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Home My WebLink AboutO 124OTHER ORDER 124 Eni us Operating co., Inc. Docket Number: OTH-17-001 L March 22, 2017 Notice of Enforcement Action Late MIT's 2. April 3, 2017 Eni Request for Informal Review 3. March 31, 2017 Scheduling Letter of Informal Review 4. April 11, 2017 Eni's written submission for Informal Review 5. August 17, 2017 Eni check copy for penalty payment Internal Documents held in Secure Storage ORDERS STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Test Eleven Injection Wells for ) Docket Number: OTH-17-001 Tubing/Casing Annulus Mechanical Integrity at ) Other Order 124 Nikaitchuq Unit. ) July 26, 2017 DECISION AND ORDER On March 22, 2017 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Eni US Operating Company Inc. (Eni) regarding late mechanical integrity tests. The Notice was based upon Eni's performance of well operations at its Nikaitchuq Unit after failing to test injection wells for mechanical integrity as required by regulation. The Notice proposed specific corrective actions and a $110,000 civil penalty under AS 31.05.150(a). Eni requested an informal review. That review was held April 13, 2017. Summary of Proposed Enforcement Action: A review of injection well activities performed at Nikaitchuq by Eni revealed eleven (11) wells were not tested for mechanical integrity after the initial tests at injection startup, a violation of Area Injection Order 36. After gathering information and further discussions with Eni, AOGCC proposed a $110,000 civil penalty. Informal Review: Eni met with AOGCC on April 13, 2017 to present the results of its internal review. Eni's presentation outlined the summary of events, the root cause for missing the mechanical integrity test deadlines, and solutions in response to the proposed enforcement. Eni did not dispute the violation alleged in the Notice. Instead, Eni referenced confusion about ownership of the mechanical integrity testing responsibilities within its drilling and production groups as a contributing factor in the missed tests. Eni questioned the penalty amount during the review, Other Order 124 July 26, 2017 Page 2 of 4 suggesting it be reduced based on actions taken by Eni and what it characterized as a successful history of delivering a "high degree of regulatory compliance." Discussion: In its Informal Review presentation materials, Eni conceded it was aware in October 2016 that eleven injection wells at Nikaitchuq were past due for mechanical integrity testing. Eni alleges it began the process to complete the required tests at that time, yet the injection wells that were past due for mechanical integrity tests were not tested until December 9-10, 2016. Table 1. Mechanical integrity tests for the eleven injection wells were due beginning in April 2016. From April 1 through December 1, 2016, an AOGCC Inspector was at Nikaitchuq to witness safety valve system tests, meter inspections or blowout prevention equipment tests on six separate occasions. AOGCC was not notified the injection well mechanical integrity tests were late nor did Eni request additional time to complete the tests. Eni's ineffective tracking of and accountability for regulatory actions has been previously identified as a deficiency. A notice of violation was issued to Eni for failure to comply with the required actions noted in a deficiency report. Prior to that, AOGCC identified a missed reservoir surveillance report required by Conservation Order 639. Eni also failed to submit the required annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool each report year 2012 through 2015.1 Findings and Conclusions: Eni has violated Area Injection Order 36 during the operation of injection wells at Nikaitchuq by failing to perform required mechanical integrity tests on eleven wells. The factors in AS 31.05.150(g) have been considered in the determination of penalties for the Nikaitchuq violations.2 Eni failed to act in good faith because it knew the wells were out of compliance and failed to notify Production commenced in 2011; reservoir surveillance reports are due April 1 for the previous operating calendar year. AOGCC issued a Notice of Proposed Enforcement on June 30, 2016. The Decision and Order — Other Order 119 — was issued on May 5, 2017. 1 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 124 July 26, 2017 Page 3 of 4 the AOGCC. The passing tests on each of the eleven Nikaitchuq injection wells, witnessed by AOGCC on December 9-10, 2016, have mitigated the penalty imposed. AOGCC is imposing only a single $10,000 civil penalty for each well. No additional mitigations to the penalty are being applied. Now Therefore It Is Ordered That: A civil penalty in the amount of $110,000 is imposed for violating Area Injection Order 36, for missed mechanical integrity tests on eleven Nikaitchuq injection wells. In addition to the civil penalty, Eni is required to develop and implement a tracking system for regulatory obligations, including an automated alert for approaching and past -due obligations, with notifications provided to Eni personnel responsible for the regulatory obligation. The results shall be presented to AOGCC by within three months of the effective date of Done at Anchorage, Alaskaand d July 26, 2017. Cath P. Foerster Daniel T. Seamount, Jr. Commissioner Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it maybe appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Other Order 124 July 26, 2017 Page 4 of 4 Table 1. Nikaitchuq Injection Wells — Mechanical Integrity Test History Status Well PTD 4 Date of Test Test Due Test Injecting since Date of Initial Test Result Frequency Date due date? Subsequent Test 1 WINJ 0106-05 210-165-0 4/26/2012 P 4 4/26/2016 Yes 12/9/2016 1 WINJ 0107-04 210-153-0 