Homer Alaska - Business

Story last updated at 10:34 AM on Wednesday, August 29, 2012

Rig arrives in Homer

Endeavour to receive minor modifications before heading north

By Brian Smith
Morris News Service - Alaska


Photo by Michael Armstrong

The Endeavour jackup rig, hauled by the Kang Sheng Kou, arrives in Kachemak Bay about 2:30 p.m. Friday as it rounds the end of the Homer Spit.

The Endeavour-Spirit of Independence jack-up rig arrived in Cook Inlet waters last Friday afternoon.

By 2:30 p.m. the rig, carried by the heavy-lift vessel Kang Sheng Kou, pulled into Kachemak Bay, signaling the end of its long journey from Singapore to near the area where Buccaneer Energy will use it to explore for oil and gas deposits.

"It's here," Homer City Manager Walt Wrede said.

On the high tide Wednesday afternoon, the rig was to be floated off the Kang Sheng Kou and pulled into the Homer Deep Water Dock by three tugs for repairs and modifications, said Richard Loomis, an associate with JMR Worldwide, a firm handling public relations for Buccaneer.

The Kang Sheng Kou is a semi-submersible ship that sinks slightly so the Endeavour can float off. Coordinating the offloading with the Kang Sheng Kou moving away and tugs towing the jack-up rig off is like a ballet, Loomis said. After offloading, the Endeavour will dock at the Homer Deepwater Dock for repairs and upgrades, Loomis said. The jack-up rig is scheduled to leave Homer Friday.

The rig will be towed to its first stop at Buccaneer's leases in the Northwest Cook Inlet Unit, which is located near ConocoPhillips' Tyonek platform.

After the rig drills one well in the Northwest Cook Inlet unit, it will seek to drill another if time allows, Loomis said. If not, it will be towed to the Cosmopolitan project — an oil and gas field located in 50 feet of water in Cook Inlet near Anchor Point — for winter drilling operations. The Cosmo unit, which was recently acquired from Pioneer Natural Resources in a partnership with BlueCrest Energy, is usually clear of ice in the winter.

Loomis said the modifications were things Buccaneer originally planned to do during the winter but recently decided to get out of the way to allow it to start operating on the Cosmo without delay.

The Endeavour is about twice the size of Furie Operating Alaska LLC's Spartan 151 jack-up rig brought to Cook Inlet last summer, Loomis said. The rig's legs are 410 feet tall and it can drill faster and deeper than the Spartan, Loomis said.

"It is really impressive — it's really tall and those legs look like skyscrapers," Wrede said.

Loomis said the rig is "state of the art."

"This is an incredibly large piece of equipment and it has been specifically modified to operate in the Cook Inlet," Loomis said.

The Endeavour was previously commissioned to drill on the Pacific Rim after a North Sea campaign and was later stacked, which is an oil term for securing and putting the rig in storage for several years, he said.

Upgrades made on the Endeavour over the summer in Singapore will allow it to operate in the Chukchi and Beaufort Seas.

"In doing so, we created a fit for purpose rig for operations in the waters in and around Alaska," Loomis said.

Buccaneer is committed to drilling four wells on their Cook Inlet prospects over the next several years with the Endeavour before it plans to lease the rig out to other Cook Inlet or Arctic operators.

"It is one of those things where we brought the keys to unlock the resources that have been there," he said. "Now it will be a case of scheduling — who is going to go second, who is going third."

The rig also could be used to drill relief wells in the event of a disaster caused by other drilling activity in the Arctic, Loomis said.

"This is one that really can stand there and be on reserve should the unthinkable happen," he said.

Bryan Hawkins, Homer port director and harbormaster, said he is used to having large barges at his dock, but a jack-up rig is a first. The Spartan 151 docked in Port Graham before it headed to the Kitchen Lights Unit in early August last year.

"We've never had one moored to the dock before," he said. "We've been talking with this company for, gosh, it seems like a year now about the possibility of bringing it in here. This is a good trial run for a few days to see how things come together."

Hawkins said he was pleased the company chose Homer as its dock and was ready to facilitate its needs. The rig will rack up an $871 per day harbor fee when it docks, Hawkins said.

"We can't charge for height, otherwise, oh boy, we'd really be running it up," he said.

However, those harbor fees would be a "drop in the bucket" compared to the amount of money likely generated for local contractors working on its modifications, he said.

"There will be teams of welders and who knows, engineers and electricians and it just goes on and on, taking the opportunity because it's difficult for them to get dock time with a vessel like this," he said.

Wrede said "folks are excited about the jobs."

"There is a large segment of the community that does like to show their support for the oil and gas industry here," he said. "I think some people will be concerned because it is a critical habitat area and they're concerned about oil and gas development in this area, but overall I think the response is positive."

Brian Smith is a reporter for the Peninsula Clarion. Homer News reporter Michael Armstrong contributed to this story.