BP Plans to Pull Another 2B Barrels of Oil from Alaska's Prudhoe Bay

"We're still drilling 60 or 70 new wells a year, and it comes down to a progression of technology, the resource value and the opportunity to access a very large oil-in-place volume using modern drilling techniques," Senior BP Petroleum Engineer Gordon Pospisil said in a comment to Reuters.

Pospisil is speaking of the vast resources of Alaska's Prudhoe Bay, the biggest oil field in the United States. While production has been waning for about 20 years, technology has finally caught up with this massive field.

BP is hoping to produce another 2 billion barrels of crude from Prudhoe Bay -- that's on top of the 11 billion barrels the field has already produced in the last 30 years.

The key to this optimistic production is the heavy oil trapped in the field. What was once considered non-commercial has now become surprisingly sought-after because oil prices have topped more than $100 a barrel, and improved technologies have made it more commercially realistic to tap heavy oil.

Improved technologies that are being incorporated at Prudhoe Bay include advanced water injection to increase recovery rates and the use of coiled tubing to transform antiquated vertical wells into horizontal wells at a lower cost, Pospisil said.

"We began pushing the technology envelope in the late 1980s as the Prudhoe Bay field began its natural decline and we haven't stopped since," said Steve Marshall, president of BP Exploration (Alaska). "Initially, producers expected to recover about 9.6 billion barrels from Prudhoe Bay. Today, primarily through advances in drilling and well completion techniques, and aggressive reservoir management that has included waterflood and enhanced oil recovery, about 13 billion barrels will be recovered."

The largest field in North America, Prudhoe Bay was discovered in 1968 and started producing 9 years later. Spanning more than 200,000 acres, the field is located 250 miles north of the Arctic Circle, about 1,200 miles from the North Pole. The Trans Alaska pipeline starts in the field, traveling 800 miles to a terminal at Valdez.

Estimated to hold 25 billion barrels of original oil in place, the field's maximum rate of production of 1.5 million barrels per day was reached in 1979 and held for 10 years. Since then, production has been declining at a rate of 10% a year, according to BP.

BP is the operator of Prudhoe Bay with 26% interest. ConocoPhillips Alaska Inc. holds 36% interest, ExxonMobil holds 36% interest, and the remaining 2% interest is held by six other companies. According to BP's website, the main owners have invested more than $25 billion in the field and and in the necessary transportation to get the valuable commodity to market.

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