British energy giant BP plc (BP: Quote,BP.L) has indefinitely deferred the development at its Liberty oil project in Alaska following the completion of its 18-month review of the project, according to media reports on Monday. The review revealed that the project cost would be substantially higher than the $1.5 billion estimated earlier.
The Liberty field is in the Beaufort Sea northeast of the Prudhoe Bay and Endicott fields, having estimated reserves of 100 million barrels and is five miles offshore in shallow water. It is expected to produce about 40,000 barrels per day at peak.
BP was forced to reevaluate the cost estimates and development of the Liberty field due to technical issues with the extended reach, horizontal drilling project. The plan was to drill extended-reach wells to the reservoir from a satellite gravel production island that is part of the Endicott field, which is two miles offshore.
The company's plan to produce the field with ultra-extended reach production wells drilled from shore has caused it to revamp the project. BP had earlier estimated production to begin in 2011.
BP closed Monday's regular trading session at $39.67, up $0.04 or 0.10% on a volume of 3.07 million shares.
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by RTT Staff Writer
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