Oil and gas watchdog again fines Hilcorp for North Slope violation

Alaska’s oil and gas regulator has fined Hilcorp Alaska $86,000 for an overdue test intended to detect conditions that could cause a blowout.

According to a decision published Friday by the Alaska Oil and Gas Conservation Commission, Hilcorp was required to perform a pressure test on an injection well in the McArthur River oil field no later than January 2024, but the test didn’t take place until March.

That pressure test is supposed to take place every four years, under the terms of an area injection order issued in 1986 by the commission, which is in charge of preventing oil and gas waste.

“Hilcorp’s failure to demonstrate the mechanical integrity of the M-30 injection well within the required four-year cycle violated AIO 5. Violating an AOGCC order, like AIO 5, makes Hilcorp liable for civil penalties pursuant to AS 31.05.150(a),” Friday’s order stated, referring to the Alaska statute that the commission operates under.

AOGCC proposed a $50,000 fine for the missed test and an additional $36,000 because Hilcorp kept the injection well operating for 24 days with an overdue test.

“Hilcorp’s failure to comply with the (1986) AOGCC order raises the potential for similar behavior with more serious consequences,” Friday’s order stated.

Since 2020, Hilcorp has been the second-largest oil and gas producer on the North Slope, behind only ConocoPhillips Alaska.

Since the start of this year, Hilcorp has been the subject of four different enforcement actions, AOGCC records indicate. During that period, there has been only one involving a different North Slope company, Oil Search Alaska.

Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.