Greater Prudhoe Bay Shutdown Update
August 7, 2006
Business Resumption
Priorities:
During a press conference conducted by Bob Malone, Chairman and President of BP America, Inc., and Steve Marshall, Strategic Performance Unit Leader for BP Alaska, they announced that BP has decided to replace 16 miles of transit lines in the Greater Prudhoe Bay Field. Furthermore, BP will work with regulators in a parallel plan of identifying lines that may be safe to restore to near-term operations.
Our priorities are and will continue to be:
§ Assure safety of our people and the integrity of our operating infrastructure
§ Minimize the impact to the environment and finish cleaning up the FS-2 oil transit line spill.
§ Work in cooperation with State and Federal Agencies on our plan to shut down Prudhoe Bay in a safe, orderly and systematic way.
§ Work in cooperation with State and Federal Agencies to restore production as quickly as we can safely do so.
Background & Current Actions
§ BP Exploration (Alaska) Inc. (BPXA), as operator of the Prudhoe Bay field, began a phased and orderly shutdown of production of the Prudhoe Bay oilfield as the result of a smart pig inspection that indicated corrosion on one of its Eastern Operating Area (EOA) crude oil transit lines. The line, which transports crude oil from the Flow Station 2 producing area, was shut in.
§ We have been proceeding over last few weeks to fulfill our commitments to clean, scrape and smart-pig all transit lines at Greater Prudhoe Bay.
§ On Friday, we received preliminary data on the FS-2 to FS-1 transit line with unexpected results. There were 16 anomalies in 12 different locations with the wall thickness loss of 70% or more. We immediately conducted a detailed inspection at each of these locations and identified an area of oil leakage. The leak was contained and clean-up efforts are underway with 50% cleaned-up at this time. Recovery from this source is ongoing at a declining leak rate. No other leaking oil has been observed and visual spill detection measures have been increased.
§ The anomalies did not meet our expectations compared to the corrosion mechanism model developed in response to the GC-2 line situation earlier this year.
§ Through an abundance of caution, we decided to shut-down the production of Greater Prudhoe Bay. We are proceeding with sequentially shutting-down the other facilities applying the appropriate freeze protection. This process is expected to be completed over the next 5 days.
§ The Lisburne line was pigged and smart-pigged and confirmed in good condition with 17mbd. The Lisburne field will be left in operation.
§ The timeframe for a complete safe and orderly shutdown is still being determined. The Prudhoe Bay pipelines and facilities will not return to normal operations until BPXA is satisfied they meet all BP and regulatory operations criteria.
§ Total production impacted by the decision to shut-in the operating area is about 400,000 barrels per day. This volume comprises about 50% of all North Slope production.
§ We are mobilizing additional inspection resources from operations across Alaska and North America to continue to evaluate the conditions of the crude oil transit lines to ensure safety and environmental protection before returning the Prudhoe Bay to normal operations.
§ We will be working with the State of Alaska and its agencies on the planned shut-down of the Greater Prudhoe Bay oilfield. We are conducting a parallel study with the agencies to determine the possibility of operating parts of field but only if it can be done safety.
Please Note
§ We will ensure that you are informed about the ongoing efforts to address the transit line issues and to resume production via daily communications.
Maureen Johnson
GPB Business Unit Leader
August 7, 2006
Business Resumption
Priorities:
During a press conference conducted by Bob Malone, Chairman and President of BP America, Inc., and Steve Marshall, Strategic Performance Unit Leader for BP Alaska, they announced that BP has decided to replace 16 miles of transit lines in the Greater Prudhoe Bay Field. Furthermore, BP will work with regulators in a parallel plan of identifying lines that may be safe to restore to near-term operations.
Our priorities are and will continue to be:
§ Assure safety of our people and the integrity of our operating infrastructure
§ Minimize the impact to the environment and finish cleaning up the FS-2 oil transit line spill.
§ Work in cooperation with State and Federal Agencies on our plan to shut down Prudhoe Bay in a safe, orderly and systematic way.
§ Work in cooperation with State and Federal Agencies to restore production as quickly as we can safely do so.
Background & Current Actions
§ BP Exploration (Alaska) Inc. (BPXA), as operator of the Prudhoe Bay field, began a phased and orderly shutdown of production of the Prudhoe Bay oilfield as the result of a smart pig inspection that indicated corrosion on one of its Eastern Operating Area (EOA) crude oil transit lines. The line, which transports crude oil from the Flow Station 2 producing area, was shut in.
§ We have been proceeding over last few weeks to fulfill our commitments to clean, scrape and smart-pig all transit lines at Greater Prudhoe Bay.
§ On Friday, we received preliminary data on the FS-2 to FS-1 transit line with unexpected results. There were 16 anomalies in 12 different locations with the wall thickness loss of 70% or more. We immediately conducted a detailed inspection at each of these locations and identified an area of oil leakage. The leak was contained and clean-up efforts are underway with 50% cleaned-up at this time. Recovery from this source is ongoing at a declining leak rate. No other leaking oil has been observed and visual spill detection measures have been increased.
§ The anomalies did not meet our expectations compared to the corrosion mechanism model developed in response to the GC-2 line situation earlier this year.
§ Through an abundance of caution, we decided to shut-down the production of Greater Prudhoe Bay. We are proceeding with sequentially shutting-down the other facilities applying the appropriate freeze protection. This process is expected to be completed over the next 5 days.
§ The Lisburne line was pigged and smart-pigged and confirmed in good condition with 17mbd. The Lisburne field will be left in operation.
§ The timeframe for a complete safe and orderly shutdown is still being determined. The Prudhoe Bay pipelines and facilities will not return to normal operations until BPXA is satisfied they meet all BP and regulatory operations criteria.
§ Total production impacted by the decision to shut-in the operating area is about 400,000 barrels per day. This volume comprises about 50% of all North Slope production.
§ We are mobilizing additional inspection resources from operations across Alaska and North America to continue to evaluate the conditions of the crude oil transit lines to ensure safety and environmental protection before returning the Prudhoe Bay to normal operations.
§ We will be working with the State of Alaska and its agencies on the planned shut-down of the Greater Prudhoe Bay oilfield. We are conducting a parallel study with the agencies to determine the possibility of operating parts of field but only if it can be done safety.
Please Note
§ We will ensure that you are informed about the ongoing efforts to address the transit line issues and to resume production via daily communications.
Maureen Johnson
GPB Business Unit Leader
