Major Alaskan oil field shutting down

In a sudden blow to the nation's oil supply, half the production on Alaska's North Slope was being shut down Sunday after BP Exploration Alaska discovered severe corrosion in a Prudhoe Bay oil transit line. BP officials said they didn't know how long the Prudhoe Bay field would be off line.

Steve Marshall, president of BP Exploration Alaska said that tests indicated that there were 16 anomalies in 12 areas in an oil transit line on the eastern side of Prudhoe Bay. Tests found losses in wall thickness of between 70 and 81 percent. Repair or replacement is required if there is more than an 80 percent loss. "The results were absolutely unexpected," Marshall said.

Once the field is shut down, in a process expected to take days, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8% of U.S. oil production as of May 2006 or about 2.6% of U.S. supply including imports. The shutdown comes at an already worrisome time for the oil industry, with supply concerns stemming both from the hurricane season and instability in the Middle East.

(2006-08-07 11:33:52 SGT) [Energy] Permalink

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