BP orders ultraextended-reach rig for Liberty field

Nina M Rach
Drilling Editor

HOUSTON, July 15 -- BP Exploration Alaska Inc. (BPXA), a division of BP PLC, has signed a contract with Houston-based Parker Drilling Co. to build, deliver, and commission a new ultraextended-reach drilling rig for Liberty field in the Beaufort Sea off Alaska.

BPXA intends to drill wells nearly 2 miles deep and with offsets as long as 8 miles. Some planned measured depths exceed current records (OGJ, Oct. 2, 2006, p. 37).

BP will own the land-based rig and will use it to drill as many as six extended-reach wells into Liberty field beginning in 2010. BPXA expects oil production to begin in 2011, ramping up to 40,000 b/d, with an ultimate recovery of 100 million bbl oil.

The construction and commissioning contract is the second phase of the Liberty field development project. Parker anticipates that gross margins through Phase 2 of the drilling rig project will be $14-18 million, about 1% of the overall Liberty development cost, which BPXA anticipates to be about $1.5 billion.

Parker previously completed a 2006-07 front-end engineering and design contract to design the rig (Phase 1) and was authorized to procure long lead items, according to Dave Mannon, drilling senior vice-president and chief operating officer (OGJ, May 28, 2007, p. 45). One of the design requirements was the ability to drill wells out to 8.3 miles (43,824 ft).

Liberty field is nearly 6 miles offshore. BP drilled the Liberty discovery well in 1997 from the Tern gravel and ice island, about 20 miles east of Prudhoe Bay. The company has decided to drill the development wells from an existing satellite pad at its Endicott oil field. Pad drilling reduces the environmental impact, and the Liberty wells will produce directly into existing facilities without the need for an offshore platform, artificial drilling island, or subsea pipeline.

According to Robert L. Parker Jr., Parker Drilling's chairman and chief executive, the new rig features a state-of-the-art automated equipment package and is designed to operate in temperatures as low as -50° F.

Parker Drilling, which has been drilling in the Arctic for 40 years, recently reported another contract with BP to build two smaller, Arctic land rigs for BP's other North Slope projects (OGJ, May 26, 2008, p. 10).

Contact Nina M. Rach at ninar@ogjonline.com

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