BP Plc is working to secure an ongoing natural gas leak in a well on Alaska’s North Slope that also sprayed crude oil for three days before that release was capped. The plan is to close the well, state officials said.
The crude spray onto the well pad was discovered Friday morning, and capped on Sunday. A second leak at the well was emitting gas at a reduced rate, according to a statement Sunday by the state’s Department of Environmental Conservation. Well pressure is being monitored and excess pressure is being bled off to keep it within a safe range.
The company is putting together a plan to plug the gas leak, the statement said. Once that occurs, “well-killing operations can take place,” according to the DEC. The well is part of the Prudhoe Bay field, which in March produced an average 315,395 barrels a day, according to data from the Alaska Department of Natural Resources.
“At the risk of stating the obvious, we believe a well that still requires kill operations continues to experience some level of uncontrolled flow,” Tudor Pickering Holt & Co., a Houston-based energy investment bank, wrote in a Monday note. “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.”
Output Boost
The leak comes as the remote North Slope, once home to America’s biggest oilfields, has seen signs of a resurgence as producers work to boost output from aging wells and extend their reach to new supplies. North Slope production 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.
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.
The specific volume of the North Slope leak hasn’t been determined and the cause of the release is unknown, the department 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
Boots and Coots Services Inc., a well-control firm, will assist in operations to kill the well, according to the state DEC statement.
Based on aerial pictures, the release appears to be contained to the gravel pad surrounding the well head and hasn’t reached the surrounding tundra, BP said in a statement. The well has been shut in since Friday and the response is ongoing, BP spokeswoman Dawn Patience said by email Sunday.
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.