NEWS BULLETIN

November 30, 2010 --- Vol. 16, No. 110November 2010

BP taking timeout for rig review at Liberty

BP is taking a timeout on its Beaufort Sea Liberty project in order to address design and engineering of the huge land-based rig it had Parker Drilling fabricate for Liberty’s ultra-extended-reach drilling program.

According to an interview with BP’s Alaska spokesman Steve Rinehart this morning, the company is going to “suspend construction on the rig itself for a period of time.”

Rinehart said the action was not a decision to stop the project but “a decision to move ahead deliberately. We’re going to take a timeout on the physical construction of the rig. We want to review some of the design and engineering elements of the rig, which is the first of its kind. There has never been a rig quite like this, and as we worked to assemble it, since off-loading it in the summer of ’09 … some design and engineering issues have arisen and we have decided the smartest and safest way to deal with those is to take a timeout on engineering and design.”

The decision, he said, was not directly related to an earlier delay in drilling from late to 2011 to “likely” sometime in 2012, announced by BP in July in response to statements by federal and state agencies that they would seek an environmental and safety review of Liberty.

In referring to the July decision, Rinehart said BP still “anticipates” that there will be some state and federal regulatory changes.

“Certainly … it has been clear that regulatory agencies want to take a closer look, and we’re all for that. We’re making time for that,” he said, noting that situation was “status quo.”

BP does not yet have an estimated start date for drilling. Rinehart said its “priority is to develop this project safely and carefully and we’re going to take the time to do that right. As work progresses we’ll get a clearer idea of what our development schedule looks like.”

See story in Dec. 5 issue, available online for subscribers at noon, Friday, Dec. 3, at www.PetroleumNews.com


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