BP Exploration (Alaska) Inc. says its offshore Liberty unit contains “approximately 150 million barrels of recoverable, high-quality light oil.”
That’s considerably more than the 100 million barrels long cited for the field.
The question remains, however, how to develop the field, located on federal leases in the shallow waters of the Beaufort Sea about 15 miles east of Prudhoe Bay.
BP drilled and tested Liberty No. 1, the discovery well, in early 1997. On May 2 of that year the company announced a commercial discovery estimated at more than 100 million barrels of recoverable oil.
In a Nov. 20, 2012, letter to Interior Department officials, John Minge, then president of BP Alaska, referenced the 150-million-barrel estimate and said a bold plan to tap the reservoir using ultra-extended reach drilling from land was off.
The letter wasn’t available when Petroleum News, in its Feb. 24 issue, reported that the Interior Department’s Bureau of Safety and Environmental Enforcement, or BSEE, had allowed BP two years to submit a new development and production plan for Liberty.
Rig remains standingBP originally had hoped to put Liberty into production in 2011.
The development stalled amid technical problems with a gigantic rig Parker Drilling Co. built for the project, as well as federal regulatory complications apparently stemming from the Deepwater Horizon disaster in the Gulf of Mexico in April 2010.
Today, the rig remains standing on a pad at BP’s Endicott field.
Parker evidently is out of the picture. BP is the 100 percent owner of the rig, BP spokeswoman Dawn Patience said in an April 10 email.
In its Nov. 20 letter, BP requested a five-year suspension of production for the two Liberty unit leases to allow time “to properly develop the leases in a safe and environmentally sound manner.”
The letter said repeatedly that the delay would be in the “national interest,” as BP could develop the unit at least five years sooner than any other party.
BP has spent in excess of $1 billion to date toward development of the Liberty unit, the letter said.
Production island?BP had touted the idea of drilling ultra-extended reach wells as a way to avoid building an artificial production island in the Beaufort and a subsea pipeline to bring the Liberty oil ashore.
The wells, BP said, would be the longest extended-reach holes ever attempted, going down two miles and bending out horizontally for six to eight miles to tap the oil reservoir.
Now BP appears to have abandoned the superwell idea.
“Pursuant the U.S. National interest and BP’s safety and operational standards, BP no longer sees this development concept as the safest or most environmentally responsible course of development,” the letter said.
BP further said other development concepts could increase recovery from the Liberty leases by as much as 15 percent.
The letter went on to discuss BP’s 40-year track record in Alaska.
“In fact, BP is the only company to have constructed and operated stand-alone drilling and production processing islands on Alaska’s North Slope,” the letter said. “In support of those successful and producing leases, BP has overcome major technical and commercial hurdles not unlike the current challenges confronting the development of Liberty. Despite these challenges, BP remains undeterred and committed to developing the Liberty Unit.”
Those Beaufort Sea production islands include Endicott, which is connected to land with a causeway, and Northstar. Endicott has produced 462 million barrels so far, while Northstar has produced almost 156 million barrels.
Nothing decidedNo decision has been made on exactly how to develop Liberty, whether an island or some other approach, Patience said.
BP will continue to work on plans, and have conversations with the federal regulators, she said.
BP, in its letter to BSEE, offered a plan of operations with several milestones. The final milestone would have the company commence production by December 2020.
In its Dec. 31, 2012, reply, BSEE approved a two-year suspension of production for the Liberty unit leases, giving BP until Dec. 31, 2014, to submit a new development and production plan.
That plan would undergo a regulatory review, the agency said. BP could then submit an application for a second suspension of production, along with a schedule to achieve production by the end of 2020.