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BP to mothball Badami
Kay Cashman, Petroleum News Publisher & Managing Editor
The state of Alaska has approved BP Exploration (Alaska)’s application to suspend production from the company’s North Slope Badami field and mothball the unit’s facilities for a two year period beginning Aug. 1 and ending June 30, 2005. The Badami complex is the easternmost production facility on the slope and is accessible only by ice roads in the winter, water in the summer and air year-round.
In paperwork filed in mid-May as part of its fifth plan of development for Badami, BP said the field’s 1,350 barrel per day production rate “cannot offset field operating costs … making it uneconomical to continue operations.” (See related stories in the March 2 and March 9 editions of Petroleum News.) The company said at $24.72 per barrel oil -- the “average oil destination value” in 2002 -- its estimated annual cash loss would exceed $1.6 million.
Field production, which has been steadily dropping each year, is expected to continue to decline, BP said.
When Badami was initially brought on-line in September 1997, it was expected to hold 120 million barrels of recoverable reserves and produce 35,000 bpd. Production peaked “very briefly” at 18,000 bpd in 1998, BP told the state, citing problems with the reservoir which proved to be “more highly compartmentalized than originally thought.” Several options for Badami “We will continue to evaluate various options for Badami. The two-year suspension will give us time to do that,” BP spokesman Daren Beaudo told Petroleum News June 13.
The paperwork BP submitted to the state identified several options for Badami, including selling it to a third party, hosting BP’s proposed offshore Liberty development or use by the nearby Point Thomson project. Warm shutdown mode The Badami field has seven production wells, six of which are currently producing, two gas injection wells and a disposal well. The complex also includes a dock, airstrip, an oil and gas processing facility on a gravel pad and in-field gravel roads, a 25-plus-mile oil export pipeline to Prudhoe Bay and a utility pipeline to Endicott.
The facilities can re-inject produced gas and water. BP said gross field construction and development costs totaled approximately $300 million.
BP plans to suspend operations at Badami as soon as the North Slope barging season commences, place the facilities in a “warm shutdown mode, back pressure the gas injection wells, and replace oil in the export line with dry gas.” However, the camp, water treatment facilities, Class-1 injection well, communications, incinerator and airstrip will continue operation. On-site staff consisting of “multi-skilled operators with skills in mechanical, electrical, heavy equipment maintenance, and environmental and medical response will frequently monitor all shut-in wells, BP said.
Production was suspended once before in February 1999 due to low temperatures and concerns about the pipeline freezing since it was carrying much less oil than originally expected.
The drilling program at Badami was suspended in May 1999 after the wells had significantly underperformed.
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