BP bullish on Slope oil

Photo/Lisa Siefert/For the Journal

North Slope oil fields have a lot of oil left in them, and BP Exploration (Alaska) Inc. said it expects that 7 billion barrels of oil can be produced from the existing oil fields or new satellite pools near them.

"These are real barrels, creating real jobs," not potential new discoveries, Steve Marshall, president of BP Alaska, told the Alaska Support Industry Alliance’s annual Meet Alaska Conference Jan. 25.

About 30 percent is oil reserves already proven in existing fields. The remainder is conventional oil that can be developed in and around the existing fields as well as the large viscous oil resource overlying the Kuparuk, Milne Point and Prudhoe Bay fields, Marshall said.

There is also the large potential of commercializing North Slope gas, he said.

Marshall defended BP’s decision to focus on developing new oil in and near existing fields, rather than engaging in new exploration programs. BP has not been successful in exploration in recent years and has had bad luck with two new projects, Northstar and Badami, on which the company has spent about $1 billion, he said.

Despite the potential in the existing fields, making Alaska more competitive is a challenge for the company, Marshall said.

"Our greatest competition is not other companies, but ourselves," he said, meaning the competition within BP to get money for new investment. The profitability of Alaska production is about one-third of what it is elsewhere in the world. The company’s efforts to reduce its support costs in Anchorage is important in improving competitiveness and attracting the investment needed.

While staff in Anchorage is being cut, the North Slope work force will be increased to deal with infrastructure maintenance, Marshall said.

Meanwhile, BP has a $700 million capital budget for Alaska this year, 20 percent more than it was spending through most of the 1990s, Marshall said.

On the exploration front, an Anadarko Petroleum Corp. official, a company engaged in new exploration, said it has identified four separate oil and gas prospects that are good candidates for drilling, as well as seven other prospects that are in various stages of study.

11/12/2016 - 4:47pm