BP focuses its strategy and investment in Alaska on the known resources; on renewing its North Slope infrastructure; on ensuring safe and sustainable operations; and on commercializing Alaska natural gas.
The technology playTypically less than half the oil from a reservoir is recovered, but using new technology BP has demonstrated that we can improve on that recovery rate.
Alaska has long been a major US oil production region, but North Slope production continues to decline. Today the Trans-Alaska Pipeline carries less than one-third of what it did at its peak of 2 million barrels a day. After more than 33 years of production, the North Slope still has a large amount of the discovered oil and gas left. BP is actively pursuing new ways to develop these remaining, more challenging North Slope resources including heavy and viscous oil, light oil from smaller, more remote fields, and natural gas. BP is exploring these resource opportunities with technologies such as 3-D seismic imaging, innovative drilling techniques, carbon dioxide for enhanced oil recovery, low-salinity water flooding, and Bright Water™ polymer technology.
Renewal of North Slope infrastructureSafe and reliable operations continue to be the focus of our Alaska business. In 2011 we invested a third of our capital budget in Alaska in infrastructure renewal. Since 2006, BP has significantly increased spending on corrosion monitoring and prevention, such as in-line smart-pig inspections. Annually, BP conducts more than 100,000 pipeline inspections for corrosion under pipeline insulation on the North Slope.
In 2008, BP commissioned a new 16-mile oil transit line system. The $500 million project included rebuilding the main Prudhoe Bay oil delivery system, installing pigging modules, building corrosion inhibitor injection facilities, and state-of-the-art leak detection, metering facilities and installing all the affiliated electrical and emergency systems. This project incorporated the best technology and materials to ensure continued safe operations.
Alaska gas pipelineAlaska's North Slope natural gas is one of the largest undeveloped resources in BP's global portfolio. The US Department of Energy estimates the discovered, technically recoverable natural gas on the North Slope to be about 35 trillion cubic feet.
At Prudhoe Bay, up to 8 billion cubic feet of natural gas is produced daily and injected back into the ground to maintain reservoir pressure and produce more oil. This injection has improved oil recovery and extended the life of the field beyond initial estimates. In addition, some components of the produced natural gas are used to make miscible injectant, which is used for enhanced oil recovery.
Other than the small portion of gas that is liquefied as NGLs for shipment down the TransAlaska Pipeline, there is no means to transport North Slope gas to markets. Today, Alaska gas is facing intense competition from abundant shale gas resources in the Lower 48 states. The Department of Energy estimates that by 2020, unconventional gas, such as shale gas, will account for more than 50 percent of total US production. However, BP is committed to evaluating alternatives to commercializing its North Slope gas resources, and is working with other major North Slope gas lease owners to determine the commercial feasibility of Alaska LNG export.