BP PLC (BP, BP.LN ) will spend at least $1 billion to increase its Alaska drilling activity over the next five years, the company said Monday.
BP PLC (BP, BP.LN ) will spend at least $1 billion to increase its
Alaska
drilling activity over the next five years, the company said Monday.
The British oil company's new investment could help
Alaska
stave
off declining oil production and increased competition from the lower 48
states, where new drilling techniques have spurred an oil boom in recent years.
BP credited its decision to
Alaska
's cut
in oil taxes, including a 20% reduction in taxes collected for new oil
produced.
BP said it plans to spend $1 billion to upgrade existing facilities, increase
drilling and well-work activity and add two drilling rigs in the Alaskan North
Slope fields over the next five years.
The rigs, expected to be in place starting in 2015, will increase BP's
Alaska
rig fleet
to nine.
BP and its partners will also evaluate whether to spend up to $3 billion for
new development projects over the next decade in the wider
Prudhoe
Bay
region, BP said. BP is considering such projects as building new
drilling pads and drilling more than 110 new wells, BP said.
Alaska
oil
production has been in steady decline since the late 1980s. The state slid into
fifth place for
U.S.
oil
production in March, falling behind
California
for
the first time in at least three decades.
"Our announcement today should make abundantly clear that BP is committed
to being a part of (
Alaska
's
oil) future and to continuing to extend the life of
North
America
's largest oil field," said BP Alaska Region President Janet Weiss.
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