5/22/2012 P 4 5/22/2016 Yes 12/9/2016 1WINJ 0111-01 210-106-0 5/22/2012 P 4 5/22/2016 Yes 12/9/2016 1WINJ 0113-03 211-100-0 4/26/2012 P 4 4/26/2016 Yes 12/9/2016 1WINJ 0I15 -S4 211-141-0 4/13/2012 P 4 4/13/2016 Yes 12/9/2016 1WINJ 0120-07 211-140-0 8/24/2012 P 4 8/24/2016 Yes 12/9/2016 1WINJ 0124-08 211-130-0 7/3/2012 P 4 7/3/2016 Yes 12/9/2016 1 WINJ Oliktok Pt 1-2 206-144-0 4/26/2012 P 4 4/26/2016 Yes 12/10/2016 1 WINJ S120 -N04 212-029-0 5/22/2012 P 4 5/22/2016 Yes 12/10/2016 1 WINJ S125-NO2 212-090-0 9/11/2012 P 4 9/11/2016 Yes 12/10/2016 1WINJ S129 -S02 212-006-0 4/13/2012 P 4 4/13/2016 Yes 12/10/2016 C3 CO ..D Ln Ln !O rl Ll M C3 E3 E3 E3 0 C3 r- :xtra Services & Fees (check box, add fee as appropriate) IIII ❑ Return Receipt (hardcopy) $ I II ❑ Return Receipt (electronic) $ Postmark ❑ Certified Mail Restricted Delivery $ Here ❑ Adult Signature Required $ 3. Service Type ❑ Adult Signature ❑ Adult Signature Restricted Delivery $ Whitney Grande Safety & Environmental Director or PO Box Eni US Operating CO. Inc. ------------- 3800 Centerpoint Dr., Ste. 300 Anchorage, AK 99503 ■ Complete items 1, 2, and 3. A. ■ Print your name and address on the reverse X so that we can return the card to you. ■ Attach this card to the back of the mailpiece, B / or on the front if space permits. i 1. AMirlo A L Iro�� r ._. Whitney Grande Safety & Environmental Director Eni US Operating CO. Inc. 3800 Centerpoint Dr., Ste. 300 Anchorage, AK 99503 by (Pring Name) D. Is delivery address different from item 1 If YES, enter delivery address below: 7 II I Illlil IIII III I II I VIII I II I I 3. Service Type ❑ Adult Signature ❑ Priority Mail Express® II I I I II II I II I III ❑ Adult Signature Restricted Delivery Mail® 13 Registered MaiITM ❑ Registered Mail Restricted 9590 9402 1823 6104 6488 01 IJ Certified ❑ Certified Mail Restricted Delivery Delivery Ili3i7�turn Receipt for 2. Article Number (Transfer from servlce label) ❑ Collect on Delivery ❑ Collect on Delivery Restricted Delivery Merchandise ❑ Signature ConfirmatlonT. _ 7 015 0 6 4 0 0 0 0 3 518 5 5 6 8 0 ill til Restricted Delivery ❑ Signature Confirmation Restricted Delivery PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue Anchorage, Alaska 99501 Re: Failure to Test Eleven Injection Wells for ) Docket Number: OTH-17-001 Tubing/Casing Annulus Mechanical Integrity at ) Other Order 124 Nikaitchuq Unit. ) July 26, 2017 DECISION AND ORDER On March 22, 2017 the Alaska Oil and Gas Conservation Commission (AOGCC) issued a Notice of Proposed Enforcement Action (Notice) to Eni US Operating Company Inc. (Eni) regarding late mechanical integrity tests. The Notice was based upon Eni's performance of well operations at its Nikaitchuq Unit after failing to test injection wells for mechanical integrity as required by regulation. The Notice proposed specific corrective actions and a $110,000 civil penalty under AS 31.05.150(a). Eni requested an informal review. That review was held April 13, 2017. Summary of Proposed Enforcement Action: A review of injection well activities performed at Nikaitchuq by Eni revealed eleven (11) wells were not tested for mechanical integrity after the initial tests at injection startup, a violation of Area Injection Order 36. After gathering information and further discussions with Eni, AOGCC proposed a $110,000 civil penalty. Informal Review: Eni met with AOGCC on April 13, 2017 to present the results of its internal review. Eni's presentation outlined the summary of events, the root cause for missing the mechanical integrity test deadlines, and solutions in response to the proposed enforcement. Eni did not dispute the violation alleged in the Notice. Instead, Eni referenced confusion about ownership of the mechanical integrity testing responsibilities within its drilling and production groups as a contributing factor in the missed tests. Eni questioned the penalty amount during the review, Other Order 124 July 26, 2017 Page 2 of 4 suggesting it be reduced based on actions taken by Eni and what it characterized as a successful history of delivering a "high degree of regulatory compliance." Discussion: In its Informal Review presentation materials, Eni conceded it was aware in October 2016 that eleven injection wells at Nikaitchuq were past due for mechanical integrity testing. Eni alleges it began the process to complete the required tests at that time, yet the injection wells that were past due for mechanical integrity tests were not tested until December 9-10, 2016. Table 1. Mechanical integrity tests for the eleven injection wells were due beginning in April 2016. From April 1 through December 1, 2016, an AOGCC Inspector was at Nikaitchuq to witness safety valve system tests, meter inspections or blowout prevention equipment tests on six separate occasions. AOGCC was not notified the injection well mechanical integrity tests were late nor did Eni request additional time to complete the tests. Eni's ineffective tracking of and accountability for regulatory actions has been previously identified as a deficiency. A notice of violation was issued to Eni for failure to comply with the required actions noted in a deficiency report. Prior to that, AOGCC identified a missed reservoir surveillance report required by Conservation Order 639. Eni also failed to submit the required annual reservoir surveillance report for the Nikaitchuq Schrader Bluff Oil Pool each report year 2012 through 2015.1 FindinEs and Conclusions: Eni has violated Area Injection Order 36 during the operation of injection wells at Nikaitchuq by failing to perform required mechanical integrity tests on eleven wells. The factors in AS 31.05.150(g) have been considered in the determination of penalties for the Nikaitchuq violations.2 Eni failed to act in good faith because it knew the wells were out of compliance and failed to notify ' Production commenced in 2011; reservoir surveillance reports are due April 1 for the previous operating calendar year. AOGCC issued a Notice of Proposed Enforcement on June 30, 2016. The Decision and Order — Other Order 119 was issued on May 5, 2017. 