BP suspends construction of rig off Alaska coast

Posted: Thursday, December 02, 2010

JUNEAU - BP PLC is suspending construction of a huge oil rig off Alaska's coast to review its engineering and design plans and ensure the Liberty project can be done safely.

BP Alaska spokesman Steve Rinehart said "a few issues" were encountered over the last year in working to assemble the rig. He wouldn't define those. But he said no one issue caused BP to pull back and none of them has caused the company to second-guess whether the unusual project is doable.

He said the decision - announced to contractors this week - was arrived at over time "with a lot of deliberation," and is aimed at ensuring the rig meets company standards.

"The approach has to be right," Rinehart said Tuesday. "Liberty is a very important project to BP. It's very important to the state and to the U.S. And it has to be done safely and carefully. And that foundation has to be solid, and everybody has to be confident in that and we can go from there."

"We always understood this would be difficult," he said, adding later that BP remains firmly committed to the project.

No timeline was given for construction to resume. The delay is expected to affect about 100 jobs, generally belonging to contract employees.

The Liberty project is unique, and controversial. It calls for using a manmade gravel island in the Beaufort Sea as a drilling base, with a rig drilling horizontally for six to eight miles to tap what BP estimates is a 100-million-barrel reserve of recoverable oil. Some critics have questioned the approach following the massive oil spill stemming from a BP-leased rig in the Gulf of Mexico earlier this year.

Following the spill, federal regulators pledged to look for such things as oil spill response and blowout prevention plans when reviewing drilling permit applications; the state also planned to review whether there were gaps in any of its regulations.

Rinehart said the review of the work on Liberty would include lessons learned from the gulf spill though he couldn't immediately identify which might be applicable to the very different project in Alaska.

He said the review would cover "all the safety-critical systems," including power supply and ventilation systems.

BP has not yet applied for a drilling permit for the project. And this isn't the first delay in plans for moving forward. At one point, BP hoped to have begun drilling this year and to have started producing oil in 2011.

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