* Decision made after 18-month review
* Project would have cost "a lot more" than $1.5 bln
* Liberty project has history of delays, problems
By Yereth Rosen
ANCHORAGE, Alaska July 9 BP has
indefinitely suspended a $1.5 billion offshore oil project in
Alaska due to cost overruns and technical setbacks, a company
spokeswoman said on Monday.
An 18-month company review concluded that the Liberty
project, a field with about 100 million barrels of recoverable
oil, should not go forward as planned, said Dawn Patience with
BP Exploration (Alaska) Inc.
"We are not going to pursue Liberty in its present form,"
said Patience. "The project, as it's designed right now, doesn't
meet BP's standards."
Under plans submitted five years ago to regulators, Liberty
would have been the first oil field located entirely in Federal
waters offshore Alaska. Back then, BP expected production to
begin in 2011.
A BP review found that Liberty -- slated to produce 40,000
barrels a day -- would have cost "a lot more" than the $1.5
billion BP had planned to spend there and would have taken
several additional years to begin production, Patience said.
BP may still try to develop Liberty later.
The project "has to be discussed with regulators before we
could move forward with a (new) plan," Patience said.
BP has informed federal regulators it is seeking to redesign
the development, said a spokesman for the U.S. Bureau of Ocean
"They're talking about putting together a plan for another
approach," said John Callahan, a BOEM spokesman in Anchorage. BP
officials met last week with BOEM officials to discuss potential
changes to the Liberty development plan, he said.
HISTORY OF DELAYS
Monday's announcement is the latest in a series of delays
and technical problems for Liberty.
A 1998 plan to develop the offshore field was shelved in
2002 because of cost concerns, according to an environmental
A redesigned plan was submitted to Federal regulator
Minerals Management Service in 2007. It called for BP to develop
and produce Liberty from shore, using ultra-extended-reach wells
to target an offshore reservoir up to eight miles away. Liberty
oil was to be drilled from an existing island-causeway system
used for BP's Endicott field, and would have been processed at
Endicott's facilities, according to BP's plan.
At the time, officials with the North Slope Borough and
other local organizations hailed the idea as innovative, saying
it was safer for the environment than the alternative of
constructing a new artificial island and stand-alone processing
Construction work began in 2009 at Endicott to accommodate
But in 2010, BP announced another delay, citing rig-design
problems, regulatory changes, and new scrutiny of the Liberty
project following BP's Deepwater Horizon disaster in the Gulf of
Mexico. That kicked off a comprehensive review of the project,