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ConocoPhillips (COP) Reduces Alpine Oilfield Crude Production

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ConocoPhillips’ (COP - Free Report) Alpine oilfield in Alaska has reduced crude production after a natural gas leak persisted for at least 11 days, per a report by Reuters.

Located 34 miles west of Kuparuk, Alpine is one of the biggest conventional onshore oil fields developed in North America.

The subsurface leak was found at CD1, the oldest drill pad and production site in the Alpine oilfield. ConocoPhillips cited that no leaked gas has been detected beyond the CD1 production pad. Some of the company’s workers were removed from the facility as a precaution.

CD1 well production was discontinued after the leakage was discovered. Notably, limited information was provided regarding the alleged cause or how much gas has been released since it was first discovered.

Per the Alaska Department of Revenue, ConocoPhillips’ Alpine unit produced 51,000-58,000 barrels of crude oil per day in February. Crude production declined to 36,861 barrels per day after the leak was detected. ConocoPhillips has developed a strategy to keep most of the field production flowing. It is mobilizing a drill rig to effectively implement mitigation measures of the gas leakage at CD1.

The gas leak follows a new court-mandated environmental assessment by federal officials for ConocoPhillips’ Willow project west of Alpine. The Willow oil development is expected to produce up to 160,000 barrels of oil per day. The project has been stuck in court after a federal judge canceled the Trump administration’s approvals after finding flaws with the project’s environmental analysis.

The past few years have witnessed enormous property damage losses across the energy sector. The main causes for damages have been fire and explosions, commonly associated with a leak of hydrocarbons related to maintenance problems or faulty equipment.

Kinder Morgan Inc's (KMI - Free Report) El Paso natural gas pipeline system was partly shut down in December after a deadly explosion ruptured the pipeline. The incident occurred near Coolidge, AZ, which unfortunately killed two people and injured one.

The rupture on the 30-inch Line 2000 forced Kinder Morgan to reduce pressure on the pipeline. As a result, it reduced gas flows to California at a time of greater demand for the fuel. Natural gas flows declined from 0.8 billion cubic feet per day (bcfd) to 0.65 bcfd. Notably, one billion cubic feet is enough gas for 5 million homes per day in the United States.

Another oil major Exxon Mobil Corporation’s (XOM - Free Report) Baytown refinery in Texas was producing at reduced rates after a fire broke out at a reformer feed hydrotreater on Dec 23. The Baytown refinery is one of the largest refining and petrochemical facilities in the United States, with a crude processing capacity of 560,500 barrels per day.

This was the second fire at the Baytown refinery in two years. A lawsuit was filed against ExxonMobil as a group of nearby residents claimed that their houses were destroyed by the oil refinery fire. ExxonMobil can face additional lawsuits if officials realize that the company has been negligent in its operations or maintenance at the Baytown refinery.

A fire at the crude distillation unit (“CDU”) of Shell plc's (SHEL - Free Report)  Norco refinery delayed the plant's restart last year. Apart from producing gasoline, diesel and jet fuel, the Norco refinery produces ethylene and propylene, which move to the adjoining Shell Norco chemical plant and Geismar plant in Louisiana.

Shell was in the process of restarting the 240,000-bpd CDU when the fire broke out.The cause of the fire was not revealed. The refinery was also damaged by Hurricane Ida, which crossed over Norco. A day before the hurricane struck, the refinery was shut.