Just an update if you care, not necessarily anything to debate. More relevant from an investor standpoint, but an update of sorts, no less.

quote:

BP Ordering Pipe From U.S. Steel, Nippon Steel for Prudhoe Bay 2006-08-09 14:49 (New York) By Sonja Franklin and Ian McKinnon Aug. 9 (Bloomberg) -- BP Plc has ordered some of the steel pipe it will need to restore production at Alaska's Prudhoe Bay, the biggest U.S. oilfield, and the first delivery is in October. London-based BP, the world's third-largest oil company by market value, is asking suppliers U.S. Steel Corp. and Nippon Steel Corp. for faster delivery, BP Alaska President Steve Marshall said in conference call yesterday. The company said this week that it would shut the field to replace 16 miles of feeder pipeline after discovering corrosion and a leak. ``The steel that goes into the production of some of the pipe is in very tight supply,'' Charles Bradford, an analyst at Soleil Securities Corp. in New York, said in an interview. Bradford tracks steelmakers including U.S. Steel. U.S. Steel is supplying 30,000 feet of 24-inch pipe, starting in October, and Nippon will begin delivering 21,000 feet of smaller pipe in December, Marshall said, according to a transcript of the conference call posted on BP's Web site today. He said another 30,000 feet of 24-inch pipe and 52,000 feet of 18-inch pipe would also be needed. Oil prices jumped 3 percent on Aug. 7 after the company announced the shutdown, which will take 400,000 barrels a day out of the market, or 8 percent of U.S. production. The U.S. Energy Department said yesterday that the field's output probably would not be fully restored until early next year. So far, half of the production has been shut. Crude oil for September delivery was little changed today at $76.35 a barrel on the New York Mercantile Exchange. Oil touched an all-time high of $78.40 on July 14. Pipe Shortage Steel demand and prices are climbing, helped by global economic growth and increased oil and gas drilling. The price of the large-diameter pipe used in pipelines has about doubled since 2003, according to steel analyst Michelle Applebaum. Large-diameter pipe is sold out through the third quarter of 2007 at Ipsco Inc., a maker of steel pipe in Lisle, Illinois, that has supplied BP in the past. Demand is strong from oil and gas companies for pipe that is bigger than 24 inches in diameter, according to Ipsco spokesman Tom Filstrup. ``We're all full because there are so many large-diameter projects out there,'' Filstrup said in a phone interview this week. Ipsco rivals including Oregon Steel Mills Inc. have similar backlogs, Filstrup said. Marshall said on an Aug. 7 conference call that BP won't be deterred by high pipe costs: ``Money is not the object.'' `No Extra Pipe' John Armstrong, a spokesman for Pittsburgh-based U.S. Steel, declined to comment on BP's order. Spokespeople at Nippon Steel offices in Chicago and New York couldn't be reached. BP is the operator of Prudhoe Bay and owns about 26 percent. Exxon Mobil Corp. and ConocoPhillips each own about 36 percent. The corrosion, which has eaten away more than 70 percent of the steel wall of the pipe in some places, was discovered after inspections prompted by a spill of more than 250,000 gallons of oil that was discovered in March. The amount of steel BP needs is ``fairly small,'' said Applebaum, who runs her own research firm in Chicago, Michelle Applebaum Research. ``That's the good news. The bad news is the major pipe producers are committed through 2007,'' she said in a phone interview. ``There is no extra pipe out there.'' The feeder pipes that are being replaced carry oil to the northern end of the 800-mile Trans Alaska Pipeline System, which transports crude from Prudhoe Bay and other fields on Alaska's tundra to a tanker terminal in Valdez.

so as it turns out, this guy is actually laying some serious pipe?

Livin' large. What an ugly fuck. It takes serious effort to grow a double chin of that magnitude. That's got Admiral Ackbar beat.

quote:

Originally posted by Q5echo from Washington Times. just some perspective for this dicussion

I don't think you highlighted what I think you meant to highlight, because what you highlighted could only be characterized as a critcism of big oil. What I think you meant to outline was that oil companies spent more on oil development and exploration than they made in profits. However, that's hardly much better than what you outlined (unless you think oil companies should have profits in the trillions as opposed to a few pitiful billions ). I mean really, it's simple business accumen ... you reinvest a proportion of profits into R&D in order to perpetuate said profits for an indefinite time period. The fact that one is spending more on R&D than they are profiting doesn't mean that they aren't profiting. The simple fact holds true that despite the fact that they're spending more on R&D (why how gracious of them, I'm sure it has nothing to do with their own self interests!) they're still making record profits.

I guess I don't mind their profit margin except for the fact that it's a poorly regulated inelastic product that is extensively subsidized by the federal government, have been shown to take advantage of "small business loans", and their CEOs get 360 million dollar severance packages. Right so I read several business periodicals why doesn't somebody point out some revolutionary trends that these CEOs have implemented to warrant such pay packages?

