BP plc’s Alaska presence will become more visible over the next five years as the oil major pours an additional $1 billion into natural gas and oil development on the North Slope with a to-do list that includes more drilling rigs and more workers.
The new spending plans follow Gov. Sean Parnell’s signature in May on a favorable industry tax policy revamp (SB 21), as well as authority for the Alaska Gasline Development Corp. (HB 4) to launch gas pipeline development from the North Slope to serve Fairbanks and Southcentral Alaska (see NGI, April 22).
“We believe it is the right time to focus on how we move this project forward,” BP Alaska Region President Janet Weiss said. The state’s revamped oil and gas tax policy is “an important step toward improving Alaska’s long-term economic future. Our announcement…should make abundantly clear that BP is committed to being a part of that future and to continuing to extend the life of North America’s largest oilfield.”
For its North Slope operations, BP plans more well-work activity, upgraded facilities and a near 10% hike to its state workforce with the addition of 200 people. BP now has 2,300 employees working in Alaska. It already has been working to commercialize Alaska North Slope gas.
Now BP has secured the support of its Prudhoe Bay producer partners to evaluate another $3 billion in new development for the west end of the Greater Prudhoe Bay area, which could continue for nearly 10 years. BP-operated oilfields account for two-thirds of all Alaska production, including Prudhoe Bay, the largest oilfield in North America and among the 20 largest fields ever discovered worldwide.
Projects to be reviewed by BP and its partners over the coming decade include drilling more than 110 new wells, expanding/debottlenecking existing facilities, constructing an additional drilling pad and expanding existing ones. The appraisal phase could take two to three years, including the engineering work and the time necessary to secure regulatory approvals for multiple projects.
“Now that an improved tax structure is in place, oil and gas projects can once again move forward, keeping Alaska competitive in the midst of America’s recent energy renaissance,” Weiss said.
BP Exploration (Alaska) Inc. plans to begin issuing requests for proposals this summer to add two rigs in Prudhoe Bay, the first in 2015 and the second in 2016, which would increase its rig count in the state to nine. Additional well work in the region could begin by the end of this year to improve the performance of existing wells at the Prudhoe Bay and Milne Point fields.
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