Commission considers fining BP over Prudhoe valve failures

ANCHORAGE (AP) -- State regulators are considering fines or other enforcement action against BP Exploration (Alaska) Inc. because of high failure rates on wellhead safety valves at Prudhoe Bay.

The Alaska Oil and Gas Conservation Commission has ordered the oil company to explain by March 1 how it will improve monitoring and maintenance of more than 1,000 valves at the North Slope's biggest and oldest oil field.

''We want to make sure that they are going to follow up,'' Cammy Oechsli Taylor, the commission's chairwoman, told the Anchorage Daily News Thursday.

The surface safety valves sit atop Prudhoe oil wells. They are designed to automatically shut down a well if pressure drops because of leak downstream.

The commission requires oil companies to test the valve systems every six months. But if a group of safety valves on a well production pad are found to have an average failure rate of more than 10 percent, the state requires more frequent testing.

That happened to the western side of Prudhoe Bay in 2000 and early 2001. The commission found high failure rates on wellhead valves at six of the 24 production pads. Four of those pads failed consecutive tests, the commission said.

''Something seemed to have fallen through the cracks,'' Taylor said.

The commission looked at wellhead valves at other North Slope oil fields and found more problems.

From January 2000 through April 2001, of the roughly 5,000 tests on North Slope wells, about 5 percent failed.

At Kuparuk, the Slope's second-biggest field, 13 of 44 pads tested had failure rates above 10 percent. High failure rates were also found at the smaller fields of Badami, Milne Point and Lisburne.

Phillips Alaska Inc., which operates Kuparuk, fixed the problems and does not face enforcement action, Taylor said.

At Prudhoe, BP officials told the commission that ''insufficient communication'' within the company and not reviewing testing data contributed to the failures. The company is fixing the problems, BP spokesman Ronnie Chappell said.

''I'm not going to tell you that we have licked the problem, but we have shown improvement,'' he said.

The commission said multiple retesting of problem valves from April through the end of last year found only one Prudhoe Bay pad with a failure rate above 10 percent.

Taylor said BP could face fines under an enforcement action but said the agency has not decided whether it will punish the company. Fines could range as high as $5,000 per violation each day.

The action comes as the state's Department of Environmental Conservation is considering fining BP for taking too long to install systems to detect oil leaks on some of Prudhoe's pipelines.

BP has run the western half of Prudhoe for years. In 2000, it took over the eastern half as well.

Faulty valves have not led to any known problems since the testing began. But in October 1998, a leaking valve prolonged a fire after an oil processing building exploded at Z Pad. Debris apparently kept that valve from closing.