Alaska Oil and Gas Conservation Commisssion - Area Injection Order 007.002 ADMINISTRATIVE APPROVAL NO. AIO 7.2

Re: The application of Union Oil Company of California to inject approved wastes from the Baker Platform for the purpose of disposal into the stratigraphic interval authorized for enhanced recovery by Area Injection Order No. 7.

Philip M. Ayer
Advising Petroleum Engineer
UNOCAL Corp.
P. O. Box 196247
Anchorage, Ak 99501

Dear Mr. Ayer:

In correspondence dated February 18, 2003, you state that Unocal considers production operations from the Baker Platform to be uneconomic. Unocal stopped injection for enhanced recovery on October 6, 2002. Oil is still being produced, however it is likely that all platform operations will be ended before 4th quarter 2003 and quite possibly before the end of 2nd quarter 2003. When oil production is stopped, Unocal intends to clean the wellbores and surface equipment. It is the Commission’s understanding that Unocal does not intend to resume oil production operations on this platform.

Unocal estimates that up to 50,000 barrels of non-hazardous Class II fluids will be generated by cleaning operations on Baker. The fluid is expected to be primarily comprised of unfiltered inlet water, produced water, produced oil, sludge, triethyleneglycol, paraffin, asphaltenes and deck drainage due to rainfall on the platform. Unocal applied in the above referenced correspondence to dispose of these fluids into three existing injection wells (Ba-16, Ba-17 & Ba-12) on Baker Platform. Area Injection Order No. 7 authorizes injection in the Northern Portion of the Middle Ground Shoal Field. Disposal injection is authorized by this order in the upper portion of the Tyonek Formation. Currently, no wells on the Baker Platform are completed in the disposal interval.

Rule 9 of Area Injection Order No. 7 allows the Commission to administratively amend any rule in the order as long as the operator demonstrates to the Commission’s satisfaction that sound engineering practices are maintained and the amendment will not result in an increased risk of fluid movement into an underground source of drinking water.

Until the enhanced recovery operations were halted, Baker Platform wells Ba-12, Ba-16 and Ba-17 were operated in compliance with AIO 7 and 20 AAC 25.404 and 25.412. Ba-17 has full mechanical integrity, as demonstrated by most recent MIT performed September 26, 2002, and witnessed by AOGCC Inspector Lou Grimaldi. Ba-16 has been operating as a “waivered injector” due to tubing to IA communication, although Inspector Grimaldi also witnessed an MIT on Baker 16 on September 26, 2002 and reported that the well passed. Ba-12 is a dual injector completion with injection only via the long string. Since the end of May, 1998, treated platform effluent water has been also injected into the well as approved by Sundry 398-140. Ba-12 is also of note since it is a “lease line” injector straddling the line between the Unocal property and Cross Timbers Operating Company property.

Based on the pressure monitoring information it is indicated that the injected fluids are entering the intended formation. Unocal has not identified a preferred well for the disposal operations, and considers any of the three wells acceptable. The AOGCC concurs with regard to Ba-16 and Ba-17, however given the present use of the well and its location between the operating properties waste should not be disposed into Ba-12.

The portion of aquifers beneath Cook Inlet described by a ¼ mile area beyond and lying directly below the middle Ground Shoal Field are exempted for Class II injection activities by 40 CFR 147.102(b)(2)(B) and 20 AAC 25.440(c). Disposal operations in these wells will not cause waste due to the limited volume of injectant and the swept condition of the underlying reservoirs that surround these wells.

Unocal’s correspondence demonstrates that the proposed injection wells have mechanical integrity, and that injection of non-hazardous Class II fluids into strata authorized for enhanced recovery injection by AIO No. 7 will not result in an increased risk of fluid movement into an underground source of drinking water. Pursuant to Rule 9 of Area Injection Order No. 7 Unocal is authorized to conduct disposal injection operations into the strata authorized for enhanced recovery within the MGS A, B, C, D, E, F, and G Oil Pools. The total volume authorized for disposal is 50,000 barrels. Specific approval to convert any of the candidate wells to disposal service must be requested by sundry notice.

DONE in Anchorage, Alaska this 19th of March 2003.

Sarah K. Palin
Chair

Daniel T. Seamount, Jr.
Commissioner

Randy Ruedrich
Commissioner

BY ORDER OF THE COMMISSION

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AIO 007.000 / AIO 007.001


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