WASHINGTON -- The U.S. government and BP PLC have discussed scenarios under which about half of Alaska's huge Prudhoe Bay field could continue to pump oil for hungry U.S. refiners, U.S. Energy Secretary Sam Bodman said on Tuesday, according to a Reuters report.
The news, which Bodman delivered to reporters after speaking with BP America Inc. CEO Bob Malone, could soothe worries that a shutdown of the 400,000-barrels-per-day Alaska field will exacerbate shortages in Nigeria, Iraq and elsewhere.
As reported in CSP Daily News, BP [image-nocss] began shutting down the field on Sunday after discovering a corroded pipeline and said it could be weeks or months before production resumed at Prudhoe Bay, the biggest U.S. oilfield.
Concerns about the field shutdown sent U.S. crude oil futures as high as $77.45 a barrel on Tuesday, nearing the all-time high of $78.40 a barrel set on July 14.
Initially BP said it would shut down the entire field, which pumps about 8% of U.S. domestic supplies. But Bodman said BP is now mulling a "parallel plan" that would allow it to fix the pipeline on the eastern half of the Prudhoe Bay field while leaving the western half online. The western part of the field can pump about 185,000 bpd, BP said.
"A complete shutdown of the Prudhoe Bay system may not be necessary," Bodman said. "With respect to the Western areas [of Prudhoe Bay, BP is] looking at a parallel program that would enable the repairs to take place...but that it would be done in a fashion that would allow them to maintain production.
BP spokesperson Daren Beaudo confirmed that it was studying ways to keep some production flowing from the western side of Prudhoe Bay.
"We are having dialogue with those important stakeholders [federal and state regulators] to determine if there is an assurable safe method for maintaining some level of production.
BP has declined to say how long it will take to fix the pipeline, but government estimates put Prudhoe Bay field back in service by January 2007.
In the meantime, Bodman pointed to healthy U.S. crude oil and refined product stocks, and said tankers could be diverted from countries like Saudi Arabia, Ecuador, Colombia and Mexico to the U.S. West Coast to fill any shortfalls. "There appears to be an adequate supply," Bodman said.
Bodman said on Monday he was ready to approve loans from the U.S. emergency crude oil stockpile, but apparently has found no takers among U.S. refiners. If necessary, Bodman said crude oil from the U.S. emergency stockpile on the Gulf Coast could be released to supply area refiners, and that imports bound for the Gulf Coast could be diverted to the West Coast.
That would avoid rerouting tankers from the Gulf Coast to the West Coast, which would involve a time-consuming journey through the Panama Canal, he said.
Click here to view BP'sweb page launched toprovide updates on the Prudhoe Bay situation.
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