2 AS 31.05.150(g) requires AOGCC to consider nine criteria in setting the amount of a civil penalty. Other Order 124 July 26, 2017 Page 3 of 4 the AOGCC. The passing tests on each of the eleven Nikaitchuq injection wells, witnessed by AOGCC on December 9-10, 2016, have mitigated the penalty imposed. AOGCC is imposing only a single $10,000 civil penalty for each well. No additional mitigations to the penalty are being applied. Now Therefore It Is Ordered That: A civil penalty in the amount of $110,000 is imposed for violating Area Injection Order 36, for missed mechanical integrity tests on eleven Nikaitchuq injection wells. In addition to the civil penalty, Eni is required to develop and implement a tracking system for regulatory obligations, including an automated alert for approaching and past -due obligations, with notifications provided to Eni personnel responsible for the regulatory obligation. The results shall be presented to AOGCC by within three months of the effective date of this decision. Done at Anchorage, Alaska and dated July 26, 2017. Hsignature on fileH Cathy P. Foerster Commissioner Hsignature on fileH Daniel T. Seamount, Jr. Commissioner RECONSIDERATION AND APPEAL NOTICE As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it may be appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to run is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Other Order 124 July 26, 2017 Page 4 of 4 Table 1. Nikaitchuq Injection Wells —Mechanical Integrity Test History Status Well PTD # Date of Test Test Due Test Injecting since Date of Initial Test Result Frequency Date due date? Subsequent Test 1 WIND 0106-05 210-165-0 4/26/2012 P 4 4/26/2016 Yes 12/9/2016 1WINJ 0107-04 210-153-0 5/22/2012 P 4 5/22/2016 Yes 12/9/2016 IWINJ 0111-01 210-106-0 5/22/2012 P 4 5/22/2016 Yes 12/9/2016 1WINJ 0113-03 211-100-0 4/26/2012 P 4 4/26/2016 Yes 12/9/2016 1WINJ 0115-54 211-141-0 4/13/2012 P 4 4/13/2016 Yes 12/9/2016 1WINJ 0120-07 211-140-0 8/24/2012 P 4 8/24/2016 Yes 12/9/2016 1WINJ 0124-08 211-130-0 7/3/2012 P 4 7/3/2016 Yes 12/9/2016 I WINJ Oliktok Pt 1-2 206-144-0 4/26/2012 P 4 4/26/2016 Yes 12/10/2016 1 WINJ 5120-N04 212-029-0 5/22/2012 P 4 5/22/2016 Yes 12/10/2016 1 WINJ S125-NO2 212-090-0 9/11/2012 P 4 9/11/2016 Yes 12/10/2016 1 WINJ S129 -SO2 212-006-0 4/13/2012 P 4 4/13/2016 Yes 12/10/2016 Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711-0055 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Box 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639-0309 Fairbanks, AK 99706-0868 ria k'I% a 7 -Z -7-2c,\71( Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, July 26, 2017 2:50 PM To: aogcc.inspectors@alaska.gov; Bender, Makana K (DOA) (makana.bender@alaska.gov); Bettis, Patricia K (DOA) (patricia.bettis@alaska.gov); Brooks, Phoebe L (DOA) (phoebe.brooks@alaska.gov); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA) Oody.colombie@alaska.gov); Davies, Stephen F (DOA) (steve.davies@alaska.gov); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA) (cathy.foerster@alaska.gov); French, Hollis (DOA); Frystacky, Michal (michal.frystacky@alaska.gov); Guhl, Meredith (DOA sponsored) (meredith.guhl@alaska.gov); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored) Ooseph.mumm@alaska.gov); Paladijczuk, Tracie L (DOA) (tracie.palad ijczuk@alaska.gov); Pasqual, Maria (DOA) (maria.pasqual@alaska.gov); Quick, Michael (DOA sponsored); Regg, James B (DOA) Oim.regg@alaska.gov); Roby, David S (DOA) (dave.roby@alaska.gov); Schwartz, Guy L (DOA) (guy.schwartz@alaska.gov); Seamount, Dan T (DOA) (dan.seamount@alaska.gov); Singh, Angela K (DOA); Wallace, Chris D (DOA) (chris.wallace@alaska.gov); AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Alicia Showalter; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; Becky Bohrer; Ben Boettger; Bill Bredar; Bob; Brandon Viator; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Darci Horner; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David McCraine; ddonkel@cfl.rr.com; DNROG Units; Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Garrett Brown; George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hunter Cox; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Watt; Jim White; Joe Lastufka; Joe Nicks; John Burdick; John Easton; John Larsen; John Stuart; Jon Goltz; Josef Chmielowski; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kevin Frank; Kruse, Rebecca D (DNR); Kyla Choquette; Laura Silliphant (laura.gregersen@alaska.gov); Leslie Smith; Lori Nelson; Louisiana Cutler; Luke Keller; Marc Kovak; Mark Dalton; Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; Mike Morgan; MJ Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); nelson; Nichole Saunders; Nick Ostrovsky; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Paul Decker (paul.decker@alaska.gov); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Warthen; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Steve Moothart (steve.moothart@alaska.gov); Steve Quinn; Suzanne Gibson; Tamera Sheffield; Ted Kramer, Teresa Imm; Tim Jones; Tim Mayers; Todd Durkee; Tom Maloney; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity; Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Corey Munk; Don Shaw; Eppie Hogan ; Eric Lidji; Garrett Haag; Graham Smith; Heusser, Heather A (DNR); Holly Fair; Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Jim Shine; Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Marie Steele; Matt Armstrong; Melonnie Amundson; Mike Franger; Morgan, Kirk A (DNR); Pascal Umekwe; Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Susan Pollard; Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke Subject: Other Order 124 (Decision and Order ENI) Attachments: Otheriz4.pdf Please see attached. Re: Failure to Test Eleven Injection Wells for Tubing/Casing Annulus Mechanical Integrity at Nikaitchuq Unit. Docket Number: OTH-17-001 Other Order 124 Jody J. CoCombie AOGCC Specia[ ssistant ACaska OiCand qas Conservation Commission 333 West 7" .Avenue Anchorage, ACaska 9,9501 Office: (907) 793-1221 fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska.gov. Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, July 26, 2017 2:47 PM To: 'Whitney.Grande@enipetroleum.com' Subject: Other Order 124 Attachments: Other124.pdf Please see attached. Jody J. Colombie AOGCC SpeciafAssistant Alaska OilandGas Conservation Commission 333 'Vest 7'' Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iody.colombie@alaska.gov. INDEXES 5 August 17, 2017 VIA HAND DELIVERY Alaska Oil and Gas Conservation Commission Attn: Commissioner's 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 eni us operradi ng eni us operating co. inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 - U.S.A. Tel. 907-865-3300 Fax 907-865-3380 RECEIVED Re: Decision and Order - July 25, 2017 Docket Number: OTH-17-001 Failure to Test Eleven Injection Wells for Tubing/Casing Annulus - Mechanical Integrity Nikaitchuq Unit, North Slope Alaska Dear Commissioner's: AUG 16 2017 Reference is made to the referenced docket number and Alaska Oil and Gas Conservation Commission's (AOGCC) Notice of Proposed Enforcement Action dated March 22, 2017 for late mechanical integrity tests on eleven Nikaitchuq injection wells. Enclosed please find Eni's check number 2062163 payable to AOGCC in the amount of $110,000.00 for the imposed civil penalty. Eni has implemented an effective tracking system and is adding additional resources to the organization to bolster our tracking and compliance. The required mechanical integrity well tests and all other regulatory actions will be met in a timely and effective manner. Sincerely yours, Robert Province Land Manager and Alaska Representative Eni US Operation Co. Inc. Encl: Check #2062163 IPY ENI US OPERATING CC 1200 Smith, Suite 1700 Houston, TX 77002 us operating 713-393-6100 I�n�I�nI�r 111�InnI�lnl�n�r �1ln l�n�I�n�I�I�11u11r 00002 CKS ND 17222 - 0002062163 NNNNNNNNNNNN 2225100005209 %619A1 C ALASKA OIL AND GAS CONSERVATION COMMISSION AOGCC 333 WEST 7TH AVENUE SUITE 100 ANCHORAGE AK 99503 VENDOR NO: 0000457972 2062163 PAGE: 1d DATE: August 10, 2017 CHECK NUMBER: 2062163 AMOUNT PAID: $110,000.00 ACCOUNT NUMBER: 113344023 Eni US OperatingCo.Inc.05 DIRECT INQUIRIES TO: 713-393-6100 Falc DATE INVOICE NUMBER DESCRIPTION GROSSAMOUNT DISCOUNT NETAMOUNT 08/03/17 CHKRE008032017 CIVIL PENALTY FAILURE TO TEST $110,000.00 $0.00 $110,000.00 TOTALS $110,000.00 $0.00 $110,000.00 PLEASE DETACH BEFORE DEPOSITING CHECK ENI US OPERATING CO. INC. 7200 Smith. Suite 1700 Houston, TX 77002 us operating 713-393-6100 PAY ALASKA OIL AND GAS CONSERVATION TO THE COMMISSION AOGCC ORDER OF: 333 WEST 7TH AVENUE SUITE 100 ANCHORAGE, AK 99603 JPMorgan Chase Bank, N.A. Dallas, TX RECEIVED AUG 16 2017 A0GC',G CHECK 32-61 NUMBER 2062163 1110 August 10, 2017 "' VOID AFTER 180 DAYS ... EXACTLY "'110,000 DOLLARS AND 00 CENTS CHECKAMOUNT $110x000.00 Authorized Signature 11'206216311• 1:1110006i4o: 11334402311' LY`Jc(1 —13%PY Eni AOGCC Informal Hearin. g April 11,, 2017 t'ECEIVEL) APR 11201? AOGCC eni-lus operating co. inc Whitney Grande, Marc Kuck, Robert Province^x. & Cody Gauer Summary of Events �®i October 2016 • Production Operator reviewing & editing operating procedures begins review of Nikaitchuq Mechanical Integrity Testing Procedure. • Upon review operator requests Lead Operator to verify that all wells are in compliance and have had an MIT completed. • Lead Operator confirms 11 Injectors are past due for MIT • Operations immediately begins process to complete MIT's and ensure compliance November 2016 • Barton Chart Recorders sent out for calibration • Procedure is edited, reviewed, and approved through the PSM OSSuites/Axis system. Approved copy issued for use Nov 29, 2016 • Operations Team submits request to have MIT Test Dates added to SAP PM log December 2016 • Request for witness submitted & tests completed on Dec 9, 2016 • All Spy Island Injection Wells tested & completed with the exception of 2 wells • S134& S135 MIT's due in 2019 and late 2017 i Root Cause of Missed Deadline W enn! Greater clarity needed regarding ownership of Mechanical Integrity Testing protocols SAP Routine Preventative Maintenance (PM) notification not created in 2011 • Routine Ops & Maintenance PM's are logged and tracked in SAP. The system automatically generates notifications in advance of upcoming PM's • Upon Start up, Injector MIT's were not included in the original PM list • Currently SAP is used for Surface Safety Valve testing and has been successful in maintaining compliance 3 Solutions % eni MIT PM's Added to SAP • New MIT PM's have been added to the system and will be automatically populated on the "Hitch List" and appropriate notifications made • An update of the in-house Well Integrity Tool database has been completed to ensure full well integrity compliance for all Nikaitchuq wells Clear Department Ownership of Mechanical Integrity Tests • Clear Division of responsibilities between groups has been discussed and documented • Production Operations will be tasked with maintaining compliance on MIT's In Depth Review of Existing Process & Procedures • A complete review of processes and procedures that involve AOGCC regulations will be completed to ensure that all compliance standards are being adhered