Restarting Prudhoe Bay production may take months, says BP

[n2doc]

BP vague on Prudhoe Bay restart, may take months

Last Update: 8:07 PM ET Aug 7, 2006

NEW YORK (MarketWatch) -- The restart of crude oil production at the BP PLC-operated (BP) Prudhoe Bay field in Alaska could take months as the Anglo-American energy major works to diagnose and repair problems in a pipeline system.
BP said late Sunday it had begun the shutdown of Prudhoe Bay, the largest producing oil field in the U.S. accounting for 8% of domestic output, after discovering severe corrosion along a transit line.
Bob Malone, president of BP America, said that in a worst-case scenario, it could take weeks or months to replace the pipelines. But the company said it will try to put portions of the network back into operation as they are repaired. "BP deeply regrets it has been necessary for us to take this drastic action," Malone said.
The unprecedented move in Alaska's North Slope hydrocarbons province sparked a rally in energy prices and elicited a response from the Organization of Petroleum Exporting Countries, which said it would be able to cover the shortfall of 400,000 barrels a day.
Although the U.S. West Coast is highly dependent on crude supply from Prudhoe Bay, many refiners said they didn't expect to cut processing rates in the near term. The legendary oil field has been producing since 1977 and hit peak output of about 1 million barrels a day in the late 1980s. Since then, the field has been in gradual decline.
In the past weeks, the burgeoning infrastructure problems have led to erratic oil flows from the North Slope, which usually ships about 800,000-850,000 barrels a day through the Trans-Alaskan Pipeline System.
Oil production at Prudhoe Bay could take six months or, perhaps, as much as a year to return to normal, Societe Generale said, citing an assessment by one of the bank's engineers with an oil-field services background.
"Three weeks is the absolute minimum," said Deborah White, an energy analyst with Societe Generale in Paris. "Six weeks makes a more likely base case."

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[Nikki Stone 1]

1. Apparently, California is going to get screwed by this

I was watching the early news this morning, and it seem that the West Coast is most dependent on this particular pipeline. Our gas prices (which are already higher than most of the nation) are expected to go up even further.

[Nikki Stone 1]

2. Also, BP made record profits this year and has not done anything

about their infrastructure.