Jack-Up Oil Rig Cleared to Move to Cook Inlet

A jack-up oil drilling rig is now moving into position to begin exploratory drilling in Cook Inlet.  Steve Sutherlin, Strategic Officer for Texas-based Escopeta Oil, says the company got clearance from Customs and Border Protection to begin moving the rig out of Kachemak Bay early Wednesday morning.  During the next week it will be put in place, the legs will be extended to the sea floor, and the rig will be staffed by a crew of about 54 people to begin drilling.

The company may be in violation of the Jones Act because it used a Chinese cargo vessel to take the rig around South America.  Sutherlin would not offer much comment on what federal authorities may do next.

The Jones Act bars shippers from delivering cargo between U.S. ports on non-U.S.-made vessels.  Escopeta had a waiver from the Jones Act, but it was for a different vessel.  When Spartan, the rig’s owner, grew worried that it might be seized by Customs and Border Protection, Escopeta owner Danny Davis had it unloaded in Canada, and then re-loaded aboard an American barge for its trip into U.S. waters.

If all goes as planned, Escopeta will qualify for at least $25 million in state tax credits for its first well.  There is another $22.5 million for the second well, and $20 million for the third.  Escopeta owner Danny Davis says his expenses are sure to exceed the amount of those credits.

Steve Sutherlin, with the fatigue clear in his voice, says he’s pretty happy to finally see the rig, called the Spartan 151, finally in Cook Inlet.

The geological prospect the company will drill is north of Nikiski and is called the Kitchen Lights Unit.  The rig will have to be pulled up once the Inlet starts icing up.

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