BP Exploration (Alaska) Inc. plans to spend more than $10 billion on capital projects over the next decade, a company executive said Thursday.
Nov. 19BP Exploration (Alaska) Inc. plans to spend more than $10 billion on capital projects over the next decade, a company executive said Thursday.
Angus Walker, BP's commercial vice president, said the planned investment is aimed at anchoring its business in the state.
"That's how much we need to invest in our Alaskan business over the next 10 years in order to build the foundations for a business that will remain strong and sustainable for the next 50 years," Walker told a group of about 400 people gathered at the Resource Development Council's annual conference in Anchorage.
BP's capital budget for 2005 is $700 million, split evenly between investments on the North Slope and investments in the transportation infrastructure. That doesn't include the $800 million BP spends annually to operate and maintain its Alaska properties, Walker said.
Rather than exploring afar for new fields, BP will focus on known oil and gas reserves near existing infrastructure, Walker said.
Its capital projects will focus on getting more light oil from today's declining fields; increasing production of viscous, or "heavy" oil; reducing costs; and commercializing North Slope natural gas, Walker said.
Walker made his remarks during a panel on new investment and future prospects in Alaska's oil and gas industry. Jim Bowles, the newly minted president of ConocoPhillips Alaska Inc., also was a panelist. BP and Conoco run all the North Slope oil fields.
As does BP, Conoco plans to invest in heavy oil development, including as much as $500 million with its partners to boost production at its West Sak field. But Conoco also plans to continue exploring for new reserves, Bowles said.
By year's end, Conoco will have drilled six exploration wells, and it will be very active this winter as well, Bowles said, without giving a specific projection.
Conoco also will continue developing smaller satellites adjacent to its existing oil fields, Bowles said.
He highlighted Conoco's plan to develop as many as five new reservoirs near its highly productive Alpine field. This week, the company got permission to develop on two of them that are in the U.S. Bureau of Land Management's jurisdiction, leaving only one more permit needed before it has all the necessary permits, he said.
"We're very hopeful that we can get that project started this winter," Bowles said.
Bowles, Walker and many other participants in Thursday's panels expressed some optimism about the prospects for getting a natural gas pipeline project started in light of recent developments.
Last month Congress approved financial incentives for building a 3,500-mile pipeline that would take natural gas from Alaska's North Slope to the Lower 48. Its cost has been estimated at $20 billion. Negotiations are under way on the extent of state support and involvement in the project.
Graham Vangegan, a Conoco executive who's been working on the pipeline project, said they're aiming to have a contract proposal ready for state lawmakers to consider next year.
TransCanada Corp.'s vice president for its Alaska pipeline project, Tony Palmer, said if the commercial terms are settled by the end of 2005, a pipeline could be carrying gas by 2012. The gas transmission company is vying to build the line and already has regulatory approvals in Canada, he said.
But Vanhegan said it would take nine to 10 years to complete the project, making 2014 the best-case completion date.
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