Using horizontal drilling techniques that have led to phenomenal success onshore in North America, BP plc plans to spend $1.5 billion to tap a hard-to-reach offshore reservoir in the Arctic waters of the Beaufort Sea.

BP's Liberty project is buried beneath thousands of feet of rock on the Outer Continental Shelf about six miles off Alaska's northern coast. The project's remote location has stymied efforts by the London-based major to develop the field. However, refinements in drilling technology, including well bores that can pierce up to eight miles of shales and siltstone, now make the project viable.

"All the easy development is done," said BP Alaska President Doug Suttles. "Cutting-edge technology is going to define the future of the industry in Arctic oilfield engineering and development."

The reservoir is expected to yield about 100 million boe beginning in 2011. Included in the development costs is a specialized Arctic drilling rig to be built by Parker Drilling Co., as well as construction of several well bores centered on a man-made concrete island built earlier by BP. The extended-reach drilling plan is expected to yield a smaller environmental footprint and eliminate the need for offshore pipes in the frigid Beaufort waters.

BP operates several other oilfields offshore Alaska, including Northstar and Endicott. However, Liberty would be the first oilfield off the state's coast that is exclusively in federal waters.

At least four producers -- BP, ConocoPhillips, Italy's Eni Spa and Royal Dutch Shell plc -- plan to conduct seismic surveys offshore Alaska in the next few months after a federal judge in Anchorage earlier this month dismissed a lawsuit that prevented the seismic testing (see Daily GPI, July 7).

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