BP to suspend production at Badami

Posted: Tuesday, July 08, 2003

FAIRBANKS (AP) BP Exploration (Alaska) Inc. will halt production Aug. 1 on the Badami oil field, a once-promising North Slope site about 25 miles east of Prudhoe Bay.

Expected to yield 30,000 barrels of oil a day, production at Badami slowed to 1,300 barrels a day in recent years and the oil giant decided to cut its losses.

''What we're looking at is a 'warm shutdown,' which means a suspension of operation, not a plugging and abandonment,'' said BP spokesman Daren Beaudo.

The company recently received state permission to mothball the site until summer 2005, Beaudo told the Fairbanks Daily News-Miner.

The field was expected to hold about 115 million barrels when drilling began on the first production wells in September 1997. Early estimates predicted it would continue operation for up to 20 years.

''(We) probably do have a soft spot in our hearts for Badami because it was the first oil field in the Slope to be developed outside of the existing Prudhoe Bay system in several years and kind of started a new round of development in the slope in the late '90s,'' said Rhea DoBosh, spokeswoman for the state-federal Joint Pipeline Office.

However, the field proved tougher to squeeze oil from than BP expected and production peaked for a brief period at about 18,000 barrels a day.

''The field has certainly been a disappointment. The geology was more difficult than what we thought when we invested $300 million into that,'' Beaudo said.

He said the experience underscores the risks involved in the speculative business of oil development.

Buildings and pipeline used at Badami will be maintained as BP decides their future use. The site includes a pipeline, camp and airstrip.

''Some of the things we're considering include using the infrastructure to facilitate development potential development of Point Thomson, Liberty or other eastern North Slope oil accumulations,'' Beaudo said.

BP has scaled back the work force at Badami, with only about 15 workers remaining. Most are contractors.

''As we get closer to ultimately suspending the operation, we'll still run with something of a skeleton crew (of about four people),'' Beaudo said.

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