Alaska plan to assess oil risks

Financial Times
April 15, 2008

By Sheila McNulty in Houston
Published: April 15 2008 03:43 |
Last updated: April 15 2008 03:43

Alaska is seeking bids to conduct a comprehensive risk assessment of the state’s oil and gas infrastructure to prevent a repeat of the corrosion and spills suffered in recent years at the Prudhoe Bay oilfield, the largest in the US.

The engineering analysis, for which bids are due by April 28, is being conducted on the instructions of Governor Sarah Palin. She ordered the audit  to take two years and cost $5m  after the biggest spill at the BP-operated Prudhoe Bay in 2006 revealed corrosion in the pipelines and forced the closure of half the oilfield.

The state has asked the legislature to provide $4.7m to fund a lawsuit against BP to compensate it for “several hundred million dollars” of oil tax and royalty revenue it lost during 2006 and 2007 because of what it called BP’s “failings”.

“Events of the last few years show the need to take a hard look at the adequacy of existing infrastructure and systems,” said Larry Hartig, commissioner of the Alaska Department of Environmental Conservation.

BP, which has been under heightened scrutiny from US investigators and Congress in recent years following the spills in Alaska, a trading scandal and a refinery explosion in Texas, indicated it would work with the authorities on the audit.

“We have a long history of co-operating with state agencies, and we have systems and processes in place for safely managing our operations,” said Ronnie Chappell, BP spokesman.

Betty Schorr, Alaska’s industry preparedness program manager, said this was the first time the state had undertaken such a comprehensive assessment. It will select a contractor in June.

~ by fredfelleman on April 15, 2008.

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