June 02, 2010 --- Vol. 16, No. 48June 2010

OCS moratorium does not impact Liberty

The new federal moratorium on deepwater drilling won’t delay the Liberty project BP hopes to begin drilling this year from an existing island off the North Slope.

“The deep water moratorium does not apply to this particular project, which is based from a man-made island and would potentially be drilling directionally into formations under shallow water,” Frank Quimby, public information officer for the U.S. Department of the Interior, told Petroleum News on June 2. “If drilling permit applications are submitted for the project, the Department of the Interior will review them at the appropriate time and determine, based on safety and other considerations, whether the project should move forward with drilling under federal waters.”

The Obama Administration on May 27 announced a six-month “pause” in deepwater drilling in the Outer Continental Shelf, as a response to the ongoing oil spill following the explosion of an offshore drilling rig at a BP exploration project in the Gulf of Mexico. For the purpose of the moratorium, “deepwater” is defined as being deeper than 500 feet.

The Liberty project would develop an OCS reservoir in federal jurisdiction using ultra extended reach drilling from the Endicott satellite drilling island, located in state waters.

BP plans to apply for drilling permits at Liberty “closer to the first development well spud date, probably by fall,” according to local spokesman Steve Rinehart, who added “MMS has approved BP’s Development and Production Plan for the Liberty project.”

He said BP hopes to have first oil production by 2011.

May ANS crude production down due to pipeline shutdown

Alaska North Slope crude oil production averaged 588,921 barrels per day in May, down 8.6 percent from an April average of 644,509 bpd, driven primarily by five days of prorated production while the trans-Alaska oil pipeline was closed down due to a 5,000 barrel oil spill into a containment area at Pump Station 9 south of Fairbanks.

North Slope production dropped to 391,769 bpd on May 25 and bottomed out at 50,840 bpd May 27 before returning to a normal level of 675,339 bpd May 30.

The largest per-barrel April to May drop was at the North Slope’s largest field, the BP-operated Prudhoe Bay field, which averaged 288,130 bpd in May, down an average of 27,056 bpd from an April average of 315,186 bpd, a drop of 8.58 percent.

The largest percentage drop was at BP’s Milne Point field, which averaged 24,526 bpd in May, down 17.48 percent from an April average of 29,722 bpd.

The ConocoPhillips Alaska-operated Alpine field averaged 88,087 bpd in May, down 11.15 percent from an April average of 99,144 bpd.

The ConocoPhillips-operated Kuparuk River field averaged 131,842 bpd in May, down 6.16 percent from an April average of 140,491 bpd.

Editor’s note: See stories in the June 6 issue, available online to subscribers at noon Alaska time on Friday, June 4.

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