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Vol. 16, No. 4 Week of January 23, 2011
Providing coverage of Alaska and northern Canada's oil and gas industry

Alaska Offshore Special Report: Reviews stall Liberty project

When BP discovered Liberty in 1997, it planned to develop the 100 million barrel offshore oil field by building a dedicated drilling island in the Beaufort Sea. Thatís how BP developed two other nearshore Beaufort Sea projects: Endicott and Northstar.

Ultimately, though, BP chose a more innovative approach: using ultra-extended-reach drilling to develop Liberty from an extended manmade gravel island at Endicott.

To accomplish that task, BP commissioned one of the most powerful rigs in the world, a $200 million Parker Drilling Co. rig designed to drill eight-mile-long directional wells.

That plan would have significantly reduced the footprint of the Liberty project by avoiding the need for a new offshore island and a pipeline connecting to the mainland.

BP hoped to start drilling at Liberty in 2010.

In the wake of the Deepwater Horizon disaster on a BP-operated project in the Gulf of Mexico, Liberty came under scrutiny because of its complexity and because some accused BP of stepping around a federal moratorium by drilling from state land.

After state and federal officials suggested they would review the project in greater detail, BP pushed off drilling until 2011 to accommodate the uncertain timeline of the U.S. Department of the Interiorís plans to review the environmental assessment for the field.

But in December 2010, with the rig on site at Endicott, BP announced another delay.

The company said it planned to slow down its timeline on the project to examine the design and engineering of its huge rig.

Steve Rinehart, BPís spokesman in Alaska, described the move as ďa decision to move ahead deliberately. Weíre going to take a timeout on the physical construction of the rig. We want to review some of the design and engineering elements of the rig, which is the first of its kind. There has never been a rig quite like this, and as we worked to assemble it, since off-loading it in the summer of í09 Ö some design and engineering issues have arisen and we have decided the smartest and safest way to deal with those is to take a timeout on engineering and design.Ē

BP did not offer a new estimated start date for drilling.

Liberty is a major component of BPís vision for Alaska, accounting for roughly a third of the $800 million capital budget the company planned to spend in Alaska in 2011.

óEric Lidji



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