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BP’s plan for Liberty snagged on Endicott processing agreement
Petroleum News Alaska Staff
In a surprising turn of events, one of the owners of the Endicott processing facility said an Endicott owner was “holding up” BP Exploration (Alaska) Inc.’s new development plan for the Beaufort Sea Liberty prospect by being unwilling to agree to a “reasonable processing fee” for Liberty oil.
If BP can’t negotiate a reasonable facilities use agreement with its partners when it owns 68 percent of the Endicott facility, how can independents such as Winstar and Pioneer hope to negotiate facilities use agreements that make economic sense?
In its initial development plan, BP proposed to develop Liberty from a gravel island about five miles from shore some 20 miles east of Prudhoe Bay, eight miles east of the Endicott facilities and 15 miles from Badami.
In March, the U.S. Minerals Management Service said BP would be submitting a modified, more cost-effective plan for Liberty as early as August. That’s August 2002.
BP told MMS that its development scenarios included “construction of a drilling island with a 3-phase flow back to existing infrastructure” at Endicott or Badami.
On Feb. 12, PNA asked BP spokesman Daren Beaudo whether or not the lack of a facilities sharing agreement with Endicott was holding up the company’s plans to file a new development scenario for Liberty with MMS.
Here’s what Beaudo had to say: “We’re still in the process of evaluating Liberty as a satellite field. … Potential tie-back destinations … (include) Badami, Endicott and Prudhoe Bay. We are currently in negotiations with Endicott owners in hopes of coming to a mutually beneficial agreement. At the same time, we are maintaining other options as well — Prudhoe Bay and Badami. … We have no timetable. We’re pursuing it the best we can.”
So who are the other major owners of Endicott? ExxonMobil has 21 percent and Unocal has 11 percent.
Ken Freeman goes to work for ExxonMobil Speaking of ExxonMobil, Ken Freeman, 33, has gone to work for ExxonMobil in Anchorage. Lucky Exxon.
Most recently, Ken was former Gov. Tony Knowles’ special assistant for business and gas line development.
Prior to that appointment Ken held two positions with the Resource Development Council of Alaska, serving first as projects coordinator and then as executive director. Between positions at RDC, he worked as press secretary and legislative assistant to the House Majority Caucus in the Alaska Legislature.
Not true: New DNR Commissioner Tom Irwin will continue to live in Fairbanks Before and after Tom Irwin’s appointment to the post of commissioner of the Alaska Department of Natural Resources, the rumor mill said he had cut a special deal with Gov. Frank Murkowski that allowed him to continue to live in Fairbanks and spend a lot of time in DNR’s offices there.
Not true, says Joe Brenckle with the governor’s press office in Juneau.
“From the beginning of his administration, Gov. Murkowski has made it a requirement that all of his commissioners live in Juneau,” Joe told PNA earlier this month.
“Tom Irwin is currently living in Juneau and will make Juneau his home for the duration of his term. He is staying at the Prospector Inn until he and his wife find a home here in Juneau,” Joe said.
Petroleum engineers to meet The Alaska section of the Society of Petroleum Engineers will hold its monthly luncheon meeting 11:30 a.m., Feb. 20, in Anchorage at the BP office building.
The featured speaker, Curtis Blount of ConocoPhillips Alaska, will present “Coiled tubing drilling from Algeria to Alaska: praise, pitfalls and potential.”
Cost is $15. RSVP to: [email protected]
What would you pay to drive to Nuiqsut? Gov. Frank Murkowski and members of his cabinet met with reporters Feb. 12 in Juneau to talk about the action plan they’ve roughed out to achieve goals the governor presented in his state-of-the-state address, among them building more roads in the state.
Acting Commissioner of Transportation and Public Facilities Mike Barton brought to the table a list of proposed roads on which at least some planning work has already been done, including a road to Nuiqsut.
The governor elaborated on the value that project. Because there are oil and gas leases in the area, he said, this is one road on which the state might be able to quickly begin earning an economic return, both through money from leasing and through money from royalties on oil and gas developed near the road.
Commissioner Ernesta Ballard of the Department of Environmental Conservation, who described results of an economic development planning group, also said that Bill Corbus, commissioner of the Department of Revenue, is charged with looking at different ways to fund road projects, including toll roads.
Commissioner Tom Irwin of the Department of Natural Responses was asked for specifics on another of the governor's goals, increasing oil production. He said the issue of oil is “very, very complex” and noted that out of the last three weeks he's spent more than 20 hours with Division of Oil and Gas Director Mark Myers going over oil issues item by item, looking at bottlenecks and talking to industry.
We'll list priorities, Tom said, and itemize areas where immediate results can be achieved.
“I come from a business background” and particularly in oil and gas we need to run that as a business, looking at net present value and return on investment. “We'll be looking at what state of Alaska gets on net present value basis,” he said.
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