BP announced Tuesday it is suspending work on the most critical piece of its $1.5 billion Liberty oil field development in the Beaufort Sea -- a massive drilling rig.
BP said it needs to begin a broad engineering review of the rig to address a number of problems that have arisen during the rig's construction on a man-made island.
"We've gotten to the point that we need to step back, take a time out and make sure that all of these systems, including some critical safety systems, are just like they need to be," said BP spokesman Steve Rinehart.
Previously, BP had expected to begin producing oil from Liberty's first production well next year, but that is "probably not going to happen," Rinehart said.
Liberty is considered one of the most advanced offshore drilling projects in the world because it requires drilling the world's longest wells -- eight miles long and two miles deep. It's the biggest oil development project under way in Alaska.
But the BP project has been under intense scrutiny since the company's massive oil leak from the Deepwater Horizon rig in the Gulf of Mexico during the spring and summer. Also, the company has been under fire for North Slope spills in the past four years. This fall, a federal lawyer accused the company of violating its federal probation for oil spills on the North Slope tundra.
Rinehart said BP will apply any lessons it has learned from the Deepwater rig accident to the Liberty project.
"It's a really important project ... it has to be done right," Rinehart said.
The company has called Liberty one of its biggest investments on the North Slope in nearly a decade.
The rig components were shipped to the Slope on barges in 2009. Since then, BP's contractors have been assembling the rig on the 31-acre man-made island, part of the Endicott oil field built in the 1980s. BP plans to drill the Liberty wells from the Endicott island.
Rinehart said the work suspension will affect about 100 contractors but he didn't know if they'd be laid off or transferred to other projects. Among the systems that will be looked at during the engineering review are the rig's power, mud control, safety and ventilation systems, he said.
The company doesn't have a new schedule for when it will begin oil production at Liberty. Rinehart couldn't say Tuesday if the rig will have to be redesigned.
At peak production, the Liberty oil field is expected to produce about 40,000 barrels of oil per day. The North Slope fields currently produce about 650,000 barrels a day.
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By ELIZABETH BLUEMINK