“After a full review of project engineering and economics, BP has decided not to pursue the proposed Liberty project, in its current form,” Dawn Patience, spokeswoman for BP Exploration (Alaska) Inc., told Petroleum News. “BP is in the process of working with regulators to discuss the potential forward plans for the project.”

BP had proposed drilling ultra-extended reach wells to tap the Liberty reservoir, located on federal leases in shallow Beaufort Sea waters about six miles offshore and 15 miles east of Prudhoe Bay.

In November 2010, however, BP announced it was suspending construction pending an engineering review, and a specially designed drilling rig has stood idle at Endicott since then.

Patience said the process leading up to today’s announcement included “a detailed 18-month review of the rig systems, an analysis of the project’s risk and economics, and an assessment of the evolving regulatory framework.”

BP now believes the Liberty project would cost “at least double” the original estimate of $1.5 billion.

—Wesley Loy

See full story in July 1 issue, available at 11 a.m. Friday, June 29, at www.PetroleumNews.com