BP continues to look at shutting down Badami, open to sale

Kay Cashman, PNA publisher & managing editor

BP Exploration (Alaska) Inc. is taking a serious look at shutting down its Badami field due to lower than anticipated oil production. The North Slope unit, which came online in 1998, was expected to hold 120 million barrels of recoverable oil and produce more than 30,000 barrels per day at its peak. Instead, it peaked briefly at 18,000 barrels and began a rapid decline to today’s daily production of 1,400 barrels.

Recently BP appointed a team of 12-15 people to review Badami’s economics.

“There’s no timetable for action on this,” BP spokesman Daren Beaudo told Petroleum News Alaska Feb. 27, noting that state agencies will be brought into the discussion because whatever happens will require state approval.

And BP, he said, “will certainly listen to anyone who has an interest in acquiring the (Badami) assets, and producing the field,” which is the farthest east producing oil field on the North Slope.

BP has invested more than $300 million in Badami to date.

What went wrong?“

The most basic thing is the reservoir was more compartmentalized than we thought,” Beaudo said. “We engaged our best technical minds … in an attempt to find and produce more oil … but we could not overcome the limitations of the reservoir.”

A shutdown would likely be temporary

If BP elects to shut down Badami, the facilities and pipelines’ shutdown will likely be temporary because Badami is expected to be used to process and/or transport oil from nearby fields as they come online.

Those fields include ExxonMobil’s Point Thomson field (including the Sourdough next to the coastal plain) and BP’s proposed Liberty project. BP also has been actively marketing three prospects in the vicinity of Badami, including the Slugger and Red Wolf prospects.

Winstar, UltraStar, ConocoPhillips and Chevron also have prospects in the area.