BPs giant Alaska oil field may recover by January

BPs giant Alaska oil field may recover by January

Wednesday, August 9th 2006

BP’s (BP.L) giant oil field in Alaska could return to full production by January after the company fixes pipeline corrosion that triggered multiple leaks on the tundra, the U.S. government said Tuesday.

International oil major BP began shutting its Prudhoe Bay field, the largest in the United States, on Sunday after finding a small spill. Oil prices soared on concerns about supply during downtime to the field, which can produce 400,000 barrels per day or 8 percent of domestic oil production.

The U.S. Energy Information Administration said on Tuesday that the field, would fully recover from the shutdown by January 2007.

BP said Monday it was shutting down the field slowly, a process that could take five days. But U.S. Energy Secretary Sam Bodman said Tuesday that BP may also be able to leave some of the field in operation.

The closure is the latest incident to hit BP’s Alaskan operations, a cornerstone of its portfolio. It also dealt another blow to the company’s U.S. image following a deadly refinery explosion in Texas last year and a trading scandal.

In its short-term energy outlook, the EIA said Alaskan crude oil production will be reduced by 300,000 bpd in August, and 400,000 bpd in September and October.

In November, production could begin restarting slowly, with full recovery seen by January, the EIA said.

Bob Malone, the head of BP’s operations in the United States, said on Monday the company had decided to replace both pipelines in the field due to corrosion and that it could be weeks or months before the production resumes.
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