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BP, MMS, Corps sign MOU for stalled Liberty prospect Work set to begin next year includes permit evaluation, NEPA process: BP to provide development plan for Alaska project in November 2005 Kristen Nelson Petroleum News Editor-in-Chief
Work on BP’s stalled Liberty prospect, in the Beaufort Sea east of Prudhoe Bay, may be inching forward again.
BP Exploration (Alaska) Inc., the Minerals Management Service and the U.S. Army Corps of Engineers signed a memorandum of understanding Sept. 27 for permit evaluation and the National Environmental Policy Act process for Liberty.
BP drilled the Liberty discovery well in 1997 on federal outer continental shelf acreage, has estimated recoverable oil at 120 million barrels and has been evaluating development options. An environmental impact statement was issued in May 2002, but BP had already said it was deferring the project as it revised its development plan. There was agency disagreement on how the project should go forward, and reports that one of the Endicott owners was “holding up” a BP proposal to process Liberty oil through Endicott facilities. In addition to BP, which is 68 percent working interest owner at Endicott, and the field’s operator, ExxonMobil owns 21 percent and Unocal owns 10 percent. Doyon Ltd., NANA Regional Corp. and ConocoPhillips combined hold the remaining 1 percent.
Although BP said in January 2002 that it was putting the project on hold, MMS decided to publish the final EIS because it included substantial changes made in response to comments on the draft EIS and documented the extensive analysis done for the project. MMS said it also expected to use the 2002 final EIS as a reference document for future projects.
MMS said that when BP submitted a revised project, agencies would evaluate whether to use the 2002 final EIS, issue a supplemental EIS or issue new environmental documentation.
A supplemental EIS is included in the scope of work covered in the MOU. Suspension of production running BP’s current plan of operations for Liberty began in June 2003 and runs through June 2006.
In June 2003, BP requested a suspension of production from MMS to run through Dec. 15, 2004, and told MMS that if “an economically viable option exists and permitting risks to costs and schedules are manageable,” the company would select a preferred conceptual development in 2004, and, by Dec. 15, 2004, “submit the permit application with a revised DPP (development and depletion plan) and start the permitting process.”
The schedule in the MOU calls for pre-application work to begin in November 2005, with BP providing the agencies with a complete description of the Liberty project, an application in June 2006 and final approvals in late 2007.
The MOU “delineates the roles and responsibilities of the parties” in the development of the supplemental EIS for Liberty, as well as permit evaluation and decision-making for the project, which would develop an offshore oil accumulation between Endicott and Badami. It “covers permit evaluation and the NEPA analysis of environmental impacts of the Liberty Project.”
MMS will review existing NEPA documentation and determine if that documentation “is adequate” for use in the supplemental EIS, and may request that BP supplement existing documentation “if new information is needed.” Agreements needed with state, borough Daren Beaudo, BP Exploration (Alaska)’s director of public affairs, told Petroleum News Oct. 15 that the MOU establishes “the roles and responsibilities of the applicant and agencies and sets forth a business-like schedule, beginning with a permit application in June 2006.
“Other steps forward would be to reach similar agreement with the state of Alaska and North Slope Borough for their permitting processes, to make sure their needs are met.”
Beaudo said “BP is pursuing this in a very deliberate way and through this process we have no appetite for controversy.
“In order to succeed,” he said, “the project has to be wanted by federal, state and local constituencies.” Unit agreement signed in 2003 BP finalized a unit agreement for Liberty in June 2003, and told MMS then that during the June 2003 to June 2006 plan of operations it intended to complete an appraisal of the economic viability of “current conceptual development options;” assess permitting risks associated with each option; “if commercially viable,” select a conceptual development option; and prepare and submit a conceptual design and permit package.
BP said in June 2003 that the options it is evaluating each includes a “nearshore, potentially off-lease, drilling island” to develop the accumulation, with produced fluids “sent to existing infrastructure for processing,” with both Badami and Endicott being considered.
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