to Additional Resources Added • A full time slope based position is being created in the organization that will focus strictly on regulatory compliance 4 Nikaitchuq's History of Success The Nikaitchuq Production & Well Ops Team has a successful history of delivering a high degree of regulatory compliance • The team routinely communicates with the AOGCC on many items and has been timely and punctual on all requirements, such as: • Surface Safety Valve Testing • Lease Automatic Custody Transfer (LACT) Meter proving & maintenance • Monthly Reporting Requirements • Well Waiver Requests • No -Flow Testing • BOPE Testing • Drilling Permits • Sundries • Completions Reports • Non -regulatory internal Well Integrity Testing standards 5 Eni Has Addressed Timeliness of Annual Surveillance Report • The gravity of this matter was recognized and rigid timeline notifications were implemented in the Land and Reservoir Departments to ensure all deadlines are adhered to. This solution proved successful by the timely submittal of the 2016 reporting cycle. 6 Reservoir Surveillance Report (Due April 1st) Land Manager (LM) Reservoir Manager (RM) - Sends internal notice that Report is due Receives notice from LM. - Meets with team to discuss Report Provides Report material to LM & OM - Prepares transmitted letter to AOGCC Confirms with LM that original Report is complete & & delivers Report to AOGCCArdelivered to AOGCC q Office Manager (OM) - Sets up calendar reminder for Report - Advises LM Report Due April 111. - Checks status of draft Report. Confirms original report is complete and final. Administrative Assistant (AA) Provides needed assistance to OM Responsible for mailing Report NOV for Well Signage • After review of AOGCC regulation 20 AAC 25.040 we determined from section (a)(6)(d) that the signs on site designated wells with an "L1". The regulations require and ML designation. • (d) For wells with more than one permitted wellbore (i.e. multi-branch completion) the primary wellbore will require compliance with (a)(1) - (6) of this section. Individual branch details as specified by (a)(1) - (6) of this section need not be posted but must be available upon request. The wellhead sign must include the suffix "ML" in the wellname indicating multiple active wellbores are present. • As a corrective action, all well signs were updated with the multi lateral PTD number and ML designation and the matter was considered closed on December 19, 2016 THE STATE Alaska Oil and Gas 01AT AS A Conservation Commission GOVERNOR BILL WALKER March 31, 2017 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 1660 00001487 7289 Mr. Whitney Grande Safety & Environmental Director Eni US Operating Co. Inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 Re: Docket Number: OTH-17-001 Informal Review Late Mechanical Integrity Tests Nikaitchuq Unit Dear Mr. Grande: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.claska.gov As part of the informal review process, ENI US Operating Co. Inc. (ENI) has the opportunity to submit documentary material and make written and oral statements regarding the above referenced Notice of Proposed Enforcement Action. There will be no formal record kept of the review and the review will not involve the presence of counsel, either for the Alaska Oil and Gas Conservation Commission (AOGCC) or the operator. The informal review is scheduled for April 13, 2017.at 10:00 a.m. in the AOGCC's Anchorage office located at 333 West 7th Avenue. Copies of all written submissions and summaries of any oral statements planned by ENI should be provided to the AOGCC no later than April 11, 2016. Sincerely, Cathy,'P. Foerster Chair, Commissioner 7ostal Service TM TIFIFn MAIL® RFCFIF Domestic Mail Only For delivery information, visit our website at www.usps.com®. rICID Certified Mail Fee ra Extra Services & Fees (checkbox, add fee as appropriate) ❑ Return Receipt (hardcopy) $ M ❑ Return Receipt (electronic) $ Postmark 0 r-1 Certified Mail Restricted Delivery $ Here ❑ Adult Signature Required $ O ❑ Adult Signature Restricted Delivery $ r3 Postage .D $ -� Total Postage and Fees a Mr. Whitney Grande $ t!7 Sent To Safety & Environmental Director '-q p N -- Street and Apt. Pa !#ox Operating Eni USO eratin Co. Inc. r%- 3800 Centerpoint Dr., Ste. 300 Cif}; State, ZIP+4® Anchorage, AK 99503 W April 3, 2017 VIA HAND DELIVERY Commissioner Cathy Foerster Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 Re. Docket Number- ®A H-17-001 Late Mechanical lntegrity'l'ests Nikaitchuq Unit, North Slope Alaska Dear Commissioner l+oerster: eno us opera gong eni us operating co. inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 — U.S.A. Tel, 907-865-3300 Fax 907-865-3380 RECEIVE® MAR 3 0 2017 Reference is made to the subject docket number and AOGCC's letter dated March 22, 2017 regarding proposed enforcement action. Eni hereby requests an informal review to provide AOGCC assurance that it will not violate the provisions of Area Injection Order 36 Rule 6 for Nikaitchuq Unit injection wells. Please contact me should you have questions or require additional information. Sincerely yours, Whitney Grande SEQ Director and Alaska Representative Eni US Operation Co. Inc. THE STATE Alaska OH and Gas �f�� 11 a `�C 1 �il_,_ Conservation 3®lift Commission GOVERNOR BILL WALKER March 22, 2017 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 1660 00001487 7265 Mr. Whitney Grande Safety & Environmental Director Eni US Operating Co. Inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 Re: Docket Number: OTH-17-001 Late Mechanical Integrity Tests Nikaitchuq Unit Dear Mr. Grande: 333 west Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.00gcc.alosko.gov Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Eni US Operating Company Inc. (Eni) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Eni has violated the provisions of Area Injection Order 36 Rule 6 ("Demonstration of Tubing/Casing Annulus Mechanical Integrity") for eleven Nikaitchuq Unit (NU) injection wells. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Area Injection Order 36 was approved January 19, 2011. The order authorizes the underground injection of fluids for enhanced oil recovery in the Nikaitchuq Schrader Bluff Oil Pool. The rules require mechanical integrity tests on NU injection wells: - Before injection begins; - Before returning a well to service following any workover affecting mechanical integrity; - After injection is commenced for the first time in a well, for witness by AOGCC; and - At least once every four years following the initial mechanical integrity test. Since the initial mechanical integrity tests were completed, Eni has failed to perform subsequent tests on eleven of the active Nikaitchuq enhanced recovery injection wells as of December 1, Notice of Proposed Enforcement Docket Number: OTH-17-001 March 22, 2017 Page 2 of 4 2016.1 Table 1. The Nikaitchuq injection wells are out of compliance with mechanical integrity testing requirements by as much as seven months. Eni has made no official request to postpone mechanical integrity tests. Between May 1, 2015 and December 1, 2016 AOGCC Inspectors have been at Nikaitchuq facilities twelve times to witness tests of blowout prevention equipment and well safety valve systems. At no time was there an attempt by Eni to test any of the injection wells for compliance with the mechanical integrity requirements of Area Injection Order 36. AOGCC test notification record is void of requests from Eni to witness mechanical integrity tests on the wells that are out of compliance.' The missed tests call into question the integrity of Eni's regulatory tracking efforts for its injection wells. Proposed Action (20 AAC 25.535(b)(3)). The mechanical integrity testing violations at Nikaitchuq are not isolated and demonstrate Eni's ongoing compliance problems. Recent examples of noncompliant activities include: - Late submittal of an annual surveillance report for the Nikaitchuq Schrader Bluff Oil Pool in years 2013, 2014, 2015 and 2016; notice of proposed enforcement issued June 30, 2016 (AOGCC Docket OTH-16-022); - Notice of Violation for failing to address deficiencies relating to well signage requirements issued December 7, 2016 (Docket Number: OTH-16-033). Whether a disregard for regulatory compliance or an inadequate regulatory compliance tracking system, Eni's conduct is unacceptable. For violating provisions of Area Injection Order 36, Rule 6 the AOGCC intends to impose a civil penalty on Eni in the amount of $110,000.3 In determining the amount of the penalty, AOGCC has considered the extent to which Eni was acting in good faith in attempting to comply, the extent to which Eni acted in a willful or knowing manner, the need to deter similar behavior by Eni and others similarly situated at the time of the violation or in the future, and Eni's history of compliance issues.' There are no applicable mitigating factors. In addition to the imposed civil penalty, AOGCC intends to require Eni to provide a detailed written explanation as to how it intends to prevent recurrence of this violation. AOGCC also intends to require Eni to provide a more robust regulatory compliance tracking system that addresses all AOGCC-mandated obligations. An AOGCC Inspector witnessed mechanical integrity tests on nineteen Nikaitchuq wells on December 9-10, 2016.Test reports were received from Eni on December 11, 2016 and January 9, 20I7. Two enhanced recovery injectors were not tested (due in 2017). 2 Test notification is outlined in Area Injection Order 36, Rule 6 and AOGCC Industry Guidance Bulletin 10-OIA (November 7, 2012). 3 Penalty amount arrived at considering each well a separate initial violation, penalized at $10,000 per violation. 4 AS 31.05.150(g) sets forth the criteria for determination of a civil penalty. Notice of Proposed Enforcement Docket Number: OTH-17-001 March 22, 2017 Page 3 of 4 Rights and Liabilities_ (20 AAC 25.535(b)(4 Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — Eni may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Eni an opportunity to submit documentary material and make a written or oral statement. If Eni disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the I ph day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Eni does not concur in the proposed action described herein, and the AOGCC finds that Eni violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Eni received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described herein or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05.160. AOGCC has granted Eni's request to combine into a single meeting the informal review of several recent notices of proposed enforcement. This proposed action can also be included in the informal review but Eni must notify AOGCC in accordance with the above -stated Rights and Liabilities. Sincerely, Cathy . Foerster Chair, Commissioner Table 1. Status of Nikaitchuq Unit Mechanical Integrity Tests as of December 1, 2016 Well PTD # Status Date of Result Frequency Due Date Injecting since Last Test MIT due date? NIKAITCHUQ 0106-05 210-165-0 1WINJ 4/26/2012 P 4 4/2612016 Yes NIKAITCHUQ 0107-04 210-153-0 1WINJ 5/22/2012 P 4 5/22)2016 Yes NIKAITCHUQ 0111-01 210-106-0 1WINJ 5/22/2012 P 4 5122/2016 Yes NIKAITCHUQ 0113-03 211-100-0 1WINJ 4/26/2012 P 4 4/2612016 Yes NIKAITCHUQ 0115-S4 211-141-0 1WINJ 4/13/2012 P 4 411312016 Yes NIKAITCHUQ 0120-07 211-140-0 1WINJ 8/24/2012 P 4 8/24/2016 Yes NIKAITCHUQ 0124-08 211-130-0 1WINJ 7/3/2012 P 4 7/312016 Yes OLIKTOK POINT 1-2 206-144-0 1WINJ 4/26/2012 P 4 4/26/2016 