BP says with gas, production could double

Company working gas pipeline, heavy oil, reinvesting at Prudhoe for the next 50 years; plans to add 200 to Alaska staff

Kristen Nelson

Petroleum News Editor-in-Chief

Over the next 10 years BP will be managing its base business in Alaska and preparing for the future, trying to “get more out of the resources that we have” and getting ready for gas production, Bernard Looney, the new senior vice president of the Alaska Consolidated Team at BP Exploration (Alaska) Inc., told the Resource Development Council’s annual conference Nov. 16.

Prudhoe Bay, he said, is a great example of good management of an existing resource: expected at startup to produce some 10 billion barrels, “today we think we might get 15” billion.

That is the result of both investment and technology, with BP’s investment continuing at a level expected to be between $10 billion and $15 billion in Alaska over the next 10 years, he said.

Technology is important because the easy oil has been produced, “and we’re actually into smaller targets, tougher targets.” Recent examples include multi-lateral wells, with one pentalateral accessing five miles of reservoir from a single well bore, and a proposal to use fresh water in enhanced oil recovery, significantly improving recovery factors. “If we can do that, that’s like bringing on a new field except we’re doing it with the fields that we have,” Looney said.

And extended reach drilling is the current plan to develop the offshore Liberty prospect: It’s the equivalent of starting a well at the Port of Anchorage and ending up at Potter’s Marsh, he said.

Shift away from light oil

Heavy oil is shallow, cold and thick, and difficult to produce. “We’re looking at technologies that are being employed in Canada today,” including steam, solvents and carbon dioxide, he said. The trick will be “to combine these technologies with ... drilling technologies and actually unlock” the North Slope’s heavy oil.

BP is looking for “clarity and stability” in its gas negotiations with the state, Looney said. “And for us, at BP, such an agreement will give us the confidence that we need to continue to invest what we feel we need to invest in Alaska over the coming years.”

The gas business, he noted, will be built on the back of the oil business. “Clarity and stability for oil is every bit as important as it is for gas as the two are inextricably linked.”

Renewal of facilities, people

The facilities at Prudhoe weren’t designed for 75 years, he said: “We’re changing that and we’re investing in it; we’re spending money to upgrade the facilities, doing the work that we need to do to prepare for the future.”

BP is also adding to its Alaska staff. With all the projects it has, “BP is looking at hiring some 200 people before the end of next year in Alaska.”

The company is also planning for the next generation.

The average age of its workforce is 50 years, Looney said. “It’s interesting to think that the person who will run this business in 50 years time probably hasn’t been born today. So we’ve got a huge challenge on the people front and how do we actually attract the new generation.”

What is the future?

BP produces some 300,000 barrels per day of oil and gas today, he said. “In 10 years time that could be back up to 600,000” bpd of oil and gas equivalent, almost back to the production peaks of the 1980s.

“Incredible to see that growth again ahead of us,” Looney said.