Oil Industry Development Praised
July 16, 2008
BP announced Monday that it
had sanctioned the development of its Liberty prospect in the
federal waters in the Beaufort Sea Outer Continental Shelf.
BP will push the envelope of technology by drilling ultra extended
reach wells, with the largest land rig in the world. This technology
will minimize the impact of the Liberty development on the environment.
"I want to congratulate Alaska's oil industry and our Department
of Natural Resources for these pro-development achievements,"
Governor Palin said. "Our state has the resources and the
people to address the nation's energy needs. Alaska remains
an attractive and inviting place for oil and gas industry investment.
I look forward to more good news in the future."
When production begins in 2011, the state will share in the royalties
paid by BP to the federal government. Under existing law, the
state will receive 27 percent of the royalties or almost 5 million
barrels over the life of the project. The state and other producers
on the North Slope will also benefit from potentially lower tariffs
on the TAPS pipeline. At its peak in 2014, Liberty will produce
40,000 barrels per day and contribute to an increase of 6 percent
of total TAPS throughput.
BP's Liberty announcement comes along after a string of good
news in Alaska's oil patch. ConocoPhillips last week announced
"first oil" from its Qannik prospect in the Colville
River Unit. Qannik production will peak in 2009 at 4,000 barrels
per day. With potential expansion the prospect may yield over
25 million barrels. On June 13, 2008, Pioneer began production
from its Oooguruk field. Oooguruk is a 90 million barrel oil
field that will reach peak production of 20,000 barrels per day
in 2010. Pioneer is one of the new independents now working
in Alaska and is the only independent operator on the North Slope.
Soon to follow Pioneer as operator of a new producing oil field
is the major Italian oil company ENI which sanctioned the neighboring
Nikiatchuq oil field in January 2008. Development of this oil
field is now underway.
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