSSV included unless an exemption is granted by the Production Manager. Category III completions will not be required to have a SSSV. All completions which do not have a SSSV will have a profile at 500'+ for setting a safety device if needed at a later date. This does not include new completions at those drill sites which are identified as Category I wells as stated in Section I parts a) and b) above. Those wells will be completed with a SSSV as required. When initial stabilized production rates are available from the new completions the Drillsite Supervisor will vedfy that the well was assigned to the proper SSSV Category. No action is required for wells which produce at or below the maximum rate criteria for the pre completion SSSV Category. If any well exceeds the maximum rate criteria for the pre completion SSSV Category, the Drillsite Supervisor is required to take the necessary action to get the well in compliance with the SSSV Implementation Plan within 60 days. RECEIVED MAR -9 1995 Alaska 0ii & Gas Cons. Commission Anchorage (' SSS~:'"" .{ITERIA SUMMARY March 9, 1995 page 4 Implementation Plan A Field SSSV removal plan will be implemented to address the following: · Plan Execution Spill Plan Updates. Revise Ddll Site Operating Practices. Maximize the utilization of existing SSSV's as much as possible. Determination of wells which require operational SSSV's. · communication and SSSV status identification Testing and Documentation Requirements for SSSV removal. Wellbore schematics. Wellhouse Signs. · Testing / Maintenance Maximize reliability of the SSV's. Continued testing of the required SSSV's. · Tracking and Plan Evaluation Assess risk of Plan. Program Review: I) Initial Plan Assessment: An Initial Plan Assessment will be conducted by the AAI HS&E Department commencing six months after initial execution of the Plan. This assessment will, at a minimum, evaluate and report to management on the following: Plan Compliance Plan Deficiencies Requirement for Future HS&E Assessments RECEIVED MAR -9 1995 Alaska Oil & Gas Cons. Commission Anchorage (" sss , {ITERIA SUMMARY March 9, 1995 page 5 ii) Annual Review: An Annual Program.Review will be performed one year after initial execution of the Implementation Plan. The review, at a minimum, will include: Category I wells A full field review will be completed to ensure that all of the wells which meet the' criteria set forth for Category I have a functioning SSSV which has been tested within the preceding six months. Category II wells All wells will be reviewed to ensure they still meets the criteria for Category II. If a well has moved into Category I action will be taken to ensure the well has a functioning and tested SSSV device. For those wells with functioning SSSV's still in place the date of the last SSSV test will be determined and an evaluation of the testing requirements for these wells will be undertaken. Category III wells A review will be made of those Category ill wells which have had the SSSV removed or disabled to ensure that the well still meets the specifications for the Category. If a well has moved into Category II, the proper approval level must be acquired for continued operation of the well without a SSSV. If a well now meets the criteria set for Category I, it then must have the SSSV put back in service or an alternate SSSV device installed. New Wells All new wells drilled and completed dudng the prior year will be reviewed to determine if they have been included in the proper CategorY. General Plan Review All aspects of the Implementation Plan will be reviewed and a determination of recommended changes will be made. This review will include, at a minimum, an assessment of the criteria for Categories I, II and III, a review of the wells without operable SSSV's and their current production rate potential, and a reexamination of the testing requirement for'SSSV's in Category II and III wells. RECEIVEI) MAR -9 ~995 Alaska Oil & Gas Cons. Commission Anchorage KRU SSSV {r. RISK MANAGEMENT CRITERIA SUMMARY RECEIVED MAR - 9 199,5 Purpose Alask~ 0il & Gas Cons. C0mmlssi0n Anch0raf~e The purpose of this Summary is to communicate the basic criteria that has been incorporated in the Kuparuk SSSV Implementation Plan. The Plan is the field personnel's guiding policy for the future maintenance of the existing SSSV's in the Kuparuk River Unit. Also addressed are the SSSV requirements for workovers and new completions along with a general outline for an initial safety assessment and an annual plan review. SSSV Criteria Category I: The following wells in the Kuparuk River Unit will be designated as Category I wells and will have a working SSSV. The SSSV will continue to be tested and maintained in accordance to the AOGCC Regulations in place prior to December 16, 1994. a.) Gas storage area: Currently DS's 1C and 1D. Note: When these drill sites are no longer used for gas storage these wells will be treated the same as other wells. It is anticipated that for a period of time during blow down of the present gas storage area that SSSV's will need to be maintained until a substantial portion of the gas is removed. b.) Immediate proximity to major production facility and living facilities: DS 1B.' At this time this includes only the producers at DS 1B since all of the injection wells are water injectors. However, it is the intent of the Plan that IWAG / MWAG injectors at those DS's which meet the criteria of this paragraph will be protected with SSSV's. c.) Other Wells Requiring SSSV's: i.) All producing wells with unlifted liquid production rates in excess of 5,000 BLPD or unlifted gas rates greater than 6,000 MSCFD (Note: 5,000 BLPD represents 5% of the Total Spill Containment Capacity as Published in the Kuparuk River Unit Spill Plans). ii.) Any other well, at the discretion, of the Production Manager, in which it is determined that a SSSV is required for safe operation of the well. Note: SSSV's testing in the above determined Drill Sites and Wells will be at the same' frequency and to the same standards as those set forth to meet the AOGCC requirements prior to December 16, 1994. Similarly, and consistent with the former AOGCC policy, there is a 14 day grace period to repair a valve which failed to test before the well must be shut-in. sss {ITERIA SUMMARY March 9, 1995 page 2 II.) Category !1: Category II wells in(~lude those producing wells not