BP this year will increase its capital investment in Alaska by 25% to $1.2 billion, the company's regional president said Monday.
"This includes a 40% increase in capital [for] activities designed to increase production -- drilling, well work, and major projects," Janet Weiss, president of BP Exploration Alaska, told the Anchorage Chamber of Commerce.
BP operates the Prudhoe Bay Field, the largest on the North Slope, as well as the Milne Point Field and several smaller producing fields.
Weiss told the chamber of commerce that the Prudhoe Bay field owners -- which include ConocoPhillips and ExxonMobil as well as BP -- have been stepping up investment since a law was passed modifying the state's oil production tax in 2013.
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Following the tax change the company announced a $1 billion plan for Prudhoe Bay to increase drilling and "workovers" of older producing wells, including the addition of two new drilling rigs in 2015 and 2016 and drilling 30-40 new wells.
Weiss said BP hoped to take a decision in 2015 on a $3 billion project to develop new production facilities on the west end of the Prudhoe Bay field.
"It would add a new well pad -- the first at Prudhoe in more than a decade. We would expand two other existing well pads and debottleneck our facilities, increasing flowline capacity [and] adding surface facilities. This would add 130 new wells and bring on 200 million barrels of new resources, adding 40,000 b/d down TAPS, or the Trans Alaska Pipeline System, beginning in 2018," Weiss told the chamber.
A new evaluation of the northern periphery of the Prudhoe Bay Field is also included in the list of new projects planned. A 190 square mile 3D seismic program will begin next year, Weiss said.
"Based on preliminary data, it would enable 55 million barrels of new resources and 30 new wells with potential development," Weiss said.
BP has also been working on developing a thin layer of undeveloped reservoir, the Sag River formation, that overlies the main Prudhoe Bay field.
"This faces both technical and economic challenges, but we've made progress toward overcoming some of these," Weiss said.
"We still need to work out some of the cost challenges, but we are moving forward with a 15-well program in 2015 and 2016. If successful, this particular program could enable a possible 200 wells and about 200 million barrels of resources with full development," she said.
One other project the company is pursuing is development of a viscous oil deposit, North West Schrader, in the Milne Point Field.
"The Northwest Schrader area would require $1 billion-2 billion of capital investment," Weiss said. "We are moving forward with some important trials over the next few years to ensure we have an economic project."
This could potentially add 80 million barrels of new oil resources at the Milne Point field. Weiss credited the state's change to the tax law for the increased investment.
"We're investing more back into Alaska, because oil tax reform has reset the balance such that we're back in the game to attract capital back to Alaska," she said.
--Tim Bradner, newsdesk@platts
--Edited by Haripriya Banerjee, firstname.lastname@example.org