Alaska Oil and Gas Conservation Commisssion - Area Injection Order 008.002 ADMINISTRATIVE APPROVAL NO. AIO 8.2

Re:The application of Union Oil Company of California to inject approved wastes from the Dillon Platform for the purpose of disposal into the stratigraphic interval authorized for enhanced recovery by Area Injection Order No. 8.

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

Dear Mr. Ayer:

In correspondence dated January 23, 2003 you state that Unocal considers production operations from the Dillon Platform to no longer be economically viable. Oil production on the platform has been shut in since December 8, 2002. Unocal intends to clean the surface equipment from January through April 2003 and does not intend to resume oil production operations on this structure.

Unocal estimates 50,000 barrels of non-hazardous Class II fluids will be generated by cleaning operations on Dillon. The fluid is expected to be primarily comprised of unfiltered inlet water, produced water, produced oil, sludge, triethyleneglycol, paraffin and asphaltenes. Unocal applied in the above referenced correspondence to dispose of these fluids into two existing Dillon Platform wells. Area Injection Order No. 8 authorizes injection in the Southern 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 Dillon Platform are completed in the disposal interval.

Rule 9 of Area Injection Order No. 8 allows the Commission to administratively amend any rule in the order as long as the operator demonstrates to the Commissionís 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.

Unocal has demonstrated Dillon Platform wells Di-12 and Di-14 have mechanical integrity suitable for disposal injection operations. Di-12 and Di-14 are respectively, a decommissioned waterflood injector and a depleted oil producer. The primary candidate for disposal operations is the Di-12 well with well Di-14 intended as a back-up. Disposal operations in these wells will not cause waste due to the limited volume of injectant and the swept or depleted condition of the reservoir adjacent to these wells.

The portion of aquifers beneath Cook Inlet described by a ľ 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).

Pursuant to Rule 9 of Area Injection Order No. 8 Unocal is authorized to conduct disposal injection operations in Dillon Platform wells Di-12 and Di-14 within the MGS A, B, C, D, E, F, and G Oil Pools. The total volume authorized for disposal is 50,000 barrels.

DONE in Anchorage, Alaska this 29th of January 2003.

Cammy Oechsli Taylor
Chair

Daniel T. Seamount, Jr.
Commissioner

Michael L. Bill
Commissioner

BY ORDER OF THE COMMISSION

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AIO 008.000 / AIO 008.001


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