40 Years at Prudhoe Bay: Prudhoe discovery transforms ARCO, BP

Giant North Slope field helped shape development of international oil and gas companies

Nancy Pounds

For Petroleum News

The discovery of oil at Prudhoe Bay positively altered the fortunes of British Petroleum and Atlantic Richfield Co., major international oil producers.

ARCO, except for its Alaska operations, was acquired by BP in 1999. ARCO Alaska Inc. was sold to Phillips Petroleum Co. at the same time, and Phillips is now a part of ConocoPhillips Inc. ARCO’s Prudhoe Bay story is part of this combined company’s history.

But it was ARCO predecessor Richfield Oil Co. that started it all with its success at drilling an exploratory oil well at Swanson River in the Kenai Wildlife Refuge in the 1950s.

As one Associated Press story put it: “Richfield’s discoveries put Alaska on oil map.” The news article detailed the significance of both Prudhoe and Alaska to the company.

“The success at Swanson River marked the beginning of a four-decade relationship that produced huge riches for both the state and the company whose name had been changed to Atlantic Richfield Co. when it discovered the real bonanza — Prudhoe Bay, the largest oil field ever found in North America,” according to the article

“You could say Alaska made ARCO, and ARCO certainly had a pervasive impact on the state,” said Gil Mull, a former Richfield geologist, in the article.

Field gives BP foothold in America

“In the last 50 years, we’ve become the largest oil and gas producer in the United States, but it all started with Prudhoe Bay, Alaska,” BP says on its Web site. By 2001, BP had become the largest oil and gas producer and one of the largest gasoline retailers in the United States. The company is the second-largest refiner in North America today and the second-largest fuels marketer.

“BP was radically affected in a positive fashion,” said former BP executive Roger Herrera in a recent interview.

In the 1960s BP controlled a significant percentage of the world’s oil, he said. The company had become adept at finding “super-giant” oil fields by then, he said.

The only reason BP was in Alaska was because it was searching for a U.S. “super-giant,” which would support BP’s entry into selling gas at the pump in America, he said.

“At that time Alaska was virtually unexplored,” he recalled.

The oil field’s history has proven to be successful, and Prudhoe Bay powers on into the future for Alaska and its operators.

“Prudhoe Bay continues to be a large part of the answer for the companies that own and operate it,” said Damian Bilbao, BP Exploration Alaska Inc.’s manger for strategy and planning.

Advanced technology continues to increase the amount of total production and prolong the oil field’s life, Bilbao said. He cited future opportunities in production of heavy oil and other crudes.

But in 1968, both companies had been ready to abandon years of exploratory work on the North Slope before one final test produced signs of a massive oil field at Prudhoe Bay.