And blame can clearly be placed on regulators for this crap. Yes the bare minimum of regulation will prevent environmental disaster however, I thought that a top priority of this administration was to reduce price shocks to oil and thus warrant more forward looking risk analysis sesitive to price fluctuations??? At this point it's really common sense here.

___________________
Retro ...

quote:

Originally posted by occrider (unless you think oil companies should have profits in the trillions as opposed to a few pitiful billions ).

no. unless they still operated at a 9% profit margin at that rate. i don't think it would matter.

your right though, i meant to highlite the expendetures in addition to profit/revenue. my guess is their severance is their right if approved by board or shareholders. laws of percentage are going to apply no matter how small or large profits are. i don't know enough about the details of impropriety that you suggest. maybe i should.

quote:

I thought that a top priority of this administration was to reduce price shocks to oil and thus warrant more forward looking risk analysis sesitive to price fluctuations???

ok. the industry is not regulated enough, in your opinion, to the extent of preventive maintenance and the bacterial corrosion of the feeder pipes is your evidence of that. fine. there are industry experts on their side who would, i'm sure, disagree with you but i guess you can never be too cautious. the administration on the other hand cannot be expected to forsee what the already regulated didn't for notice for the last decade.

quote:

Originally posted by Shakka Livin' large. What an ugly fuck. It takes serious effort to grow a double chin of that magnitude. That's got Admiral Ackbar beat.

thats just a bad picture of him. here


he's really not a bad looker (kinda rugged, Sam Elliot virileness to him) i bet he has no problem paying for sex

quote:

Originally posted by Q5echo no. unless they still operated at a 9% profit margin at that rate. i don't think it would matter. your right though, i meant to highlite the expendetures in addition to profit/revenue. my guess is their severance is their right if approved by board or shareholders. laws of percentage are going to apply no matter how small or large profits are. i don't know enough about the details of impropriety that you suggest. maybe i should.

I'm fine with companies making profits. That's the nature of the beast. However, there is simply no excuse for cost cutting in this situation. My point is that oil is a market externality. There is nothing close to perfect competition. It breeds of market inefficincies as a result of poor regulation that perpetuates inequitable rates of return. We seem to be perfectly comfortable sanctioning oligopolies.

quote:

ok. the industry is not regulated enough, in your opinion, to the extent of preventive maintenance and the bacterial corrosion of the feeder pipes is your evidence of that. fine. there are industry experts on their side who would, i'm sure, disagree with you but i guess you can never be too cautious. the administration on the other hand cannot be expected to forsee what the already regulated didn't for notice for the last decade.

As they say, you get the government you pay for ... however, with teh amount I'm paying I expect more.I never expected this government to respond to common sense so I understand why regulators would adopt an approach pertinent to the 90's as opposed to one relevant to today.

___________________
Retro ...

Another update:

quote:

