The Explorers 2010: BP Exploration (Alaska)

BP Exploration opened its first office in Alaska in 1959, and drilled a confirmation well for the Prudhoe Bay discovery a decade later. Today it operates the unit and its satellites and participating areas, as well as other North Slope units like Duck Island, Milne Point, Northstar and Badami. BP owns a share in two other major North Slope units, Kuparuk River and Point Thomson, as well as the largest share of the trans-Alaska oil pipeline.

BP dropped its exploration acreage in 2003, but is still trying to bring additional resources online. In the short term, BP is aiming to slow production declines through additional drilling (62 wells in 2009 and roughly the same planned for 2010), reservoir modeling and pressure management, and recovery techniques like miscible injection and water flooding. Longer term, BP hopes bring new production online through three large projects. BP recently completed a $100 million facility for testing heavy oil production methods west of Prudhoe Bay. In a joint venture with ConocoPhillips, BP held an open season this year for a multibillion-dollar natural gas pipeline from the North Slope to southern markets. Finally, BP planned to use one of the most powerful rigs in the world to drill the offshore Liberty prospect from existing onshore facilities, but delayed the plan at least a year while the federal government reviews offshore drilling programs in the wake of BP’s oil spill in the Gulf of Mexico. Since the spill, rumors have been spreading that BP plans to sell some of its Alaska assets to raise capital, but as of yet those rumors have failed to materialize. BP produced 181,000 per day of liquids in Alaska in 2009 and leases nearly 310,000 state acres.

Current exploration focus:

Northern Alaska: BP withdrew from conventional Alaska oil and gas exploration in the early 2000s to focus on developing new oil resources from existing fields, especially Prudhoe Bay. The company is testing heavy oil production methods on the North Slope, and is involved in a joint government-industry-university project to investigate the possibility of producing natural gas from North Slope methane hydrate deposits.

Northern Alaska: BP is developing the Beaufort Sea Liberty field using ultra extended-reach drilling from the Endicott satellite island, but federal reviews could delay drilling.