Tuesday, April 18, 2017

BP Kills Old Alaska Well After Stopping Oil, Natural Gas Leaks at Prudhoe Bay site

Jessica Summers and
Alex Nussbaum
April 16, 2017, 5:43 PM EDT April 17, 2017, 5:43 PM EDT

Gas leak ended overnight, a day after oil spray was stopped

Two leaks occurred at Prudhoe Bay site on Friday morning

A BP Plc well on Alaska’s North Slope is no longer leaking crude oil or natural gas, a spokeswoman said Monday. Environmentalists, describing the well as “out of control,” called on the state to investigate.

The crude spray was discovered Friday morning, and capped early Sunday. A second leak that was emitting gas at a reduced rate was closed off overnight on Sunday, spokeswoman Dawn Patience said in an email. The well was originally completed in 1976 and was currently producing the equivalent of about 500 barrels of oil a day, she said.

The leak came as the remote North Slope, once home to America’s biggest oilfields, has seen signs of a resurgence with producers working to boost output from aging wells and extend their reach to new supplies. Output there rose to 565,000 barrels a day in March, its highest level since December 2013. That’s still down by almost three-quarters from the peak of more than 2 million barrels in the late 1980s.

“The well is no longer leaking any gas or oil,” Patience wrote. “Overnight, the Unified Command achieved source control and killed the well. ”

In 2010, a BP well became the site of the worst offshore oil spill in U.S. history. The deadly Deepwater Horizon accident in the Gulf of Mexico forced BP to sell billions of dollars in assets and set aside more than $50 billion to pay for damages.

While it’s not uncommon for natural gas to escape from North Slope wells, an emergency of Friday’s magnitude is rare, said Lois Epstein, Arctic Program Director for The Wilderness Society, an environmental group in Anchorage.
Something Wrong

“Whenever you have an out-of-control well like this, that means something very serious went wrong,” Epstein said in a telephone interview. “This really needs to be thoroughly investigated to find out what went wrong and whether there’s a danger of it happening again.”

The North Slope is also home to vast underground reserves of natural gas, but the lack of a gas pipeline out of the region has kept companies from bringing any of it to market. The gas, which comes up along with oil, is typically pumped back underground to squeeze more crude oil out of the reservoirs.

The volume of the North Slope leak hasn’t been determined and the cause of the release is unknown, the state’s Department of Environmental Conservation has said. There have been no injuries and no reports of harm to wildlife. The nearest local community, Nuiqsut, located about 50 miles west, has been notified.

“It’s tough to determine collateral impacts at this point, but some incident-related slowdown at Prudhoe Bay seems at least a reasonable risk to consider,” Tudor Pickering Holt & Co., a Houston-based energy investment bank, wrote in a Monday note.

‘Jacked Up’

Emergency crews responding on April 14 discovered the well had “jacked up,” or risen, by three to four feet after the incident, the state said in its latest report. That movement broke a well pressure gauge and temporarily delayed efforts to close off the well, the state said. By Sunday night, the well had settled about 11 inches.

Based on aerial pictures, the release appeared to be contained to the gravel pad surrounding the well head and never reached the surrounding tundra, BP said in an earlier statement. The well has been shut in since Friday.

BP did not immediately respond to questions about how much oil the well typically produces. Candice Bressler, a state spokeswoman, referred production questions to the company.

Alyeska Pipeline Service Co.’s Trans-Alaska Pipeline System, which runs from Prudhoe Bay south to Valdez, isn’t affected by this incident and is operating normally, Michelle Egan, a company spokeswoman, said by telephone Sunday. Alyeska is a joint partnership led by the North Slope’s top producers, BP Plc, Exxon Mobil Corp. and ConocoPhillips.

Alaskan North Slope crude was valued at $1.80 a barrel over U.S. benchmark West Texas Intermediate on Monday, according to data compiled by Bloomberg. It has averaged a $1.16 premium to WTI this year.

============== BP oil well in Alaska spills out of control

Published: Apr 16, 2017 5:25 p.m. ET

An out of control oil well on Alaska's North Slope near Prudhoe Bay continues to spray crude and natural gas into the area for a third day, according to BP PLC, which operates the well.

The London-based energy company said it couldn't quantify how much oil has spilled in the area, because it was still too dangerous for workers to approach the well. Attempts to stop the leak have failed so far. BP and state and federal authorities continued work on Sunday to try to get a handle on the situation.

The amount of oil released from the well is "minor" compared with the volume of natural gas leaking from the well, according to a joint statement by the Unified Command Task Force, which includes BP, the Alaska Department of Environmental Protection, the local government of the North Slope and the U.S. Environmental Protection Agency.

"The well structure is housed in a metal 'well house' which is helping to contain any oil spray," said the joint statement released Saturday.

So far there have been no injuries or reports of harm to wildlife in the area, according to BP.

The leak from the well, located on the frozen tundra of the North Slope, was discovered Friday morning when employees saw crude oil spraying out of the top of it. Natural gas was also being released uncontrollably. Authorities said they don't yet know what caused the well to discharge oil and gas.

As of midday Sunday, BP's well was still leaking and authorities hoped to provide an update later in the day on their efforts to contain it, said Candice Bressler, a spokeswoman with the Alaska Department of Environmental Conservation, or ADEC.

Responders attempted to bring the well under control at the start of the weekend, but the operation failed because of damage to a well pressure gauge, the Alaska Department of Conservation said. Responders determined that the well "jacked up," rising between three to four feet vertically. That movement caused the pressure gauge to break off and prevented operators from pumping anything down into the well in an attempt to seal it off.

BP's operations in and around Prudhoe Bay account for about 55% of Alaska's oil and gas production, according to the company.

The oil giant has had several spills and leaks in Alaska over the years. A 2006 spill due to a corroded pipeline released almost 4,800 barrels of crude, making it the worst oil spill on the North Slope up to that point in time. A 2009 pipeline problem at a BP oil field in the state released almost 1,100 barrels of oil; that rupture and spill was a violation of the Clean Water Act, which meant BP had breached the terms of its plea agreement for the 2006 accident.

In more recent years, BP has faced intense scrutiny over its role in the 2010 Deepwater Horizon disaster in the Gulf of Mexico that killed 11 workers and created the largest offshore oil spill in U.S. federal waters.