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Buccaneer rig suffers delays, drilling postponed

Posted: October 10, 2012 - 8:59pm  |  Updated: October 11, 2012 - 8:35am

Buccaneer Energy’s jack-up rig Endeavour-Spirit of Independence will leave the Homer Deep Water Dock and Kachemak Bay by Oct. 31, said Buccaneer vice president Mark Landt.

Landt spoke Monday at a Homer City Council meeting on the West Eagle Drilling Program, another Buccaneer project off East End Road on Basargin Road.

Landt took the opportunity to update the council and city on the Endeavour status.

The 410-foot jack-up rig has been moored at the Deep Water Dock since late August, shortly after it arrived in Kachemak Bay from Singapore. Buccaneer had intended to have the Endeavour refitted and ready to start drilling in Cook Inlet by now.

“We did not expect it to be at the dock in Kachemak Bay for this long,” Landt said. “We ran into some unexpected issues.”

Problems included a recall on parts for its fast-rescue craft, repairs on a general alarm system and other fixes needed to get a Certificate of Compliance from the U.S. Coast Guard, he said.

Buccaneer had planned to drill this fall at the West Unit in upper Cook Inlet. Drilling had to be done by Oct. 31 under state permits regulating drilling in ice-prone areas.

That won’t happen either, Landt said.

Once Buccaneer gets its Coast Guard and other permits, the Endeavour will leave for the Cosmopolitan prospect, another Buccaneer lease off Anchor Point. The Endeavour will put legs down at the Cosmo prospect until it gets drilling permits, Landt said.

Buccaneer has applied for the necessary state and federal permits to work at Cosmo, Landt said outside council chambers after his talk.

“We’re working as fast as we can to get the necessary permits,” he said.

Kyle Smith, policy and legislative advisor for the Alaska Department of Natural Resources, Division of Oil and Gas, said in September that Buccaneer needs a Plan of Operations to drill at the Cosmopolitan Unit and an Oil Discharge Prevention and Contingency Plan, or C-Plan from the Alaska Department of Environmental Conservation for the DNR. It also needs other permits from the Division of Mining, Land and Water; the Alaska Oil and Gas Conservation Commission; the Alaska Department of Fish and Game; the U.S. Army Corps of Engineers for rig siting, and the Kenai Peninsula Borough.

Applying for permits can take from two to three months, Smith said.

Landt said Buccaneer has a permit from the Corps of Engineers. For its C-Plan, Buccaneer plans to file an amendment to its West Unit C-Plan to work at the Cosmo Site.

Bob Shavelson, the advocacy director for Cook Inletkeeper, questioned how Buccaneer could get an amended C-Plan that way.

“I’ve never seen it done,” Shavelson said.

Buccaneer also was questioned about the availability of another jack-up rig in the event it needs to drill a relief well should there be a blow-out, as happened in the Gulf of Mexico. Landt said the Spartan 151 rig owned by Furie Operating Alaska would be available.

Landt said drilling at Cosmo will be a shallow gas well. The prospect had been explored by rigs drilling from land, but Buccaneer is taking a different approach that requires an ocean rig.

“We think the risk of an uncontrollable situation is very, very low,” Landt said.

Cook Inletkeeper also had questioned if by the Endeavour putting its legs down during a storm last month Buccaneer violated the Kachemak Bay Critical Habitat Area management plan. The plan prohibits storing of drilling rigs. In an August 2011 letter to Cook Inletkeeper, Ginny Litchfield, Kenai Peninsula Area manager, Division of Habitat, wrote that the drilling rig storage prohibition “historically referred to rig storage with legs down (in substrate) which had a direct effect on fish and wildlife habitat.”

Fish and Game reviewed the incident and determined putting legs down was the safest method for moorage during a storm, Litchfield wrote in an Oct. 5 letter to Buccaneer.

Fish and Game has not required a Special Area Permit for drilling rig or vessel moorage at the Deep Water Dock and had said so in an April 19, 2011, “no permit required letter” to Buccaneer. However, Fish and Game had not expected Endeavour would have to put its legs down and didn’t include the action in its letter.

Fish and Game won’t be taking any enforcement action against Buccaneer for the Endeavour putting its legs down, Litchfield wrote. Fish and Game understands the Endeavour plans to leave by Oct. 31, Litchfield wrote, but if it doesn’t leave by then, the legs are not lifted or there is significant damage to the habitat, Fish and Game will reassess its options.

Landt also announced that Buccaneer plans to hold future community meetings on the West Eagle Drilling Eagle prospect. Buccaneer has hired Christina Anderson to be its local point of contact and Donna Aderhold to be its “eyes and ears,” Landt said. Anderson can be reached at (855) 865-2298.

As a Plan C, Buccaneer also has applied for a state tideland permit to dock and moor the Endeavour on .54 acres of state land near Port Graham.

 

Michael Armstrong can be reached at michael.armstrong@homernews.com.

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