After a one-and-a-half year survey, BP (NYSE: BP) has chosen to shelve an offshore oil project in Alaska, citing excessive costs and technical issues.
The Liberty project was to have cost around $1.5 billion, and promised 100 million barrels. It was going to be the first field located within Federal waters in the offshore Alaska region, says Reuters.
The review concluded that total costs would have been far more than the estimate, and it would have required further delays before it could even begin generating its projected 40,000 barrels per day.
This isn’t the first time the Liberty project encountered issues. In 1998, a plan evolved to begin development on the field, but that got canned in 2002 over cost problems.
In 2007, a revised plan was brought up whereby BP would rely on ultra-extended-reach wells to operate the field from shore. While the plan met with praise and construction commenced in 2009, BP halted matters in 2010 because of problems in the rig’s design.
The Deepwater Horizon oil spill caused matters to come to a head.
Reuters quotes Dawn Patience, of BP Exploration (Alaska) Inc.:
“We are not going to pursue Liberty in its present form,” said Patience. “The project, as it’s designed right now, doesn’t meet BP’s standards.”
Although the project has been shelved, BP may resume development at a later date.