Yes NIKAITCHUQ S107-SE4 214-100-0 1WINJ 8/13/2015 P 4 8/13/2019 N/A NIKAITCHUQ 5111-FN6 213-128-0 1WINJ 11/2/2014 P 4 11/2/2018 N/A NIKAITCHUQ S113-FN04 212-156-0 1WINJ 1/4/2013 P 4 1/4/2017 NIA NIKAITCHUQ S114 -N6 213-194-0 1WINJ 2/22/2014 P 4 2/22/2018 NIA NIKAITCHUQ S117-SE2 214-041-0 1WINJ 6/20/2014 P 4 6/20/2018 NIA NIKAITCHUQ S119-FN2 213-043-0 1WINJ 8/1/2013 P 4 8/1/2017 NIA NIKAITCHUQ S120-NO4 212-029-0 1WINJ 5/22/2012 P 4 5122/2016 Yes NIKAITCHUQ S125-NO2 212-090.0 1WINJ 9/11/2012 P 4 9/11/2016 Yes NIKAiTCHUQ 5126-NW2 214-157-0 1WINJ 1/16/2015 P 4 1/16/2019 WA NIKAITCHUQ S129 -SO2 212-006-0 1WINJ 4/13/2012 P 4 411312016 Yes NIKAITCHUQ S132 -W2 213-013-0 1WINJ 5/25/2013 P 4 5/25/2017 N/A NIKAITCHUQ S134 -W6 215-016-0 1WINJ 4/17/2015 P 4 4/1712019 NIA NIKAITCHUQ S135 -W4 213-101-0 1WINJ 10/2512013 P 4 10/25/2017 WA THE STATE Alaska Oil and Gas ®f AL Conservation Commission 1--IASKA GOVERNOR BILL WALKER March 22, 2017 CERTIFIED MAIL — RETURN RECEIPT REQUESTED 7015 1660 00001487 7265 Mr. Whitney Grande Safety & Environmental Director Eni US Operating Co. Inc. 3800 Centerpoint Dr., Suite 300 Anchorage, AK 99503 Re: Docket Number: OTH-17-001 Late Mechanical Integrity Tests Nikaitchuq Unit Dear Mr. Grande: 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 www.aogcc.alaska.gov Pursuant to 20 AAC 25.535, the Alaska Oil and Gas Conservation Commission (AOGCC) hereby notifies Eni US Operating Company Inc. (Eni) of a proposed enforcement action. Nature of the Apparent Violation or Noncompliance (20 AAC 25.535(b)(1)). Eni has violated the provisions of Area Injection Order 36 Rule 6 ("Demonstration of Tubing/Casing Annulus Mechanical Integrity") for eleven Nikaitchuq Unit (NU) injection wells. Basis for Finding the Violation or Noncompliance (20 AAC 25.535(b)(2)). Area Injection Order 36 was approved January 19, 2011. The order authorizes the underground injection of fluids for enhanced oil recovery in the Nikaitchuq Schrader Bluff Oil Pool. The rules require mechanical integrity tests on NU injection wells: - Before injection begins; - Before returning a well to service following any workover affecting mechanical integrity; - After injection is commenced for the first time in a well, for witness by AOGCC; and - At least once every four years following the initial mechanical integrity test. Since the initial mechanical integrity tests were completed, Eni has failed to perform subsequent tests on eleven of the active Nikaitchuq enhanced recovery injection wells as of December 1, Notice of Proposed Enforcement Docket Number: OTH-17-001 March 22, 2017 Page 2 of 4 2016.1 Table 1. The Nikaitchuq injection wells are out of compliance with mechanical integrity testing requirements by as much as seven months. Eni has made no official request to postpone mechanical integrity tests. Between May 1, 2015 and December 1, 2016 AOGCC Inspectors have been at Nikaitchuq facilities twelve times to witness tests of blowout prevention equipment and well safety valve systems. At no time was there an attempt by Eni to test any of the injection wells for compliance with the mechanical integrity requirements of Area Injection Order 36. AOGCC test notification record is void of requests from Eni to witness mechanical integrity tests on the wells that are out of compliance.2 The missed tests call into question the integrity of Eni's regulatory tracking efforts for its injection wells. Proposed Action (20 AAC 25.535(b)(3)). The mechanical integrity testing violations at Nikaitchuq are not isolated and demonstrate Eni's ongoing compliance problems. Recent examples of noncompliant activities include: - Late submittal of an annual surveillance report for the Nikaitchuq Schrader Bluff Oil Pool in years 2013, 2014, 2015 and 2016; notice of proposed enforcement issued June 30, 2016 (AOGCC Docket OTH-16-022); - Notice of Violation for failing to address deficiencies relating to well signage requirements issued December 7, 2016 (Docket Number: OTH-16-033). Whether a disregard for regulatory compliance or an inadequate regulatory compliance tracking system, Eni's conduct is unacceptable. For violating provisions of Area Injection Order 36, Rule 6 the AOGCC intends to impose a civil penalty on Eni in the amount of $110,000.3 In determining the amount of the penalty, AOGCC has considered the extent to which Eni was acting in good faith in attempting to comply, the extent to which Eni acted in a willful or knowing manner, the need to deter similar behavior by Eni and others similarly situated at the time of the violation or in the future, and Eni's history of compliance issues.4 There are no applicable mitigating factors. In addition to the imposed civil penalty, AOGCC intends to require Eni to provide a detailed written explanation as to how it intends to prevent recurrence of this violation. AOGCC also intends to require Eni to provide a more robust regulatory compliance tracking system that addresses all AOGCC-mandated obligations. I An AOGCC Inspector witnessed mechanical integrity tests on nineteen Nikaitchuq wells on December 9-10, 2016.Test reports were received from Eni on December 11, 2016 and January 9, 2017. Two enhanced recovery injectors were not tested (due in 2017). 