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AOGCC fines Hilcorp for missed well test
Test required every 2 years on injection well D-41 at McArthur River field in Trading Bay unit; company self-reported missed test
Kristen Nelson Petroleum News
The Alaska Oil and Gas Conservation Commission has fined Hilcorp Alaska $50,000 for a missed test on the D-41 injection well in the McArthur River field at the company's Trading Bay unit in Cook Inlet.
A temperature survey was required every two years at the D-41, a schedule established in 2016 when AOGCC approved substituting a temperature survey for a mechanical integrity test on the well, which was injecting water only "with a known tubing by inner annulus pressure communications," the commission said in a Sept. 19 decision and order.
Hilcorp notified AOGCC Feb. 21 that it had missed a scheduled Jan. 21 temperature survey for the well, violating Area Injection Order 5.021. The company completed the survey Feb. 25 and provided results to the commission Feb. 25.
Company's investigation Hilcorp completed an internal investigation, which it sent to the commission July 15 with a cover letter from Hilcorp Alaska Senior Vice President Luke Saugier, including "a root cause analysis and actions to prevent recurrence." AOGCC said in its September order that it required no further written explanation.
The company said it determined the missed test was the result of inadequate implementation of its policies, standards and procedures "due to deficiencies."
The well is on the Dolly Varden Platform, and Hilcorp said that platform "relies on varying systems including Outlook email and calendar reminders, manual entries into a work order tracking tool, notification from Engineering or Compliance staff, or written entries in the control room. In this case," Hilcorp said, "the tools were deficient in notifying the responsible and accountable personnel in advance of the policy deadline."
Under actions taken to prevent recurrence the company said it would examine an automated notification process -- which is what it is using for its North Slope operations -- and would discuss details further with AOGCC staff, and regularly monitor the tracking system to ensure tools are working correctly.
The company also cited inadequate vertical communication and proposed standardizing "ownership of compliance tasks across the organization to ensure proper delegation."
Hilcorp included a description of different processes in place to track compliance between the Prudhoe Bay unit, which it operates, other North Slope facilities -- Milne Point and Northstar, for example -- and what takes place at its Cook Inlet assets, where due dates for compliance tests "are documented in an Excel spreadsheet."
The penalty The commission said in addition to the $50,000 fine, "Hilcorp is required to improve its regulatory compliance by implementing the corrective actions detailed" in the company's investigation report.
The $50,000 fine is for the initial violation, the commission said, and does not include daily penalties, which AOGCC can impose for the period in which the company is of compliance.
"Hilcorp's failure to comply with the AOGCC order raises the potential for similar behavior with more serious consequences. Consideration of the civil penalty includes Hilcorp's history of compliance/noncompliance and the need to deter simar behavior(s)," the commission said, noting it also considered the existing aquifer exemption at the Trading Bay unit, "no injury to the public or the environment, and Hilcorp's cooperation with the investigation."
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