STATE OF ALASKA
OIL AND GAS CONSERVATION COMMISSION
3001 Porcupine Drive
Anchorage, Alaska 99501-3192

Re: The APPLICATION OF BP Exploration)             Disposal Injection Order No. 12
        (Alaska) Inc. (BPX) for disposal              )
        of Class II oil field wastes by                      )
        underground injection in the Badami        )
        Unit wells WD-1 and WD-2.                       )
                                                                                                 August 5, 1997

IT APPEARING THAT:

 1. By correspondence dated May 22, 1997, BPX requested authorization from the Alaska Oil and Gas Conservation Commission (AOGCC) to inject Class II waste fluids into the Badami Unit WD-1 and WD-2 wells.

 2. The AOGCC requested additional information June 11, 1997. BPX provided the requested information on June 18, 1997.

 3. Notice of opportunity for public hearing was published in the Anchorage Daily News on May 30, 1997.

 4. The Commission did not receive a protest or a request for a public hearing.

 FINDINGS:

 1. BPX is the operator of the Badami Unit. There are no other operators within a one-quarter mile radius of the proposed disposal injection project.

 2. The State of Alaska is the only surface owner within the Badami Unit.

 3. The Badami Unit WD-1 disposal well (WD-1) will be the first well drilled from the unit's single development pad. BPX does not propose to drill any other well within a one-quarter mile radius of the WD-1 penetration of the disposal injection zones.

 4. BPX may drill an additional disposal well designated WD-2. BPX does not propose to drill any other well within a one-quarter mile radius of the WD-2 penetration of the disposal injection confining zones.

 5. Logs from the Badami No. 4 exploratory well may be used to define the disposal and confining zones in the Badami Unit.

 6. BPX proposes to conduct disposal operations in the Badami Unit within the Ugnu and Sagavanirktok Formations.

 7. The Ugnu Formation consists of Eocene aged, predominately coarse grained, fluvial and shallow marine sediments. The interval is present within the Badami No. 4 well from 7440'-7720' measured depth (MD). It has an average porosity of 27%, an average permeability of 350 millidarcies and an average net to gross ratio of 50%.

 8. The Sagavanirktok Formation includes a basal unit which consists of Eocene to Oligocene aged, predominately fine grained marine sediments. The interval is present within the Badami No. 4 well from 5526'-7440'-MD.

 9. A regionally extensive, dominantly shale interval within the basal Sagavanirktok Formation is present within the Badami No. 4 well from 5526'-5926' MD. This interval contains an aggregate thickness of shale in excess of 250'.

 10.The basal Sagavanirktok Formation also contains numerous intervals of laterally extensive sandstones. The log character of these sands is similar to those which have demonstrated a large capacity to accept disposal fluids in other North Slope Fields.

 11.Most of the Class II disposal fluids from other North Slope Fields has been confined by similar lithologic and stratigraphic intervals as those present within the Ugnu and basal Sagavanirktok Formations underlying the Badami Unit.

 12.Overlying the basal Sagavanirktok Formation, between 4450'-5526' MD interval in the Badami No. 4 well, is an interval of approximately 65 percent highly porous and permeable, laterally continuous, fluvial to shallow marine sandstones.

 13.A predominately mudstone interval exists between 3892'-4450' MD within the Badami No. 4 well. It is considered the shallowest potential confining zone in the well. The gross lithologic character of this interval is persistent through the proposed WD-1 and WD-2 vicinity.

 14.The 3892'-5526' MD interval in the Badami No. 4 is designated the middle member of the Sagavanirktok Formation for the purposes of this order.

 15.BPX does not plan to inject fluids within the middle member of the Sagavanirktok Formation unless injection in the Ugnu-basal Sagavanirktok Formation interval is unsuccessful.

 16.BPX will run cement quality logs within the surface casing and long string of each well. The Commission will evaluate the logs and cement records to determine the adequacy of the cement to isolate disposal intervals.

 17.Completion plans entail 20'' conductor set at 110' subsea (SS), 13 3/8'' surface casing set at +/-4230' SS and cemented to surface and a long string of 9 5/8'' casing set at +/-7500' SS and cemented back into the surface casing.

 18.BPX will test tubing and casing integrity according to 20 AAC 25.412 prior to initiation of disposal operations and every two years thereafter.

 19.Disposal material will consist of Class II fluids generated from drilling, production, workover and completion operations. The typical disposal stream will consist of seawater, produced and fresh water, drilling mud, drill cuttings, workover fluids, stimulation materials, vessel cleaning material, formation sand, cement and other nominal Class II waste. Constituent volumes will vary depending on drilling, workover, stimulation and maintenance activity.

 20.BPX expects to dispose of approximately 12,500 cubic yards (60,100 barrels) of solids during the life of the project.

 21.Average disposal rate will be nominally 3000 BPD (~2 BPM) during development drilling and at other peak periods. The operator expects to average 300 to 500 BPD over the project life. Maximum instantaneous disposal rate is anticipated to be about 5 BPM.

 22.Maximum operating pressure will vary depending on depth and the condition of the formation. Surface pressure is expected to range from 1800-3300 psi when disposing in the Ugnu-basal Sagavanirktok interval, with a corresponding bottom hole pressure (BHP) of 4950-6450 psi. In the mid-Sagavanirktok disposal intervals, estimated surface pressures will be 1300-2800 psi and estimated BHP 3500-4900 psi.

 23.BPX expects to maintain injectivity by occasionally stimulating the disposal interval. Stimulation activity will entail pumping solid free fluid to disperse solids, chemical treatments and elevating pressure to breakdown the disposal interval.

