NEWS BULLETIN

May 16, 2007 --- Vol. 13, No. 45May 2007

BP permitting for Ugnu test at Milne Point

BP Exploration (Alaska) has begun permitting at Milne Point for an extended Ugnu well test operation next year.

Ugnu is the shallowest and heaviest of North Slope oil accumulations and while it is a well-known resource wells to the deeper light oil formations go through the Ugnu the formation is not in production because technical problems of producing the cold, heavy oil which lies in unconsolidated formations have not been solved.

A coastal consistency review noticed May 15 said BP is proposing to add to the existing S pad in the Milne Point unit to create a shallow U-shaped pad for Ugnu testing. Work in 2007 would include gravel placement so that the gravel can compact and settle prior to an extended Ugnu well test operation in 2008, BP told state regulators.

Equipment for the well test operation is being designed and will be the subject of future applications.

The gravel pad expansion will accommodate equipment necessary to perform extended well testing at the Coho 1 well, the pre-pilot application of the cold heavy oil production with sand, or CHOPS, production process for heavy oil in the Ugnu formation.

BP proposes to add gravel to S pad to provide for safe access and the ability of large service equipment vehicles to circumnavigate the pad without the need for backing up long distances.

It also allows for optimal placement of facilities supporting the CHOPS pre-pilot test with the required access and equipment spacing requirements while minimizing the overall disturbance to the tundra. Access to the well row would also be maintained for rigs to facilitate drilling additional wells so existing light oil operations on S pad can be accommodated while the CHOPS production process is being tested.

BP told the state that pre-pilot well testing is expected to be an extended operation, the exact length of which is not now known.


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