• Equipment nearly in place, Endeavour rig to head off the dock for Cosmopolitan Unit 3 miles offshore from Anchor Point – if permit obtained, officials say
By Naomi Klouda
Buccaneer Energy Limited intends to move forward with drilling plans at the Cosmopolitan Unit three miles off shore from Anchor Point this winter, the company announced in an update on Tuesday morning.
In a press release coming out of Houston, Buccaneer Energy Limited did not state a date for when the Endeavour Spirit of Independence jack-up rig would be moving off the Homer Deep Water Dock. The Alaska Oil and Gas Conservation Commission must first grant approval in granting a surface rights use permit before the company can drill, but it may be able to move into the area to prepare. The earliest time the surface rights use permit can be granted is the first week in December, according to updates supplied to shareholders and the media Tuesday at noon.
According to the Homer Port and Harbor dock schedule, Buccaneer did not reserve space for the Endeavour jack up rig beyond Nov. 23.
Public affairs spokesman, Jay Morakis of the New York firm MJR Worldwide, could not confirm the Nov. 23 departure date.
If AOGCC does not grant a gas-only determination for Cosmo, a decision will be made either to dock the Endeavour at the Deep Water Dock at Homer or another location until the revised C-Plan is approved. The C-Plan spill contingency would allow Buccaneer to drill into a deeper oil zone at Cosmo, according to Dean Gallegos, a company director who signed the shareholder update that was presented in letter form. The letter was released in addition to a more general news release Tuesday.
In the prepared press statement, distributed by Morakis, the company provided updates on equipment delays that had kept the rig from moving to its drilling locations in Cook Inlet and talked about its permitting status.
“As previously advised, since the Endeavour’s arrival in Homer, Buccaneer has been working with local contractors to complete various rig upgrades and repairs ahead of the final vessel inspection and certification,” the release stated. “The Company is pleased to advise that work on rig is nearing completion and the Endeavour will soon be ready for operations.”
Buccaneer itemized the equipment matters in the update.
• Parts required to address a manufacturer recall for the fast rescue craft were issued after the rescue craft was purchased and installed in Singapore. It has been shipped to location and will be installed in the next few days.
• The general alarm system, which was certified in Singapore, but failed subsequent testing on arrival in Homer, has been updated and the system is now working properly, Buccaneer stated in the press release.
“A new, replacement system has also been delivered and will be installed as future rig operations allow.”
• The Novec firefighting system was installed and certified in Singapore, however, during transit to Alaska a leak developed in a valve that was discovered upon the Endeavour’s arrival, according to Buccaneer. This has been repaired and a new extinguishing agent will be used to refill the bottle that leaked.
Portable extinguishers also were installed at newly requested locations around the rig and an upgrade to the helideck foam system is being finalized to provide more reliable operation during winter work, Buccaneer said.
Much of the catchup work in equipping the rig can be blamed on it having been idle for several years prior to its acquisition Nov.15, 2011.
“Buccaneer and its venture partners, AIDEA and Ezion, deemed it necessary to complete extensive upgrades and repairs to ensure that the rig was ready for safe, long-term operations in Alaska,” the release said. “As such, the rig was dry docked at the Keppel Fels yard in Singapore for six months undergoing repairs and upgrades that have continued in Homer.
But the company continues to hold confidence in the rig itself.
“The Endeavour is a world class Jack-up, and it was essential that we completed comprehensive inspections and testing all of the systems before deployment,” said Andy Rike, EVP Operations. “While it has taken longer than expected, we are nearing completion on all tasks and are fully confident that the rig is ready for safe, environmentally sound operations. Once the permits are approved we will be ready to go.”
Jim Watt, president of Buccaneer, said the company and its venture partners “firmly believe that the Cook Inlet basin remains one of the most underdeveloped hydrocarbon basins in North America, and in the coming years the Endeavour will play a significant role in realizing that potential.”
“The Endeavour will not only revitalize Cook Inlet exploration and development, but with this recent round of upgrades and refitting, the Endeavour is now suitable to support exploration and development operations in the Arctic waters such as the Chukcki Sea,” he said in the prepared statement.
Local environmental watch groups continue to feel skepticism as Buccaneer announces new plans only to have to back-track in delays either due to equipment or permits.
Cook Inletkeeper Advocate Bob Shavelson issued an initial response to Tuesday’s news but limited his comments since he wanted to fact-check permitting status and other assertions made by Buccaneer.
“Buccaneer continues to hide the full story behind its operations. At first they said the upgrades on their rig were unanticipated and beyond their control. Now they confess the needed upgrades since they arrived in Homer have been ‘extensive.,’” Shavelson said. Buccaneer says it “had to adjust its schedule” for drilling in the Upper Inlet, but they don’t mention the state found them in default on those leases, he added.
“Buccaneer continues to paint a rosy picture about getting necessary permits, yet it still has not provided the Homer City Council with the most basic document – the rig’s blow-out contingency plan – as Mr. (Mark) Landt promised. It seems Buccaneer is in over its head, it has relatively few assets, and they’re cobbling together a different story every day.”
Buccaneer initially planned to use the Endeavour earlier this year to drill at its North West Cook Inlet prospect. Necessary permitting and approvals for operations at North West Cook Inlet had largely been secured before the Endeavour arrived in Alaska, according to the company. However, as a result of the delays outlined above, Buccaneer had to adjust its schedule for operations.
“Buccaneer will now initiate its exploration drilling program at the Cosmopolitan prospect, which is located in an ice free zone in lower Cook Inlet,” the release said.
Buccaneer acquired the Cosmopolitan prospect from Pioneer Resources relatively recently, at the end of August. It immediately began the submission process for necessary permitting and approvals shortly thereafter.
“Previous drilling at Cosmo confirmed significant oil and gas potential at the prospect, and the Endeavour is ideally suited for exploring that potential,” said Mark Landt, vice president Land and Business Development. “Since acquiring the Cosmo prospect, Buccaneer has been working diligently to secure all necessary regulatory approvals for drilling operations, and once permitting is secure, the Endeavour will immediately embark for its new location.”
Starting this winter, Buccaneer plans to drill vertical offshore wells to evaluate the shallow gas formations known to be present at the Cosmopolitan prospect. According to Ralph E Davis, the gas prospect has been estimated to have gas with a proved and probable reserve estimate of 90 BCF. If the gas formations are determined commercial during the winter drilling program this year, new gas supplies could be flowing into the southcentral Alaska market in 2014.
Buccaneer hasn’t succeeded in gaining the necessary permissions to drill so far since it arrived Aug. 24 with the Endeavour. But the news release remained highly optimistic. It says in the coming months, Buccaneer plans to drill wells to evaluate the oil potential of the prospect after the Department of Environmental Conservation completes its review and approval of Buccaneer’s comprehensive oil spill response plan.
“Buccaneer is working through the regulatory approval process, and we appreciate the guidance we have received from state and federal regulators,” said Watt. “Buccaneer has made a long-term commitment to Alaska. We see a real future here for the company, and we are intent on working cooperatively will the state to establish a long-term business that will support good jobs, provide tax and royalty revenues to the state and local governments.”
Comments are closed