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Buccaneer commits to Cook Inlet drilling this winter -- but when?

Naomi KloudaHomer Tribune
Courtesy Peter Law

HOMER -- Buccaneer Energy Limited intends to move forward with drilling plans three miles offshore from Anchor Point this winter, the company announced on Tuesday. 
In a press from the company’s Houston headquarters, the company did not commit to a date for when the Endeavour jack-up rig would move from the Homer Deep Water Dock, however.

The Alaska Oil and Gas Conservation Commission (AOGCC) must first grant the company a surface-rights use permit before the company can drill, and that won’t happen before the first week of December.  But the company could move into the area early to prepare.

According to the Homer Port and Harbor dock schedule, Buccaneer did not reserve space for the Endeavour jack-up rig beyond Nov. 23. But Buccaneer spokesman Jay Morakis would not confirm any departure date.

If AOGCC does not grant a gas-only permit, a decision will be made either to dock the Endeavour at the Deep Water Dock at Homer or another location until a revised plan is approved.

'Work nearing completion'

In the prepared press statement, distributed by Morakis, the company provided updates on equipment problems that have kept the rig from moving to its drilling location in Cook Inlet.

“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. “That work is nearing completion, and the Endeavour will soon be ready for operations.”

Buccaneer itemized the equipment issues in its update.

• Parts required to address a manufacturer recall for the rig’s fast-rescue craft were issued after the rescue craft was purchased and installed in Singapore, where the rig was located before being moved to Homer. It will be installed in the next few days.

• The alarm system was certified in Singapore but failed subsequent tests  in Homer. It has been updated and is now working properly, Buccaneer said. 

• The Novec firefighting system developed a leak developed in a valve enroute to Alaska, 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.

Much of the repairs are due to the fact the rig had been idle for several years before Buccaneer bought it about a year ago, according to the company.

“The company continues to hold confidence in the rig itself. The Endeavour is a world-class jack-up rig, and it was essential that we completed comprehensive inspections and testing all of the systems before deployment,” said Andy Rike of 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.”

Committed to Cook Inlet 

Jim Watt, president of Buccaneer, said the company and its 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 Chukchi Sea,” he said in the prepared statement.

Skeptical environmentalists

Local environmental groups remain skeptical. 
“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,’ ” said Bob Shavelson of Cook Inletkeeper.  
“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.  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, 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 at the end of August.

Gas flowing by 2014?

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, the company’s vice president land and business development.  

Starting this winter, Buccaneer plans to drill vertical offshore wells to evaluate the shallow gas formations believed to be present at the Cosmopolitan site.  If the gas formations are determined commercial during this winter’s drilling program, new gas supplies could be flowing into the southcentral Alaska by 2014.

“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.”

Naomi Klouda is a reporter with the Homer Tribune. To read her full report, click here. Used with permission.