ANCHORAGE — BP has announced it will reduce the active rig count at Prudhoe Bay on Alaska’s North Slope, a move expected to cut oil production and more than 200 jobs.
Low oil prices have forced the company to reduce the number of rigs from five to two, The Alaska Dispatch News reported on Monday. The decision comes as BP Exploration Alaska recently announced a loss of $194 million in its annual report to the Securities and Exchange Commission.
The move follows discussions with oil field partners ExxonMobil and ConocoPhillips, BP Alaska spokeswoman Dawn Patience said.
“We were asked to substantially reduce our expenses and our capital, and this is part of that,” Patience said. “In this low oil price environment, you have to review the appropriate level of activity.”
Oil production at Prudhoe Bay would take a hit, and work is being done to “mitigate” the effect, Patience said.
In the next few months, two rotary drilling rigs and a coil drilling rig will be shut down. The rigs are operated by contractors Nordic-Calista Drilling, Parker Drilling and Doyon Drilling.
Rebecca Logan, general manager at the Alaska Support Industry Alliance, said the decision will affect between 200 and 300 jobs directly. It will also result in a multimillion-dollar loss for the economy once the rigs are no longer active, she said.
At Prudhoe Bay, BP will continue operating one coil and one rotary drilling rig. In other areas of the North Slope, Caelus is operating two drilling rigs, ConocoPhillips is operating four and Hilcorp is operating one, Logan said.
BP is one of several companies in recent months that have announced plans to scale back operations, cut jobs or delay projects because of low oil prices. Shell and Apache Corp. are ending exploratory projects in Alaska, and ConocoPhillips has reduced its workforce in the state. Oil companies ENI, Repsol and Brooks Range Petroleum have announced delays.
