NEWS BULLETIN

June 13, 2001 --- Vol. 7, No. 68June 2001

BP to permanently restrict drilling at Northstar

BP Exploration (Alaska) Inc. will be permanently restricting drilling at Northstar to the winter season. The company has applied to the Alaska Department of Environmental Conservation to eliminate one of three Beaufort-class barges required for its oil discharge prevention and contingency plan in exchange for permanent seasonal restrictions on drilling activity at the island.

DEC said BP has applied "to implement seasonal drilling restrictions into routine development planning for production at Northstar." The agency said the change "reduces the risk of a major blow out event during freeze-up, open water and break up."

BP Exploration (Alaska) spokesman Ronnie Chappell told PNA that BP is living with the restrictions now and "we've determined that it makes sense to extend them." Even with the restrictions, he said, BP will "be able to develop the field economically and still bring it online later this year." The startup date will not be affected, he said, and peak production of 65,000 barrels per day will still be achieved early in 2002 and maintained while the field is drilled up, although there may be some impact on how long it takes to complete the drilling program.

BP is proposing to release one of three Beaufort-class barges and the associated point-class tug required as a condition of approval of its Northstar oil discharge prevention and contingency plan.

The amendment to the oil discharge prevention and contingency plan would prohibit "the drilling of new wells or sidetracks from existing wells into major liquid hydrocarbon zones during the defined period of broken ice and open water" beginning June 13 and ending with the presence of 18 inches of continuous ice cover for one-half mile in all directions from the Northstar production island. BP will present reservoir information to the Alaska Oil and Gas Conservation Commission for a determination of which stratigraphic zones represent major liquid hydrocarbon accumulations. The AOGCC determination will be submitted to DEC for concurrence and approval of broken ice and open water drilling programs.

BP is still working with the AOGCC "to determine where the major hydrocarbon zones are and to determine how much drilling could be done above those zones during the broken ice and open water period," Chappell said.

Typically, he said, the restrictions look much the same as they do now taking effect in early summer and lasting until about November. Chappell noted that BP "had always anticipated that there would be a pause in drilling this year as we prepared the island to receive the large production modules being fabricated in Anchorage."


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