What's new in production

	Vol. 225 No. 11
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

North Sea milestone. Norway's Aker Kvaerner (AK) has marked the launch of an ambitious plan to extend the production phase of four North Sea oil fields by about three years, to 2008. The UK Health and Safety Executive (HSE) has accepted the Safety Case submitted by AK Operations, allowing the company, as Duty Holder, to continue to safely operate the AHOO1 installation, 110 mi northeast of Aberdeen. AK Operations took over as Duty Holder of the Amerada Hess/ Talisman owned platform in April of this year, extending the scope of its previous integrated support role, and assuming management responsibility for the installation's day-to-day operations.

HSE's acceptance of the AH001 Safety Case allows AK to launch its “Field life extension plan,” for Ivanhoe, Rob Roy, Renee and Rubie fields in the North Sea, while still seeking yearly improvements in health, safety and environmental performance. AHOO1 is located in UKCS Block 15/21 on the Amerada Hess operated Ivanhoe/ Rob Roy field development, and the installation also processes and exports oil from Renee and Rubie fields, which are operated by Talisman.

The Ivanhoe and Rob Roy fields were originally estimated to contain recoverable reserves of 88 million bbl oil and have a viable life expectancy of 10 years but, in fact, they have already produced more than 180 million bbl over a 15-yr period. Aker Kvaerner Operation's work will exceed UK£60 million ($107 million).

Thermal Hydraulic Engine. Testing and possible application moved forward in mid-year for the Phoenix, Arizona, company Deluge, Inc., whose inventor, Brian Hageman, has developed, over seven years, a new engine concept that works on hot water to power a hydraulic piston that, in turn, operates a hydraulic motor. The pump has many applications besides powering oilwell pumps in marginal-production areas that cannot afford electric motor pumps.

The new pump has been proof tested in Wyoming under a research agreement with the Department of Energy at the Rocky Mountain Oilfield Testing Center, north of Casper. And Prince Manufacturing Corp., of South Dakota, has begun cost analysis of a production prototype.

The system operates as working fluid is heated with hot water, up to 190°F in the heat exchanger, and expands and pushes a piston in the working cylinder which is connected by a common rod to a second piston that compresses the hydraulic fluid. The high-pressure hydraulic fluid then passes through a hydraulic motor which, in turn, rotates a shaft that operates a pump, electric generator or other device. Cold water placed in the heat exchanger then causes the working fluid to contract, readying the piston for another stroke.

Under an agreement with the DOE, the engine will be concept-tested at Deluge's lab in Phoenix. Deluge's first research agreement has led to discussions with oil companies considering ways to lower operating costs for crude oil production. The inventor can be contacted at: bhageman@delugeinc.com.

Final report on Ocean Policy released. On September 20, the US Commission on Ocean Policy delivered its final report, An Ocean Blueprint for the 21st Century, first to the White House, and later to Congress. This delivery marks the culmination of more than three years of extensive work developing recommendations for a comprehensive and coordinated national ocean policy.

According to the Oceans Act of 2000, the President has 90 days to submit a response to Congress regarding the Commission's findings and recommendations. The report is described as a blueprint that calls on the President and Congress, working with the executive agencies, and in consultation with governors, tribal leaders and other stake-holders, to establish a new national ocean policy that balances use with sustainability.

The release ceremony was well attended by representatives from government, the media, industry and environmental groups. On September 21, Commission Chairman, Admiral Watkins appeared before the Senate Commerce, Science and Transportation Committee. In his testimony, he reiterated that the Commission's Final Report echoed the finding of the Preliminary Report, and that the vast majority of public comments received have been supportive and complimentary. For more information about the Ocean Commission and the Final Report, contact NOIA's new Director of Public Affairs, Michael Kearns at: mkearns@noia.org.

More Alaskan gas on the way? More Alaskan natural gas appears headed for the pipeline. The US House and Senate passed loan guarantee provisions that would provide producers with new incentives to build the Alaskan pipeline. The aim is to reduce investor concerns about the non-completion of the line and to provide a series of important regulatory and administrative provisions to speed line construction, all of which was placed in a military construction appropriations bill that cleared both chambers recently. As noted in the October 12, Issue Alert, BP, ExxonMobil and ConocoPhillips would all like to build a pipeline – under the right economic conditions. But say the estimated 10 to 11% projected returns are too little to take on the risks.

The loan guarantee would require the government to pick up 80% of the cost of the first $18 billion of the project should it not be completed. Meanwhile, Congress passed tax provisions to allow gas owners to amortize the cost of all Alaska-built segments of a pipeline from their taxes over seven, instead of 15, years. That change would save line owners an estimated $441 million over the life of the line according to final estimates from the Senate Joint Tax Committee.

This, plus other tax benefits, along with an expedited permitting and streamlined court review process, were structured to encourage producers to invest in the $20 billion project. The pipeline could run from either the Trans-Alaska highway pipeline route to the Lower 48, or it could be an all-Alaska pipeline that will move gas to tidewater in South-Central Alaska where the gas would be liquefied for shipment to West Coast markets.

Alaska wants the gas line to follow the oil pipeline down to Fairbanks, and then go east to Canada. But the Canadians fear that a line from the North that does not include their Mackenzie region would leave them with “stranded” gas. Whether Alaskan oil companies will begin building a pipeline is still unknown, although they have acknowledged that their interests have definitely been piqued.