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NEWS BULLETIN

May 03, 1999 --- Vol. 5, No. 24May 1999

Badami production flowing again

BP Exploration (Alaska) Inc. started bringing wells back on line May 1 at its Badami field east of Prudhoe Bay. The first pipeline throughput was May 2, BP Exploration (Alaska) spokesman Paul Laird told PNA May 3.

Laird said the field was currently producing at 4,000-7,000 barrels of oil per day. Production is expected to average 3,000-4,000 barrels per day over the longer term for reservoir testing.

Laird reported that Octavio Pastrana, BP’s eastern North Slope business unit leader, said the primary reason production was resumed was to learn more about the reservoir and that production was secondary.

Natural gas is imported from Endicott for Badami production and Laird said the company was using much more aggressive gas injection than it had initially. When the field came on line last year injection was at 1,800 PSI; currently it is at 5,300 PSI.

We hope, Laird said, that the more aggressive gas injection will establish conductivity among the channels in the turbidite accumulation. Initially, he said, the channels weren’t communicating as BP had anticipated and hoped that they would.

Weather is a factor in bringing the wells back on line, Laird said: “The warmer temperatures enable us to sustain production at low throughput rates without risking plugging the pipeline.”

Production began from Badami in August; nine wells have been completed. Total production was less than 500,000 barrels when the field was shut in early in February.

BP Amoco ANS term price up 20 percent for May

The BP Amoco May term price for Alaska North Slope crude oil is $15.62 a barrel, up $2.55 a barrel, an increase of 19.51 percent, from the April price of $13.07 a barrel. The May term price is up $6.25 a barrel, a 66.7 percent increase, from January’s low of $9.37 a barrel. The year-to-date average term price is $11.86, down 14.3 percent from an average price of $13.84 a barrel for the comparable period in 1999.

BP Amoco has the largest volume of production from the North Slope and is the only producer to report a term price.

Corps of Engineers issues Northstar permit

Col. Sheldon Jahn of the Alaska district of the U.S. Army Corps of Engineers signed the permit for BP Exploration (Alaska) Inc.’s Northstar project May 3.

Decision authority was returned to the Alaska district level of the corps after Assistant Secretary of the Army for Civil Works Joseph Westphal denied a request for additional review of the proposed decision in Washington, D.C.

The route of the pipeline was in dispute, with the U.S. Fish and Wildlife Service in Alaska asking for a higher level review on March 30. Under the permit issued today, the pipeline will be routed from the production island between barrier islands and across Gwydyr Bay and Simpson Lagoon to the shoreline. The route was the shortest alternative among several considered in the environmental impact statement.

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