STATE OF ALASKA

OIL AND GAS CONSERVATION COMMISSION

3001 Porcupine Drive

Anchorage, Alaska 99501-3192
Re:The Application of Arco Alaska Inc.             )  Conservation Order No. 333
and BP Exploration (Alaska) Inc. requesting        )
a modification to Rule 5, Conservation             )  Prudhoe Bay Field
Order 145, dealing with safety valve               )  Prudhoe Oil Pool
requirements.                                      )
                                                      April 15, 1994
                                                      (Rev. April 28, 1994)
IT APPEARING THAT

1. By letter dated August 19, 1993, Arco Alaska, Inc. and BP Exploration (Alaska) Inc. requested modifications to Rule 5, Conservation Order 145.

2. By letter dated September 22, 1993, the Commission requested the operators to consider delaying action on the request until pool rules for the Prudhoe Pool had been consolidated.

3. Upon the applicants' request, the Commission agreed to pursue changes to Rule 5, Conservation Order 145, before consolidating pool rules for the Prudhoe Pool.

4. A notice of opportunity for public hearing was published in the Anchorage Daily News on December 17, 1993.

5. No protests were filed with the Commission.

FINDINGS:

1. The Commission may require surface safety valves (SSV's) or subsurface safety valves (SSSV's), or both, on wells in all areas after notice and an opportunity for hearing. 20 AAC 25.265.

2. Rule 5, Conservation Order No. 145, requires Prudhoe Bay wells to be equipped with a suitable safety valve installed below the base of the permafrost which will automatically shut in the well if an uncontrolled flow occurs.

3. Prudhoe Bay operators historically have installed both SSV's and SSSV's in Prudhoe Bay oil pool wells.

4. Rules regarding safety valve systems are in place for the Kuparuk River, Lisburne, Schrader Bluff, Pt. McIntyre/Stump Island, Niakuk and West Beach oil pools and by regulation for Endicott oil pool. The regulations (20 AAC 25.265) or rules for these pools require both SSV's and SSSV's in wells capable of unassisted flow.

5. The primary purpose of the safety valve system is to prevent uncontrolled flow of hydrocarbons.

6. The SSSV must occassionally be removed to allow passage of certain equipment and performance of well maintenance.

7. Conservation Order No. 258 waived the requirements of 20 AAC 25.280(a) for Prudhoe oil pool wells.

CONCLUSIONS

1. Amending Rule 5, Conservation Order No. 145, to require both SSV's and SSSV's is appropriate and will make this rule consistent with similar rules for other pools on the North Slope.

2. Since Prudhoe Bay operators have previously installed both SSV's and SSSV's in Prudhoe Bay oil pool wells, no hardship will be imposed on the operators by amending Rule 5 to require surface safety valves.

3. Temporary removal of SSSV's to allow passage of certain equipment and performance of well maintenance is a reasonable operational requirement and is in keeping with sound engineering practices.

4. Temporary removal periods need to be defined and a tracking system established to prevent indefinite removal of SSSV's and ensure accountability for their status.

5. Prior approval from the Commission to temporarily remove SSSV's is not necessary if appropriate posting and tracking requirements are adopted and temporary removal periods are defined.

6. With appropriate posting and tracking requirements, temporary removal of SSSV's may occur without causing waste, jeopardizing correlative rights or harming ultimate recovery.

7. Wells that are demonstrated to be incapable of unassisted flow of hydrocarbons do not require a SSSV.

8. Wells used for continuous water injection are incapable of unassisted flow of hydrocarbons.

9. Permanent removal of SSSV's from wells incapable of unassisted flow of hydrocarbons will not cause waste nor jeopardize correlative rights.

NOW, THEREFORE, IT IS ORDERED THAT Rule 5, Conservation Order No. 145, is amended to read:

Rule 5. Automatic Shut In Equipment

a. Upon completion, each well shall be equipped with:

i. a fail-safe automatic surface safety valve (SSV) capable of preventing uncontrolled flow.

ii. 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 determined by a "no flow" performance test witnessed by a Commission representative, is not required to have a fail-safe automatic SSSV.

c. 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.

i. Written notification will be required for those wells that will have SSSV's removed longer than the 30 day period.

ii. Wells with SSSV's removed shall be identified by a clearly visible sign or tag on the wellhead stating that the valve has been removed, reason for removal and the date of removal.

iii. 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 on request.

d. 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 well head and at the manifold building.

i. 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.

ii. 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.

e. 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.

f. 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.

g. 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.

DONE at Anchorage, Alaska and dated April 15, 1994 (Rev. April 28, 1994).

David W. Johnston, Chairman

Russell A. Douglass, Commissioner

Tuckerman Babcock, Commissioner

Conservation Order Index