Managing lifting costs at Prudhoe Bay

The Prudhoe Bay field faces the same cost issue as any other aging oil field: As production declines, total field and oil transportation costs are spread across fewer barrels of oil, thus potentially increasing the per-barrel cost of “lifting” the oil and making the oil less profitable, with the oil ultimately becoming uneconomic to produce. The question inevitably becomes one of managing the costs without compromising safety or environmental protections.

The first key to managing lifting costs is to ensure the efficient use of people, Mike Utsler, BP senior vice president for greater Prudhoe Bay, told Petroleum News June 9.

“It’s really about how do we get the right number of people with the right skills applied doing the right work sequence, from a maintenance (standpoint), from an operations standpoint, from a small projects development (standpoint), in a continuous improvement cycle,” Utsler said.

A second key is the use of technologies such as state-of-the-art, high efficiency power generation turbines. And in the long term BP is looking into opportunities for process automation, he said.

Establishing partnership approaches between the field operator and the State of Alaska, and between the operator and the service industry, is also a key to cost management, Utsler said. Systems and processes need to be seamless and streamlined, even though managing a multiplicity of service providers can prove very complex. At the same time oil industry legislation and regulation bring operational costs: Safety and environmental protection need to be applied in an efficient manner.

“We more than anybody want a safe and reliable operation, but it is working in partnership,” Utsler said.

—Alan Bailey