BP Exploration Alaska Inc. has resumed work on the $80 million Hurl State development project in the western edge of Alaska's giant Prudhoe Bay oil field.
The company halted the project last year after Alaska changed the formula for calculating oil and gas severance taxes (OGJ, June 12, Newsletter).
BP's tax bite from the changes was an added $85 million that did not figure into its 1989 budget. Consequently, the project was put on hold until it could be plugged into the 1990 budget.
BP expects to resume fabrication of minimodules at Fairbanks, Alas., in mid-June. Drilling is to begin in August and transportation of the minimodules early in the fourth quarter.
The company targets production starting up at about 5,000 b/d by yearend and building to 14,000-16,000 b/d by late 1991.
Separate development of the fringe of the Prudhoe Sadlerochit reservoir is necessary because of its thin pay zone and low porosity.
BP breaks out the costs as $60 million for primary development and $20 million for a waterflood. Primary recovery is estimated at 28 million bbl of oil, waterflood 9 million bbl.
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