BP again delays development of Liberty field
The BP Liberty heavy drill rig is seen here on the North Slope in a 2010 file photo. Technical issues with the extended reach, horizontal drilling project have forced BP to reevaluate the cost estimates and development has been postponed indefinitely.
BP has deferred development of the small Liberty field in the Beaufort Sea northeast of the Prudhoe Bay and Endicott fields, this time indefinitely. The company would give no timetable on when the project could be developed.
BP spokeswoman Dawn Patience said June 29 that technical problems with the company’s plan to produce the field with ultra-extended reach production wells drilled from shore have caused the company to revamp the project after an 18-month review of the development plan and a heavy drill rig was built to drill the wells.
“Our review showed that the project cost would be substantially higher than the $1.5 billion we had estimated, and that it would take several years longer to complete,” she said.
Liberty has estimated reserves of 100 million barrels and is five miles offshore in shallow water. If developed, BP believes it would produce about 40,000 barrels per day at peak, Patience said.
The current plan, now on hold, is to drill extended-reach wells to the reservoir from a satellite gravel production island that is part of the Endicott field, which is two miles offshore and connected to shore by a gravel causeway. The wells that were planned would be as long as eight miles in horizontal departure from the drill rig, and set world records, BP has said previously.
The specialized, special-purpose rig for the Liberty project has been constructed and is now on the North Slope at the Endicott field production island. BP owns the rig but it was built by Parker Drilling Co.
Patience said discussions are under way with several companies who were involved with the rig, but those are confidential.
BP and other companies had hoped that development of Liberty with wells drilled from shore would demonstrate that capability and possibly open other near-shore deposits to development using similar techniques.
Other options for developing Liberty will be discussed with federal and state regulatory agencies, Patience said. A decade ago BP developed a similar small offshore field west of Liberty, the Northstar field, with an artificial gravel island and a subsea pipeline to shore.
Northstar, which is six miles offshore at Prudhoe Bay, has been in production since 2001, but with Liberty BP had rejected the artificial gravel island approach because Northstar wound up costing more and taking longer to build than expected.
One reason for the delays at Northstar was the extraordinary scrutiny by regulatory agencies because it was the first true offshore production island in the Arctic.
Federal and state agencies, and the North Slope Borough, are very sensitive to any oil production installation built in the ocean because of worries of problems with ice and an oil spill. The Endicott field, built in 1986, is technically an offshore field but it is close to shore, about two miles out, and water depths are so shallow, two to five feet, that there is virtually no moving ice present in winter.
Northstar, however, was a first because its production island was built beyond the protective barrier islands along the northern Alaska coast, so that the island is fully exposed to winter icepack movement and summer storms. Another first was the construction of the first buried subsea oil pipeline, and although the distance was short – six miles – there were still concerns about gouging of the sea bottom by the “keels” of heavy packice that extend down in the water. In the last 10 years, the island and the pipeline have withstood those natural forces, however.
Liberty is almost the same distance offshore as Northstar but is in a more benign ice environment because of barrier islands further offshore which block the heavy polar icepack. There is mostly stable “shorefast” ice at Liberty’s location.
Tim Bradner can be reached at email@example.com.