BP PLC plans to add $1 billion in new investment and two drilling rigs to its Alaska North Slope fields over the next 5 years. Executives attributed the increased investment to changes in the state’s oil tax policy that Gov. Sean Parnell signed during May.
In addition, BP said it has support from the other working interest owners at Prudhoe Bay to evaluate an additional $3 billion worth of new development projects in the west end of the Greater Prudhoe Bay area, which could take nearly 10 years, further increasing the state’s oil production and adding jobs.
The additional development opportunities being evaluated include expansion and debottlenecking of existing Prudhoe Bay facilities, constructing a new drilling pad, and expansions of existing pads, including the drilling of more than 110 new wells.
The appraisal phase is expected to take 2-3 years and will include engineering work and securing regulatory approvals for multiple development projects.
“With this new tax law, the Alaska Legislature and Gov. Parnell have taken an important step toward improving Alaska’s long-term economic future,” said BP Alaska Region Pres. Janet Weiss. “BP is committed to being a part of that future.”
BP Exploration Alaska Inc. plans to issue a request for proposals for two additional rigs in Prudhoe Bay. The first drilling rig is expected to be in place by 2015 and the second in 2016. This will increase BP’s rig fleet in Alaska to nine.
Meanwhile, BP expects to increase well work as soon as the fourth quarter of 2013, a move intended to improve the performance of existing wells at Prudhoe Bay and Milne Point fields.
In addition, BP is working with other companies and the state of Alaska to commercialize ANS gas as part of a joint concept selection group focused on a South Central Alaska LNG project.
“We believe it is the right time to focus on how we move this project forward,” Weiss said.
Last year, BP Exploration Alaska indefinitely suspended its Liberty oil field project in the Beaufort Sea offshore Alaska, citing project engineering and economics although the company said it might redesign the project later (OGJ Online, July 12, 2012).
The BP unit had planned to drill wells nearly 2 miles deep and with offsets as long as 8 miles (OGJ, Oct. 2, 2006, p. 37).