Posted in: Infrastructure,
by Gregg Laskoski on Jun 18, 2013 06:00 AM
With all the attention that the Bakken formation has brought to N. Dakota, it's easy to forget about Alaska.
BP recently announced Monday that it will spend $1 billion to spark crude production from Alaska’s declining North Slope, weeks after the state decided to give the oil industry a $750 million annual tax cut.
The company says it plans to add two drilling rigs to its Prudhoe Bay field, bringing the count up to nine, the highest in about six years. New well work and drilling, along with upgrades of existing facilities, could support 200 new jobs, the company said.
According to FuelFix.com, with the agreement of BP's 'working interest partners' at Prudhoe Bay, including ConocoPhillips and Exxon Mobil Corp., BP will begin evaluating another $3 billion potential investment in additional development projects in the field’s west end.
The prospective development could include the construction of drilling pads and expansion of existing ones, possibly facilitating the drilling of more than 110 wells, following two to three years of appraisal and engineering work.
BP also will begin expansions and upgrades aimed at reducing bottlenecks at existing Prudhoe Bay facilities and better using the capacity of gathering centers that separate oil from natural gas and water. As the field has aged, more water is pulled out of the ground along with oil, and the facilities have been adapted to that dynamic. But newer areas generally yield an oilier mix. Handling them more efficiently can mean more production overall.
“There’s a lot more potential out there than when we brought these facilities up several decades ago, so we need some more facility capacity,” BP Alaska’s regional president, Janet Weiss, said in an interview. “It’s really about smartly using technology and the gathering centers’ capacity to fully utilize what’s up there and expand upon that.”
All of the changes seek to reverse the fortunes of Alaska’s North Slope — and the Trans-Alaska Pipeline System that transports the harvested oil to Valdez. Oil production from the North Slope peaked in 1988 at an average 2.02 million barrels per day, most of it from the Prudhoe Bay field that BP operates. It has been dropping ever since. But, that trend could quickly change.
BP said it expects to increase well work on the North Slope as soon as the fourth quarter of 2013, with the first additional rig expected on-site by 2015. A second would arrive in 2016.
Deeper infrastructure investment -- that's welcome news particularly for California as well as the Pacific Northwest!