BP slows Alaska offshore oil drill plan

By Yereth Rosen

ANCHORAGE, Alaska (BestGrowthStock) – BP Plc’s Alaska unit will probably delay development drilling in an offshore field that has become controversial in the aftermath of the Deepwater Horizon disaster in the Gulf of Mexico, a spokesman said Wednesday.

Drilling at the offshore Liberty field, originally expected to start late this year, will likely not start until 2011, said Steve Rinehart, a spokesman for BP Exploration (Alaska) Inc. He said the extra time was due to plans by federal and state agencies to further review Liberty.

“If the government seeks additional review of the project, we will of course cooperate. We want to make sure questions are addressed, and we don’t want a firm or announced drilling schedule to impede a full process,” he said in an email.

The Deepwater Horizon disaster in the Gulf of Mexico has caused political leaders and environmentalists to question the integrity of BP’s plans and BP’s competence to carry them out.

U.S. Senator Frank Lautenberg, a New Jersey Democrat, has been among those calling for a suspension of Liberty development pending more investigation.

“While we had hoped to begin drilling the first oil well by the end of this year, it has become clear it will likely be next year before we begin. We will take our time and work safely,” Rinehart said.

BP still expects commercial production at Liberty to start in 2011, he added.

Liberty, with an estimated 100 million barrels of recoverable oil, is expected to become the first producing oil field located entirely in federal waters off Alaska.

BP’s plan is to tap into the reservoir by using ultra-extended-reach drilling from an existing causeway-linked island that currently supports facilities for the Endicott field. Construction crews have been working since last year to expand that island so that is can support Liberty production.

Many Inupiat Eskimo leaders and Alaska environmentalists — normally harsh critics of offshore development in Arctic waters — have praised BP’s plan to drill from shore rather than place a drill rig in the sensitive Beaufort Sea. That plan reduces many of the risks associated with offshore drilling, including water pollution and underwater noise, which disturbs marine animals, they have maintained.

A local spokesman for the agency that oversees oil development in federal waters said BP had not yet applied for any permit to drill or indicated a precise drilling schedule for Liberty.

“Our understanding has been all along that it’s something of a moving window,” said John Callhan, spokesman for the Alaska office of the Bureau of Ocean Energy Management, Regulation and Enforcement, formerly known as the Minerals Management Service.

The agency has issued new directives to oil companies operating in federal waters, called Notices to Lessees, ordering better safety measures and better documentation nationwide, Callhan said.

With those new rules in place and additional new rules anticipated, it is logical that BP would slow its schedule for Liberty drilling, he said.

“It just makes sense that, with the new NTLs coming along, they’re not going to make any commitments,” he said.

(Editing by Walter Bagley)

BP slows Alaska offshore oil drill plan