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July 2009

Vol. 14, No. 28 Week of July 12, 2009

BP in Alaska: BP in Alaska: Half a century gone by, half a century to go …

Frank Baker

For Petroleum News

This year as BP observes its 100-year milestone as a company, one of its upstream business units, BP Alaska, also has cause to celebrate, as the company opened its first office in Alaska in 1959. For half a century BP has remained one of the state’s leading investors, private employers, energy producers, corporate taxpayers and corporate citizens.

Arriving in the state in 1960, BP’s geologists and geophysicists were among the first explorers in search of oil and gas on Alaska’s remote North Slope. Atlantic Richfield (ARCO) was also exploring the North Slope, and its early drilling efforts led to the 1968 discovery of North America’s largest oil field — Prudhoe Bay.

BP and its partners then embarked on one of the most ambitious and costly projects in America’s history: developing the super-giant oil field and constructing an 800-mile pipeline to transport that oil to tanker ships and ultimately, to an energy-hungry nation.

National attention was focused on Alaska on June 20, 1977, as the trans-Alaska pipeline received its first oil. Prudhoe Bay production reached its plateau rate of 1.5 million barrels per day in 1981 and began its natural decline in 1989. More than 15 billion barrels of oil have been produced from the North Slope. Of that, more than 11 billion barrels has come from the Prudhoe Bay field alone. And today, with advancements in oil field technology, BP believes another 2 -3 billion barrels can be recovered.

In the 1980s BP and its partners expanded Prudhoe Bay production facilities to process more oil, developed several neighboring oil fields, and with evolving technology, moved offshore to construct new fields like Endicott and Northstar. Along with advancements in oil field technology, improvements in environmental monitoring and stewardship allowed BP and others to minimize impacts to the Arctic ecosystem.

In 1998-2000, with the acquisitions of Amoco, ARCO, Castrol and Vastar, BP became a much larger company. But it retained its dominant position in Alaska as a major investor and energy producer. Through its acquisition of ARCO, equity interests among Prudhoe Bay producers were realigned — and BP became the field’s sole operator.

Moving into a new decade, BP began looking ahead to what it calls a “50-year future,” anchoring its plans on continued development of the North Slope’s light oil, using evolving technology to produce vast reserves of heavy oil, and commercializing the Slope’s tremendous natural gas resources. In 2008 with the formation of Denali, BP and its partner ConocoPhillips launched preliminary work on a $40 billion gas pipeline project from Alaska to Canada.

The company recently launched a new offshore project — Liberty — in which the world’s longest extended reach wells will tap an oil reservoir with an estimated 100 million barrels of recoverable oil.

A key part of BP Alaska’s next 50 years is renewal of its North Slope infrastructure — updating pipelines and facilities that were built in the 1970s and 1980s. Included in these upgrades are significant advancements in corrosion detection and prevention, leak detection, fire and alarm systems and other production operations controls.

From its earliest days in Alaska, BP has been a leading corporate citizen, and today that legacy continues. In 2008, for example, BP contributed more than $10 million to support more than 200 nonprofit and educational organizations and programs in Alaska. The company’s employees are actively engaged across Alaska, supporting more than 250 community organizations and 150 youth teams in more than 30 Alaska communities, either in direct contributions or volunteerism.






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