Positive news on Prudhoe Bay pipeline leak

15 August 2006

British energy giant BP has further allayed pressure on oil prices after announcing that it will maintain production on the western side of its Prudhoe Bay oil field.

It made the decision after consultation with federal and state agencies in Alaska.

The Prudhoe Bay oil field is responsible for eight per cent of daily US output, but was closed last week following a pipeline leak.

BP said that severe corrosion to the pipeline had led to the leak.

Current production at the 400,000 barrel per day field stands at 150,000 barrels, but the company expects to increase this to 200,000 barrels per day once full production is resumed at one of its gathering centres.

President and chairman of BP America, Bob Malone, called the results of ultrasonic inspections "encouraging".

The western transit line would now be subject to frequent ultrasonic inspection, with tests set to be evaluated on a daily basis.

Good news from the oil field has had a positive impact on the price of oil, which had earlier reached a record high, partially as a result of the Alaskan leak.