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NEWS BULLETIN

August 11, 2006 --- Vol. 12, No. 48August 2006

BP: Prudhoe at 155,000 bpd

In an update issued this morning BP Exploration Alaska said current Prudhoe Bay production is about 155,000 barrels of oil and natural gas liquids per day.

BP began ramping down eastern operating area production at Prudhoe Aug. 6 in response to corrosion problems and a spill in the Flow Station 2 transit line. Prudhoe typically produces some 400,000 bpd from the eastern and western operating areas combined, plus some 17,000 bpd from Lisburne. BP said Lisburne is unaffected by the shutdown, as that transit line had been smart pigged and determined to be in good condition.

Cleanup of the FS 2 transit line spill is progressing with about 15 barrels of oil and 443 barrels of water collected from the tundra, the company said. Oil volume was originally estimated at four to five barrels; BP said the oil volume estimate is expected to increase slightly as responders continue to separate the collected fluids.

The latest incident report from the Alaska Department of Environmental Conservation, Aug. 9, said a patch has been placed over the pipeline rupture in the FS 2 transit line “providing complete source control at the spill site.”

BP said it is installing nine metal sleeves over sections of pipeline showing corrosion damage and has plans under way to mobilize “a significant number of additional ultrasound testing personnel” for the eastern operating area inspection program.

BP also said it has “significantly increases” in ultrasonic testing activity on western operating area transit lines and has completed more than 700 inspections in the current testing program.

BP has completed its orders for pipe to replace 16 of 22 miles of existing transit lines at Prudhoe Bay. The pipe will be supplied by U.S. mills with delivery anticipated in the fourth quarter of 2006, the company said Aug. 11.

“Steve Marshall had originally indicated steel would come from U.S. Steel and Nippon,” BP spokesman Neil Chapman told Petroleum News this morning.

But thanks to “fantastic response from our suppliers and other suppliers all of our pipe will be coming from U.S Steel in Ohio and VM Star’s mill in Texas,” Chapman said. “The transportation companies and steel companies have been extremely helpful.”

Editor’s note: See full story in the Aug. 20 issue of Petroleum News.

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