BP’s Alaska budget will be held at current level for several years, says BP President Steve Marshall

Kristen Nelson, PNA editor-in-chief

BP Exploration (Alaska) Inc. president Steve Marshall told the Anchorage Chamber of Commerce Sept. 9 that just because BP is refocusing its capital spending in Alaska away from exploration it “does not mean we’ve quit investing in Alaska, or that we’re in a ‘harvest’ mode.”

BP’s 2002 capital budget for Alaska is about $700 million, he said, with about $500 million of that “going into sustaining production on the North Slope and the rest into building new double-hull tankers for the Alaska trade.”

BP’s $700 million capital budget is about 20 percent higher than the company’s average capital spend in Alaska during the 1990s, he said, “and we plan to sustain it at that level for at least the next several years.”

The challenge in Alaska looks “very much different from a decade ago,” he said. As base production declines, BP needs “to keep unit production costs flat and leverage infrastructure and economies of scale” to keep North Slope projects competitive on a worldwide basis.

But these challenges “aren’t unique to Alaska and they aren’t insurmountable. Our company, our industry, have faced them in other mature oil and gas regions,” he said.