BP plans to invest in Alaska

July 14, 1997 Alaska's leading producer of oil, BP, is making plans to expand exploration and production projects in Alaska's Beaufort Sea at a cost of approximately $ 1.5 billion. Richard L. Olver, recently said there is enormous potential left for discovery and development of new reserves in the region, even excluding those within the Arctic National Wildlife Refuge (ANWR). British Petroleum estimates that there are at least 5 billion barrels of oil yet to be discovered north of Prudhoe Bay. Olver, "We believe that almost all the new reserves will come from known resources, however, resources that are either in or adjacent to existing fields." About 4 billion barrels would come from known sources and present fields. One additional billion barrels of oil would come from new exploration projects in fields yet to be discovered.
One of the first exploration projects will occur in the Northstar field encompassing about 60 square miles. Northstar lies about 4 miles north-west of the Point McIntyre field. It was initially discovered by Shell Oil in 1983. With Amerada Hess, Shell drilled 5 appraisal wells before making the determination that the field would be too costly to develop. In 1991, conceptual engineering indicated that development costs would run $ 1.5 billion. British Petroleum acquired the acreage from Shell and Amerada Hess in 1995 and estimates its current capital costs of development at about $ 380 million. When developed, it will be the first production of federal acreage in Alaska.
British Petroleum is also looking at developing Milne Point north of Prudhoe Bay. Recoverable reserves are now estimated at about 330 million barrels, compared to estimates of 100 million barrels 18 months ago. BP Exploration acquired Milne Point field from Conoco and Chevron in 1993. BP has since drilled 50 wells and plans to drill 37 more wells this year. Last month's oil production exceeded 50,000 bpd, twice the rate of one year ago. Ultimately, British Petroleum hopes to increase production to 100,000 bpd. Despite this output, this only represents 3 % of the North Slope's total oil output of 1.5 million bpd.
The industry argued with environmentalists for nearly a decade before they were able to build a pipeline from Prudhoe Bay to Valdez where it is now tankered to world-wide markets. Alaska accounts for about 25 % of U.S. total oil production.