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August 12, 2006 --- Vol. 12, No. 49August 2006

BP to maintain production from western Prudhoe Bay; cost of 16 miles of pipe pegged at $20 million

BP said late Friday that it will continue production of oil from the western side of the Prudhoe Bay oil field.

Current production is 150,000 barrels per day, including natural gas liquids, and is expected to increase to 200,000 barrels per day as Gathering Center 1 ramps up to full production after completion of a planned maintenance shutdown.

BP will complete the installation of 16 miles of new oil transit line at Prudhoe Bay by early next year. The cost of that pipe, which will come from Texas and Ohio steel mills, is $20 million, excluding transportation to Alaska.

BP said it is continuing to look at interim options for restoring production from the eastern side of the field, subject to the approval of the U.S. Department of Transportation, Pipeline and Hazardous Materials Safety Administration.

The decision to continue production from the western half of the field was made “after close consultation with federal and state regulatory agencies, review of more than 1,400 ultrasonic inspections conducted on a key five-mile section of pipeline and a decision to begin round-the-clock visual and infrared surveillance of the line,” BP said in a press release at 6:14 p.m. Aug. 11.

“Over the last five days we have doubled spot inspections over a key five-mile segment of the oil transit pipeline serving the western side of the field,” BP America Chairman and President Bob Malone said in the release.

“The results have been encouraging and have increased our confidence in the operational integrity of this pipeline. With greatly enhanced surveillance and response capability, I am confident we can continue to safely operate the line,” Malone said.

BP said it will continue ultrasonic inspection of the western transit line and plans to do more inspections in coming weeks.

The company plans to evaluate test results daily to determine if repairs are required or if continued operation of the line is appropriate.

BP said it will run maintenance and smart pigs through the pipeline before the end of November after installing a pig launcher at Gathering Center 1.

The company’s surveillance effort “will include daily over-flights using forward looking infrared cameras, as well as the use of hand-held infrared cameras on the ground. The cameras are capable of detecting small leaks by sensing changes in pipeline surface temperatures,” the company said.

Two vehicles equipped with spill response equipment and carrying observers with infra-red leak detection equipment will patrol the line 24 hours a day. They will be teamed with “pipeline walkers” who will visually inspect the line 10 times a day.

“We will ensure that our inspection and surveillance programs meet or exceed the requirements of the amended corrective action order issued Aug. 10 by the Department of Transportation,” BP Exploration Alaska President Steve Marshall said in the release. Marshall said state and federal agencies played an important role in reviewing and testing BP’s plans. He thanked agency personnel for “giving this effort their complete and undivided attention.”

He also thanked “the hundreds of men and women who have been inspecting pipe, studying the data, developing plans for enhanced surveillance of the pipeline, evaluating options and doing it all safely.”

BP has also said it takes full responsibility for the lack of upkeep that led to transit line corrosion and partial shutdown of the Prudhoe Bay oil field.

“BP is the operator of the field. We’re ultimately responsible,'' said Kemp Copeland, manager of the Prudhoe Bay oil field, who was quoted in an Aug. 11 Associated Press report.

Editor’s note: See full story in the Aug. 20 issue of Petroleum News, which will be available online at noon Alaska-time Friday, Aug. 18, at www.PetroleumNews.com

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