STATE OF ALASKA

ALASKA OIL AND GAS CONSERVATION COMMISSION

333 West Seventh Avenue, Suite 100

Anchorage Alaska 99501

Re:

Application by Marathon Oil Co. for Waiver of Certain Wellhead Equipment Requirements of 20 AAC 25.200 for Sterling Field wells.

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Conservation Order No. 535

Sterling Field: All Pools

October 4, 2004

IT APPEARING THAT:

1. By letter dated August 8, 2004, Marathon Oil Company (“Marathon”), the field operator, applied to the Alaska Oil and Gas Conservation Commission (“AOGCC” or “Commission”) for waiver of certain wellhead equipment requirements of 20 AAC 25.200 for Sterling Field wells.

2. Notice of opportunity for a public hearing on the application was published in the Anchorage Daily News on August 6, 2004.

3. No request for a hearing was received.

4. No written comments on the application were received.

FINDINGS:

1. 20 AAC 25.200 requires that wellhead equipment include valves and gauges on tubing and all well annuli.

2. An AOGCC field inspection revealed that a number of Sterling Field wellheads are not equipped with valves and gauges on all well annuli, and are thus not in compliance with 20 AAC 25.200.

3. The Sterling Field is a mature gas field in which reservoir pressures have declined substantially since production commenced. Well pressures in the Sterling Field are now low relative to other Alaska fields.

4. Low pressure in the inner annulus of Sterling Field wells means that there is little risk of overpressuring the outer annulus.

5. Well tubulars in Sterling Field wells are of sufficient burst pressure rating to contain the full range of reasonably anticipated well pressures.

6. The wellheads of many Sterling Field wells were installed in cellars below ground level, making access to the outer annulus difficult and somewhat hazardous.

CONCLUSIONS:

1. Operation of subject Sterling Field wells without valves and gauges will not compromise well control or safety.

2. Where appropriate, during future well workovers Marathon may retrofit Sterling Field wells with equipment sufficient to bring the subject wells into compliance with 20 AAC 25.200.

NOW, THEREFORE, IT IS ORDERED:

Pursuant to 20 AAC 25.505, Marathon’s application for waiver of 20 AAC 25.200, requiring valves and gauges on all well annuli, is hereby granted. This waiver applies to the following Sterling Field wells:

SU 41-15 SU 32-9

2. Where appropriate, as part of future well workovers, the Commission may require Marathon to retrofit the subject wells with valves and gauges so that the wells comply with 20 AAC 25.200.

DONE at Anchorage, Alaska and dated October 4, 2004.

John K. Norman, Chair
Alaska Oil and Gas Conservation Commission

Daniel T. Seamount, Jr., Commissioner
Alaska Oil and Gas Conservation Commission


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