BP: Likely To Postpone Alaska Liberty Field Drilling To 2011

By Cassandra Sweet Of DOW JONES NEWSWIRES SAN FRANCISCO (Dow Jones)--BP PLC (BP, BP.LN) will likely postpone exploratory drilling at the Liberty field off Alaska's coast until next year as the company responds to inquiries from federal and state regulators about the safety of the enterprise, a company spokesman said Wednesday. BP's plans to drill new wells at the Liberty field in the Beaufort Sea using new techniques have come under fire from environmental groups and some lawmakers in the wake of the Deepwater Horizon disaster in the Gulf of Mexico. The company originally planned to start drilling the wells this fall, but is now considering postponing the start date to next year, said Steve Rinehart, a spokesman for BP Exploration (Alaska) Inc. The U.S. Interior Department, its new offshore drilling agency, the Bureau of Ocean Energy Management, Regulation and Enforcement and the Alaska Oil and Gas Conservation Commission have asked BP to provide more information about the Liberty project for a new round of reviews of the project. "We want those questions to be addressed and take the time to do that," Rinehart said. "We don't want that bumping up against a drilling schedule that was set before these reviews were part of the conversation." U.S. Sen. Frank Lautenberg (D., N.J.) asked federal officials last month to halt the Liberty project until the completion of an investigation of the Gulf spill, a new review of the Alaska project and revised drilling rules and regulations. Earlier this month, six environmental groups asked U.S. Interior Secretary Ken Salazar to deny BP's application to drill at the Liberty field over concerns about safety and the company's ability to respond to an accident. The Obama administration imposed a moratorium on all deepwater oil exploration and offshore drilling in Arctic waters after the disaster in the Gulf. BP's Liberty project was exempt because it is technically a land-based operation. BP plans to drill from a gravel island the company built to tap an estimated 100 million-barrel reservoir off the coast. The rig will drill horizontally for six to eight miles in a technique that some critics have said could be dangerous in light of the explosion and sinking of the Deepwater Horizon rig in the Gulf, which killed 11 people. Rinehart said BP's timeline for drilling at the Liberty field is unclear, and that the company is continuing its own evaluation of the project "to ensure design and systems are appropriate and meet our own high standards." -By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com (END) Dow Jones Newswires July 07, 2010 16:51 ET (20:51 GMT)