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BP puts out bids for new North Slope rigs, Liberty moving forward, waiting on Palin, new Legislature for gas contract
The cornerstone of BP’s future in Alaska is gas, and BP is “keen, willing and able to progress the gas project once there’s a political process in place to do so,” Phil Cochrane of BP Exploration (Alaska) said Nov. 15.
That political process must be based on results of the November elections.
In spite of talk to the contrary “about what may or may not happen in this so-called lame duck session, I do want to make it absolutely clear that BP will not support a process that does not include the governor-elect and the new Legislature. We want a process that takes into account the feedback” from Alaskans on the contract, said Cochrane, who replaces Andrew Van Chau as the company’s vice president of external affairs.
In addition to gas, BP is going to focus on renewing its base business, applying new technology and unlocking heavy oil.
Cochrane gave an update on work on the Prudhoe Bay transit line corrosion that caused a partial shutdown of the field in August. Pigging has been completed on both western and eastern area transit lines, he said, with “good” results from the eastern side and results not yet in for the western side.
BP has been building bypasses to allow for production until the transit lines can be replaced, and Cochrane said that “over the last couple of weeks our oil production for Prudhoe Bay has been at levels where it was prior to the shutdown on Aug. 6.”
New drill rigs ordered There is a perception that BP has abandoned the drill bit. “That’s very far from the truth,” he said. BP is “in the midst of a bid process right now for the construction of new rigs for our North Slope operations,” one drill rig and one workover rig. “Depending on a number of factors, that number could grow to as many as six new rigs,” he said, in addition to the 11 rigs already working for BP. The company has completed 70 new wells this year in addition to “a significant amount of work to our existing wells,” he said.
Among projects involving technology Cochrane said BP continues to work on its Liberty project which would “bring ultra-extended-reach horizontal drilling to the North Slope,” allowing access to reservoirs as far as eight miles away — allowing BP to access the offshore Liberty prospect from onshore. Liberty is “not yet ready for final sanction,” he said, but BP has a dedicated team working it.
BP is also continuing work on “the first-ever low-salinity waterflood” at Endicott, a $100 million-plus project to test use of freshwater in place of seawater for recovery. “If successful, this could have applications right across our business on the North Slope and elsewhere.” Cochrane said BP is awaiting partner approval for this project.
Heavy oil is another area requiring technology. “The prize is huge: it’s some 20 billion barrels,” Cochrane said.
BP plans to drill a well and install some test facilities this year, he said, to “help us better understand production issues and techniques.”
And all of this takes people.
Cochrane said BP has added more than 200 people to its organization since 2005, and “in the next 12 months we’re looking at adding an equivalent amount, some 200 people.”
—Kristen Nelson
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