included in Category I that have an unlifted liquid production rates greater than 1,500 BLPD but less than 5,000 BLPD and gas production rates less than 6,000 MSCFD. Category II wells are required to have a SSSV unless, in the judgment of the Production Manager, removal of the SSSV does not compromise personnel safety or the environment. Any action to permanently remove or disable a SSSV in these wells requires an exemption which can only be approved by the Production Manager (with pdor approval of the Production Superintendent). This approval can only be made after considering: the type of service, corrosion conditions, the total liquid rate, oil rate, gas rate, GLR, proximity to gas storage area, reservoir pressure, wells location to facilities, work required to re-instate the SSSV, and any other factors which might effect the safe operation of the well. During the first 12 months following the initial execution of the Implementation Plan all of the Category II wells will be decisioned by the Production Manager as to their respective SSSV requirement. Those wells which are granted an exemption and are approved for operation without SSSV's will require no further testing or maintenance. Conversely, the wells that the Production Manager does not approve an exemption of the SSSV requirement will continue to be tested and maintained in accordance to the AOGCC Regulations in place prior to December 16, 1994. Category i11: Category III include all wells which are not included in Category I or II and have unlifted production rates less than 1,500 BLPD and gas production rates less than 6000 MSOFD. It is not required that the SSSV be maintained or tested in Category III wells. The Driilsite Supervisor has the authority to approve an existing SSSV be removed or disabled if it is a chronic problem, restricts the well's production /injection rate or accessibility, etc. If in his or her judgment removal or disabling of the SSSV compromises personnel safety or the environment the SSSV should not be removed or disabled and specific guidelines will be developed for the well. RECEIVED MAR -9 1995 Alaska Oil & 6as Cons. Commi~ion Anchorage sssl AITERIA SUMMARY March 9, 1995 page 3 IV.) New completions: .' All new completions will be assigned to a SSSV Category based on their predrill/workover rate estimates. All Category ! wells will have a SSSV included in their completion design. Category II wells will have a SSSV included unless an exemption is granted by the Production Manager. Category III completions will not be required to have a SSSV. All completions which do not have a SSSV will have a profile at 500'___ for setting a safety device if needed at a later date. This does not include new completions at those drill sites which are identified as Category I wells as stated in Section I parts a) and b) above. Those wells will be completed with a SSSV as required. When initial stabilized production rates are available from the new completions the Drillsite Supervisor will verify that the well was assigned to the proper SSSV Category. No action is required for wells which produce at or below the maximum rate criteria for the pre completion SSSV Category. If any well exceeds the maximum rate criteria for the pre completion SSSV Category, the Driilsite Supervisor is required to take the necessary action to get the well in compliance with the SSSV Implementation Plan within 60 days. REEEIVED MAR -9 1995 Alaska Oil & Gas Cons. Commission Anchorage {ITERIA SUMMARY March 9, 1995 page 4 Implementation Plan A Field SSSV removal plan will be implemented to address the following: · Plan Execution Spill Plan Updates. Revise Drill Site Operating Practices. Maximize the utilization of existing SSSV's as much as possible. Determination of wells which require operational SSSV's. · communication and SSSV status identification Testing and Documentation Requirements for SSSV removal. Wellbore schematics. Wellhouse Signs. · Testing / Maintenance Maximize reliability of the SSV's. ·" Continued testing of the required SSSV's. · Tracking and Plan Evaluation Assess risk of Plan. Program Review: I) Initial Plan Assessment: An Initial Plan Assessment will be conducted by the AAI HS&E Department commencing siX months after initial execution of the Plan. This assessment will, at a minimum, evaluate and report to management on the following: Plan Compliance Plan Deficiencies Requirement for Future HS&E Assessments RECEIVED MAR -9 1995 Alaska Oil & Gas Cons. Commission Anchorage SSS~" {ITERIA SUMMARY March 9, 1995 page 5 il) Annual Review: An Annual Program.Review will be performed one year after initial execution of the Implementation Plan. The review, at a minimum, will include: Category I wells A full field review will be completed to ensure that all of the wells which meet the criteria set forth for Category i have a functioning SSSV which has been tested within the preceding six months. Category II wells All wells will be reviewed to ensure they still meets the criteria for Category II. If a well has moved into Category I action will be taken to ensure the well has a functioning and tested SSSV device. For those wells with functioning SSSV's still in place the date of the last SSSV test will be determined and an evaluation of the testing requirements for these wells will be undertaken. Category III wells A review will be made of those Category III wells which have had the SSSV removed or disabled to ensure that the well still meets the specifications for the Category. If a well has moved into Category II, the proper approval level must be acquired for continued operation of the well without a SSSV. If a well now meets the criteria set for Category I, it then must have the SSSV put back in service or an alternate SSSV device installed. New Wells All new wells drilled and completed during the prior year will be reviewed to determine if they have been included in the proper CategorY. General Plan Review All aspects of the Implementation Plan will be reviewed and a determination of recommended changes will be made. This review will include, at a minimum, an assessment of the criteria for Categories I, II and III, a review of the wells without operable SSSV's and their current production rate potential, and a reexamination of the testing requirement for SSSV's in Category II and III wells. REEEIVED MAR -9 1995 0il & Gas Cons. Commission Anchorage