2 Test notification is outlined in Area Injection Order 36, Rule 6 and AOGCC Industry Guidance Bulletin 10-01A (November 7, 2012). s Penalty amount arrived at considering each well a separate initial violation, penalized at $10,000 per violation. a AS 31.05.150(g) sets forth the criteria for determination of a civil penalty. Notice of Proposed Enforcement Docket Number: OTH-17-001 March 22, 2017 Page 3 of 4 Rights and Liabilities (20 AAC 25.535(b)(4)) Within 15 days after receipt of this notification — unless the AOGCC, in its discretion, grants an extension for good cause shown — Eni may file with the AOGCC a written response that concurs in whole or in part with the proposed action described herein, requests informal review, or requests a hearing under 20 AAC 25.540. If a timely response is not filed, the proposed action will be deemed accepted by default. If informal review is requested, the AOGCC will provide Eni an opportunity to submit documentary material and make a written or oral statement. If Eni disagrees with the AOGCC's proposed decision or order after that review, it may file a written request for a hearing within 10 days after the proposed decision or order is issued. If such a request is not filed within that 10 -day period, the proposed decision or order will become final on the 11 1" day after it was issued. If such a request is timely filed, the AOGCC will hold its decision in abeyance and schedule a hearing. If Eni does not concur in the proposed action described herein, and the AOGCC finds that Eni violated a provision of AS 31.05, 20 AAC 25, or an AOGCC order, permit or other approval, then the AOGCC may take any action authorized by the applicable law including ordering one or more of the following: (i) corrective action; (ii) suspension or revocation of a permit or other approval; and (iii) imposition of penalties under AS 31.05.150. In taking action after an informal review or hearing, the AOGCC is not limited to ordering the proposed action described herein, as long as Eni received reasonable notice and opportunity to be heard with respect to the AOGCC's action. Any action described herein or taken after an informal review or hearing does not limit the action the AOGCC may take under AS 31.05.160. AOGCC has granted Eni's request to combine into a single meeting the informal review of several recent notices of proposed enforcement. This proposed action can also be included in the informal review but Eni must notify AOGCC in accordance with the above -stated Rights and Liabilities. Sincerely, Cathy +. Foerster Chair, Commissioner Table 1. Status of Nikaitchuq Unit Mechanical Integrity Tests as of December 1, 2016 Well PTD # Status Date of Result Frequency Due Date Injecting since Last Test MIT due date? NIKAITCHUQ 0106-05 210-165-0 1WINJ 4/26/2012 P 4 4/26/2016 Yes NIKAITCHUQ 0107-04 210-153-0 1WINJ 5/22/2012 P 4 5/22/2016 Yes NIKAITCHUQ 0111-01 210-106-0 1WINJ 5/22/2012 P 4 5/22/2016 Yes NIKAITCHUQ 0113-03 211-100-0 1WINJ 4/26/2012 P 4 4/26/2016 Yes NIKAITCHUQ 0115-S4 211-141-0 1WINJ 4/13/2012 P 4 4/13/2016 Yes NIKAITCHUQ 0120-07 211-140-0 1WINJ 8/24/2012 P 4 8/24/2016 Yes NIKAITCHUQ 0124-08 211-130-0 1WINJ 7/3/2012 P 4 7/3/2016 Yes OLIKTOK POINT 1-2 206-144-0 1WINJ 4/26/2012 P 4 4/26/2016 Yes NIKAITCHUQ S107-SE4 214-100-0 1WINJ 8/13/2015 P 4 8/13/2019 N/A NIKAITCHUQ Sill-FN6 213-128-0 1WINJ 11/2/2014 P 4 11/2/2018 N/A NIKAITCHUQ S113-FN04 212-156-0 1WINJ 1/4/2013 P 4 1/4/2017 N/A NIKAITCHUQ SI14-N6 213-194-0 1WINJ 2/22/2014 P 4 2/22/2018 N/A NIKAITCHUQ S117-SE2 214-041-0 1WINJ 6/20/2014 P 4 6/20/2018 N/A NIKAITCHUQ SI19-FN2 213-043-0 1WINJ 8/1/2013 P 4 8/1/2017 N/A NIKAITCHUQ S120 -N04 212-029-0 1WINJ 5/22/2012 P 4 5/22/2016 Yes NIKAITCHUQ S125-NO2 212-090-0 1WINJ 9/11/2012 P 4 9/11/2016 Yes NIKAITCHUQ S126-NW2 214-157-0 1WINJ 1/16/2015 P 4 1/16/2019 N/A NIKAITCHUQ S129 -S02 212-006-0 1WINJ 4/13/2012 P 4 4/13/2016 Yes NIKAITCHUQ S132 -W2 213-013-0 1WINJ 5/25/2013 P 4 5/25/2017 N/A NIKAITCHUQ S134 -W6 215-016-0 1WINJ 4/17/2015 P 4 4/17/2019 N/A NIKAITCHUQ S135 -W4 213-101-0 1WINJ 10/25/2013 P 4 10/25/2017 N/A US' Postal ServiceTM C3 ❑ Return Receipt (electronic) $ Postmark Q U. CERTIFIED $ Here E3 MAIL° RECEIPT ❑ Adult Signature Restricted Delivery nnmectir Mail Only ❑ Adult Signature $ we 1 iii f`- .0 Certified Mail Fee r q Extra Services & Fees (check box, add fee as appropriate) ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. Whitney Grande Safety & Environmental Director Eni US Operating Co. Inc. 3800 Centerpoint Dr., Ste. 300 Anchroage, AK 99503 A. eceived by (Printed Name) C.C. ❑ Agent D. is delivery address different from item 1 Y 1-i Ye., if YES, enter delivery address below: ❑ No ECEIVED MAN 2 8 2017 ❑ Return Receipt (hardcopy) $ C3 ❑ Return Receipt (electronic) $ Postmark Q 1-1 Certified Mail Restricted Delivery $ Here E3 ❑Adult Signature Required $ ❑ Adult Signature Restricted Delivery $ C3 Postage ❑ Adult Signature $ II a Total Postage and Fees Mr. Whitney Grande $ Safety & Environmental Director u"1 Sent To V '-q I II'lllll - Eni US Operating Co. Inc. Street and Apt IVo., or FO Box I r —3800 R ❑Registered Mail Restricted Centerpoint Dr., Ste. 300 city state; ziP+d®' '"""' Anchroage, AK 99503 ■ Complete items 1, 2, and 3. ■ Print your name and address on the reverse so that we can return the card to you. ■ Attach this card to the back of the mailpiece, or on the front if space permits. Mr. Whitney Grande Safety & Environmental Director Eni US Operating Co. Inc. 3800 Centerpoint Dr., Ste. 300 Anchroage, AK 99503 A. eceived by (Printed Name) C.C. ❑ Agent D. is delivery address different from item 1 Y 1-i Ye., if YES, enter delivery address below: ❑ No ECEIVED MAN 2 8 2017 3. Service Type 9- %./%a W.0 lority Mail Express@ ❑ Adult Signature El Registered Mall II I II�III III I I I II I IIII V I I I II'lllll I I I I ❑ Adult Signature Restricted Delivery R ❑Registered Mail Restricted ffCertified Mail® Delivery 9590 9402 1823 6104 6489 48 ❑ Certified Mail Restricted Delivery URetum Receipt for Merchandise ❑ Collect on Delivery ❑ Collect on Delivery Restricted Delivery ❑ Signature ConfirmationTM ❑ Signature Confirmation 2. Article Number (Transfer from service /a6efl 7 015 1660 0000 1487 7265 ed Mail ed Mail Restricted Delivery Restricted Delivery $500) PS Form 3811, July 2015 PSN 7530-02-000-9053 Domestic Return Receipt