 24.Fracture propagation within the disposal interval is an integral part of the process of placing waste fluids into the disposal interval. Fractures will be created as the disposal zone begins to plug. Fractures or disaggregation of the clogged pores and rock matrix provide pathways to transport waste fluids to undamaged storage volume within the disposal zone.

 25.Estimates of likely vertical growth of fractures in the upper disposal interval is approximately 250', based on rate and volume estimates.

 26.Periodic surveillance of disposal operations will ensure waste fluids are contained within the disposal interval. Surveillance methods include temperature surveys, pressure transient tests, step rate tests, thermal decay time logs, disposal rate and pressure monitoring, mechanical integrity tests and tagging effective depth to determine fill buildup.

 27.Reservoir surveillance techniques will also be used for tracking near wellbore fluid movement, estimating dimensions of disposal fracture or disposal storage volume and detecting changes in disposal zone characteristics.

 28.Evaluation of operation performance and reservoir surveillance will aid in preventing fracturing of the confining zones.

 29.BPX calculated formation fluid dissolved solid content from existing well control within the Badami Unit through analysis of geophysical logs calibrated to a single water sample from 4982' MD in the Badami No. 5 well. Calculated salinity of formation waters ranged from 18,000 mg/liter to 48,000 mg/liter for formations between 2000' and 7,200' SS.

 30.The U.S. Environmental Protection Agency (EPA) determined aquifers with total dissolved solids of less than 10,000 mg/liter are not present within the Badami Unit in either the Ugnu or the Sagavanirktok Formations.

 31.In correspondence dated May 12, 1997, the EPA notified BPX of its determination that no underground sources of drinking water (USDWs) were present in the Badami Unit.

 CONCLUSIONS:

 1. The requirements of 20 AAC 25.252 have been met.

 2. There are no USDWs present underlying the Badami Unit.

 3. Waste fluids authorized for disposal under this order in the Badami Unit will consist exclusively of Class II waste generated from drilling, completion, workover and production operations.

 4. Permeable strata which reasonably can be expected to contain the total volume of disposal fluids anticipated for this project are present in the Ugnu-basal Sagavanirktok Formation in the Badami Unit.

 5. Movement of waste fluids will be confined within appropriate receiving intervals by confining lithology, cement isolation of the wellbore and operating conditions.

 6. Periodic fracturing and stimulation will be required to place solids into the disposal interval. Fracture growth can be contained within the disposal interval by controlling the rate and volume of injection.

 7. Surveillance of disposal material movement, monitoring of operating parameters and demonstration of mechanical integrity every two years will ensure the materials are contained within the disposal interval. Changes in baseline data may be an indication that fluid is escaping beyond the designated confining zone.

 8. In the event disposal injection within the Ugnu - basal Sagavanirktok Formation interval is unsuccessful, alternative receiving and confining zones exist within the middle member of the Sagavanirktok Formation, which may serve as a secondary disposal zone.

 9. Badami Unit disposal wells will be constructed and demonstrate mechanical integrity in accordance with the requirements of 20 AAC 25.412.

 10.Disposal injection operations in the Badami Unit will not cause waste, jeopardize correlative rights, or impair ultimate recovery.

 NOW, THEREFORE, IT IS ORDERED THAT:

 Rule 1 Authorized Injection Strata for Disposal.

 Class II oil field fluids may be injected in the Badami Unit WD-1 and WD-2 wells, in conformance with Alaska Administrative Code Title 20, Chapter 25, for the purpose of disposal into strata which correlates with the Ugnu-basal Sagavanirktok Formation intervals between 5926'-7720' MD and the mid-Sagavanirktok Formation between 4450'-5526' MD in the Badami #4 well. Disposal injection within the mid-Sagavanirktok Formation must be specifically approved by the Commission, and may be further conditioned by administrative action after review of injection performance in the Ugnu-basal Sagavanirktok Formation.

 Rule 2 Demonstration of Tubing/Casing Annulus Mechanical Integrity

 The tubing/casing annulus must be tested every two years for mechanical integrity in accordance with 20 AAC 25.412.

 Rule 3 Well Integrity Failure

 Whenever disposal rates and/or operating pressure observations or pressure tests indicate pressure communication or leakage of any casing, tubing or packer, the operator must notify the Commission on the first working day following the observation, obtain Commission approval of a plan for corrective action and obtain Commission approval to continue injection.

 Rule 4 Surveillance

 A baseline temperature survey from surface to total depth, initial step rate test to pressures equal or exceeding maximum injection pressure and pressure falloff are required prior to initiation of disposal injection. Regular fill depth tags are required at least once annually or as warranted following consultation with the Commission. Operating parameters including disposal rate, disposal pressure, annuli pressures and volume of solids pumped must be monitored and reported according to requirements of 20 AAC 25.432.

 An annual performance report will be required including rate and pressure performance, surveillance logging, fill depth, survey results, and volumetric analysis of the disposal storage volume, estimate of fracture growth if any and updates of operational plans. Report submission will be on or about July 1.

 Rule 5 Administrative Action

 Upon request, the Commission may administratively revise and reissue this order upon proper showing that any changes are based on sound engineering practices and will not allow waste fluids to escape from the disposal zone.

 DONE at Anchorage, Alaska and dated August 5, 1997.
_____________________________________
David W. Johnston, Chairman
 _____________________________________
Robert N. Christenson, P.E., Commissioner

 Disposal Injection Order No. 12
August 5, 1997

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