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Alaska joins axis of evil (unreliable oil suppliers)
Countdown to $100 oil (29)
Jerome a Paris, European Tribune
After armed insurgencies (Iraq, Nigeria), evil-regimes-bent-on-destroying-the-US (Venezuela, Iran) and hurricane-prone weather (Gulf of Mexico), another cause can be added to the various items in the long list that have the power to influence(upwards) oil prices: the sheer incompetence of US oil majors.
Aug. 7 (Bloomberg) — BP Plc said it’s shutting Alaska’s Prudhoe Bay oil field, the largest in the U.S., because of pipeline corrosion, cutting supplies to West Coast refineries and raising new criticisms of the company’s safety record.
You’d think that oil majors, currently shut out of many countries (Saudi Arabia, Kuwait, Mexico), kicked (Ecuador) or taxed (Venezuela, Russia) out of others, or having major trouble developing new fields without major cost overruns all over the place (Sakhalin, Kashagan, oil sands) would at least make sure that existing fields in stable countries work properly…
(7 Aug 2006)
Also at Daily Kos.
BP: restart of Prudhoe Bay oil field may take months
Anna Raff, MarketWatch
The restart of crude oil production at the BP PLC-operated (BP) Prudhoe Bay field in Alaska could take months as the Anglo-American energy major works to diagnose and repair problems in a pipeline system.
BP said late Sunday it had begun the shutdown of Prudhoe Bay, the largest producing oil field in the U.S. accounting for 8% of domestic output, after discovering severe corrosion along a transit line.
The unprecedented move in Alaska’s North Slope hydrocarbons province sparked a rally in energy prices and elicited a response from the Organization of Petroleum Exporting Countries, which said it would be able to cover the shortfall of 400,000 barrels a day.
The U.S. West Coast is highly dependent on crude supply from Prudhoe Bay. The legendary oil field has been producing since 1977 and hit peak output of about 1 million barrels a day in the late 1980s. Since then, the field has been in gradual decline.
(7 Aug 2006)
Variety of crudes seen filling gap left by Prudhoe Bay outage
With crude production from Alaska’s Prudhoe Bay field down indefinitely, and tight supplies of short-haul Latin American crudes, typical Alaska North Slope crude buyers may have to seek crudes from as far away as West Africa or Asia to fill the void on the US West Coast, market sources said August 7.
“California may have problems,” Standard & Poor’s Chief Economist David Wyss said. “The entire West Coast could be in trouble.”
There is no pipeline connecting the Gulf Coast’s petroleum production or the US Strategic Petroleum Reserve crude stockpiles to West Coast refineries, Wyss explained.
Also, he noted, only smaller tankers can move through the Panama Canal to take crude to the West Coast.
From Latin American, the crude most similar to ANS is Brazilian Roncador, a new grade first marketed in March, market sources said. Brazil’s Petrobras produces less than 2 million b/d of Roncador, which is 28 API and 0.58% sulfur. ANS has is 29-29.5 API gravity and 1.1% sulfur.
However, “there is no prompt Roncador available,” said a Petrobras source. “It won’t help at all.” He added that “Petrobras has moved Roncador to the US West Coast in the past.”
There will likely be Roncador available loading in September for an October delivery, said the source. Roncador is typically exported to Chile, Europe and Asia.
(7 Aug 2006)
Oil Drum: More thoughts on Prudhoe Bay
Heading Out, The Oil Drum
As the situation up in Prudhoe Bay has become clearer, over the course of the day, and thanks to information that has appeared in comments, it might be worth an attempt at summarizing some of the issues.
To begin with, thanks to Westexas, the cause of the corrosion appears to be known.
The information comes from a Petroleum News article written after the first spill that occurred back in March. To begin with, oil production from a number of adjacent wells is collected at one of six Gathering Centers that serve the field. (As Triffin found the field has a total of around 1,111 active producing wells, 39 gas reinjection wells, 82 water injection wells and 136 water and miscible gas injection wells). The leak in March, for example occurred beside one of these Centers that serviced 230 wells which had been drilled from a 12 drill pads. The gathering center separates the oil, natural gas and water that comes out of the wells, and then passes the oil into a transit pipeline that carries it toward the main Trans Alaska Pipeline (TAP) terminal. The major corrosion that was found in March was in the line from Gathering Center 2, before it joined with the flow from Gathering Center 1 to flow on to the terminal.
Flow from the individual wells in the field has been decreasing, Triffin (ibid) also noted that:
The average well production rate was about 546 barrels of oil per day in 2001, 375 barrels per day in 2002, 350 barrels per day in 2003, 317 barrels per day in 2004 and 293 barrels per day in 2005.
Since the diameter of the pipeline remains the same, as the flow drops, then so does the speed of the oil through the line.
(7 Aug 2006)
Earlier Oil Drum threads: