Monday, August 15, 2011
Alaska Journal of Commerce
by Tim Bradner
Spartan Drilling Co.'s Blake 151 jackup rig arrived Aug. 7 in Cook Inlet and cleared U.S. Customs before proceeding to an exploration location in upper Cook Inlet Aug. 10, a spokesman for Escopeta Oil and Gas Co. said.
The rig waited briefly in Kachemak Bay near Homer, Escopeta spokesman Steve Sutherland said in an interview.
"We [held] in Kachemak Bay until we clear customs and finalize some matters with the state Department of Natural Resources. We expect to be moving the rig to the drilling location in the Kitchen Light Unit," Sutherland said.
Escopeta has most of the permits it needs from the state. "Escopeta has an approved plan of operations from Department of Natural Resources," agency spokeswoman Elizebeth Bluemink said. "We plan an informal inspection after they arrive at the drill site but we don't have any pending DNR permits. What's still pending will come from other agencies, the AOGCC (Alaska Oil and Gas Conservation Commission) drilling permit, for example."
"We approved the plan of operations in July. The plan covers drilling related activities and not the transit period to get to the drill site," Bluemink said.
Escopeta is the main leaseholder in the Kitchen Lights Unit and will be operator of the exploration well.
If the rig moves to the location and successfully spuds the well it will qualify for a special state exploration incentive that will pay up to 100 percent of the first $25 million of costs of the first exploration well drilled with a jackup rig in Cook Inlet. Wells drilled by the same rig are eligible for follow-on incentives for the second and third exploration wells, of 90 percent of costs up to $22.5 million on the second well and 80 percent f the first $20 million for the third well.
However, the wells must be drilled for different companies.
The Blake 151 was towed from Vancouver, B.C. To Cook Inlet by three Foss Maritime Co. tugs. The rig was in Vancouver for several weeks undergoing modifications after being moved to the west Canadian city from the U.S. Gulf of Mexico by a Chinese heavy-left vessel.
The rig movement from the gulf was controversial because Escopeta's original plan was to move it directly to Cook Inlet after obtaining a waiver of the U.S. Jones Act from the Department of Homeland Security.
The rig was diverted to Canada after Homeland Security Secretary Janet Napolitano turned down the waiver request. U.S. Shipping interests who work to protect the Jones Act had urged Napolitano to turn down the waiver.
The Jones Act requires shipments of cargo between U.S. Ports to be made with American-built ships. Escoptea hired the Chinese heavy-lift ship because no U.S. Vessels were capable of moving the rig safely around the tip of South America, where there are rough seas, company president Danny Davis said earlier.
U.S. shipping groups are pushing for a penalty to be imposed on Escopta for a Jones Act violation.
"We expect the customs to issue a significant fine once the rig has completed its transit and positioned for duty in Cook Inlet," said Richard Berkowitz, Director of the Transportation Institute, a Seattle-based maritime industry association.
Even with the rig's voyage on a Chinese heavy-lift vessel terminated in Vancouver, B.C., a Jones Act violation has occurred, Berkowitz said.
Meanwhile, a second jackup rig may soon be headed to Cook Inlet. Buccaneer Energy, an Australian company, is purchasing a heavy jackup rig in Asia for drilling in Cook Inlet waters and elsewhere in coastal Alaska. That rig may be moved to Alaska this winter or by early spring.
Copyright (c) 2011, Alaska Journal of Commerce, Anchorage
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