The new operator of a long-delayed offshore oil prospect in the Beaufort Sea is moving forward with a new plan modeled on old fields.
Hilcorp Energy Co., the privately held, Texas-based exploration and production company that acquired many of BP Plc's Alaska assets, has completed its plan to develop the offshore Liberty prospect and start producing oil from it, the Bureau of Ocean Energy Management said Friday.
The new Liberty development and production plan is deemed "submitted," according to BOEM terminology, meaning that public review and a formal environmental impact statement will start.
Liberty, estimated by BOEM to hold 150 million barrels of recoverable oil, is about 5.5 miles offshore and about 20 miles east of Prudhoe Bay.
The prospect, which got its start in the 1980s as a Royal Dutch Shell exploration project, was pursued by BP for nearly two decades. BP last year sold a 50 percent share of Liberty to Hilcorp, among other Alaska assets, and in November? Hilcorp became the unit's operator.
Hilcorp's development and production plan proposes constructing a gravel island to support drilling activities, following a model that BP used to develop the Northstar unit, in production since 2001, BOEM said.
The Liberty island would be built in federal waters about 19 feet deep and about five miles off the Beaufort Sea coast, BOEM said. It would provide a work surface of about 9.3 acres, BOEM said (the Northstar island was six acres). Such gravel islands have been used elsewhere on the North Slope, at the Oooguruk and Nikaitchuq units in the Beaufort Sea, BOEM noted.
If developed, Liberty would be the first producing oil-field unit located entirely in the federal outer continental shelf area off Alaska.
Friday's agency action deeming the plan complete does not mean Hilcorp's development of Liberty is approved, BOEM said.
"BOEM will conduct a rigorous evaluation of this DPP, recognizing the significant environmental, social and ecological resources in the region and honoring our responsibility to protect this critical ecosystem, our Arctic communities, and the subsistence needs and cultural traditions of Alaska Natives," BOEM Director Abigail Ross Hopper said in a statement. "Any activity proposed offshore Alaska is scrutinized using the highest safety, environmental protection, and emergency response standards."
Hilcorp's plan to build an artificial island for Liberty echoes the first Liberty development plan submitted by BP 15 years ago. BP scrapped that plan and replaced it in 2007 with an ambitious plan to develop the offshore field from land, using new ultra-extended-reach drilling technology.
The Minerals Management Service, the precursor to BOEM, approved BP's development plan in 2008.
That year, BP announced that it was devoting $1.5 billion to Liberty, said first oil would flow in 2011 and touted its plan as using cutting-edge technology that would result in the world's longest laterally reaching oil wells.
But following the 2010 Deepwater Horizon disaster in the Gulf of Mexico and after the company encountered numerous problems with the custom rig it had ordered to drill the ultra-extended-reach Liberty wells, BP scrapped that development plan in 2012.
Hilcorp, in addition to taking over half ownership and the operator position at Liberty last year, also acquired full ownership of the Northstar and Endicott units and half ownership and the operator position at the Milne Point unit.