Prudhoe Bay Update August 9, 2006 2006-08-09 17:01 (New York) ANCHORAGE, Alaska, Aug. 9 /PRNewswire/ -- Exploration Alaska Inc. (BPXA) continues the phased and orderly shutdown of production of the Prudhoe Bay oilfield on the North Slope of Alaska. (Logo: http://www.newscom.com/cgi-bin/prnh/20000724/NYM120LOGO ) BP's top priorities remain assuring the safety and integrity of the oil field, minimizing environmental impacts and cooperating with federal and states agencies. To date, BP has safely shut in approximately 200,000 barrels of daily crude oil production. Once the Eastern portion of the field is shut in, production from the Western portion of the field will begin to be shut in. The shut in Prudhoe Bay pipelines and facilities will not return to normal operations until BPXA is satisfied they are safe and meet all BP state and federal regulatory operations criteria. BP's continues to work around-the-clock to minimize supply disruptions and to bring additional supplies of crude oil and motor fuel into the US. The company has also agreed to take steps that will ensure the continued flow of oil to the Flint Resources Refinery in North Pole, Alaska, which depends on North Slope oil for its operations. There is adequate crude supply for BP's West Coast refineries in the short term and no disruption of gasoline supplies for California or the West Coast is expected during this time. BP is working to obtain mid and longer term crude and product supply for its US West Coast refineries and marketing operations. BP is working with state and federal regulators to assess the fitness of Prudhoe Bay oil transit lines and to evaluate options for continuing to safely produce from some portions of the field. The company will work to restore production as soon as possible by accelerating transit line inspections, and repairing or bypassing damaged lines. Longer term, the company has announced that it will replace all 16 miles of Prudhoe Bay oil transit line as part of the company's plan for improving pipeline integrity Total production impacted by the decision to shut-in the operating area could reach approximately 400,000 barrels per day. This volume comprises about 50 percent of all North Slope oil production. ACTIONS TAKEN AND ONGOING ACTIVITIES * BP continues to mobilizing additional inspection resources from operations across Alaska and North America to expedite evaluating the condition of the crude oil transit lines to ensure safety and environmental protection. * Over the next week BP will be supplementing our workforce with the additional resources: * 156 pipe insulation stripping personnel * Five additional automated ultrasonic testing crews (for a total of eight), and * 21 manual ultrasonic testing personnel * Other personnel at Prudhoe Bay are being redeployed to support the ongoing inspection and maintenance activity. * BP logistics, refining and marketing team has been established to manage BP's crude oil and product supply over the coming weeks and months. * BP has purchased over 3 million barrels of crude oil to meet BP's West Coast operations over the short and medium term. * BPXA has agreed to allow the State of Alaska to increase the amount of oil taken as royalty-in-kind at all BP-operated fields in Alaska other than Prudhoe Bay in order to ensure the continued flow of oil to the Flint Resources Refinery in North Pole, Alaska. INSPECTION AND SPILL RESPONSE * During supplemental inspection of the line, BP workers identified, and emergency responders are cleaning up an oil spill currently estimated to be about five (5) barrels. * The Flow Station 2 Oil Transit Line was maintenance-pigged in July. Following the cleaning of the line, BPXA ran a smart-pig - an industrial diagnostic tool used to evaluate the operability condition of a pipe - on July 22. On August 4, preliminary smart-pig data interpretation indicated 16 anomalies, where the wall thickness of the pipe may not have met BP and industry standards and criteria for safe operation. * To validate the initial smart pig data, BP was conducting additional inspections of 16 anomalies at 12 locations on the line where corrosion- related wall thinning may have exceeded BP operational parameters. Inspectors at one of the locations observed oil staining on the underside of the pipeline's protective insulation at about 5:30 a.m. After onsite inspection by Prudhoe Bay operations management, the Prudhoe Bay Incident Management Team was mobilized, and FS 2 began shut down as a precautionary measure at 6:00 a.m. * As an additional precautionary measure, spill containment equipment was mobilized to an additional inspection location with high corrosion wall loss. During this equipment deployment, leaking oil was observed at about 9:00 a.m. near this location. Responders re-positioned one of the containment tanks to capture the leaking oil and containment and recovery was initiated immediately using vacuum trucks and other oil spill cleanup equipment to minimize environmental impact. * The size of the leak is estimated to be about five (5) barrels. Currently about 170 barrels of an oil and water mixture has also been captured in and removed from containment tanks. Recovery from this source is ongoing. No other leaking oil has been observed and visual spill detection measures have been increased. * The crude oil transit line is a 30-inch line that carries about 30,000 barrels of processed crude oil per day from Flow Station 2 to skid 50 and ultimately into the trans-Alaska pipeline. * BPXA is mobilizing additional inspection resources from operations across Alaska and North America to continue to evaluate the conditions of the crude oil transit lines to ensure safety and environmental protection before returning the Prudhoe Bay to normal operations. Options to resume production include repair or replacement of pipelines. * BP continuously re-evaluates its inspection and maintenance programs and will modify procedures and policies whenever appropriate. * Since March approximately 40 percent of all crude oil transit lines in Prudhoe Bay have been inspected via smart pig runs. Of the 22 miles of oil transit lines in Prudhoe Bay, nine (9) miles have been maintenance- and smart-pigged in the last two months; 10 miles remain to be maintenance- and smart-pigged; and three (3) miles from GC-2 to GC-1 (OTL 21) will be cleaned and decommissioned. This is the section that leaked on March 2, 2006. * All proper agency notifications have been made including the North Slope Borough, EPA, ADEC, and National Spill Response Center. * The Lisburne production facility continues to operate at about 17,000 barrels per day. The Lisburne line was maintenance- and smart-pigged in July and no areas needing repair were found. SUPPLY SITUATION The global crude oil market responds quickly to changes in the supply and demand balance. This was evidenced by the large volumes of imported crude oil and gasoline that arrived in the US after hurricanes Katrina and Rita disrupted supply from and into the Gulf of Mexico. * Crude oil is a globally traded commodity and can be sourced from any number of oil-producing regions. BP's US refineries are some of the most complex in the world. This complexity allows our US refineries to use different varieties of crude oil based on availability. * According to the US Department of Energy, US crude oil stocks are higher than average for this time of year. * According to the US Department of Energy, crude oil stocks along the US West Coast are higher than this time last year. * More than 50 percent of the cost of a gallon of gasoline is attributed to the cost of crude oil. The price of crude oil is determined by the impact of a variety of supply and demand factors on the world market. Things like the weather, war and consumer demand for gasoline all influence the price of crude and therefore gasoline. * BP is urging customers to not be influenced by panic behavior. Panic buying and hording of fuel adds unnecessary stress to the supply chain. * We also urge customers to use fuel wisely. * Fuel prices are determined by the marketplace's reaction to supply and demand factors. A number of states also have emergency orders in effect regarding fuel pricing. * Consumers should not tolerate price gouging. We urge consumers to report any evidence of price gouging at BP or ARCO branded retail sites to BP consumer relations at 1-800-333-3991 or the office of their state's attorney general at http://www.naag.org/.