BP Shutdown Puts Pressure on Gas Prices

Oil transit and other pipelines run past the area affected by a March 2, 2006, 200,000 gallon oil leak, Friday, Aug. 4, 2006, on Alaska's North Slope near Prudhoe Bay. BP Exploration Alaska Inc. began shutting down the Prudhoe Bay oil field Sunday after the discovery of unexpectedly severe corrosion and a small spill from a Prudhoe Bay oil transit line. (AP Photo/Al Grillo) (Al Grillo - AP)

"If it prolongs and goes six weeks, eight weeks, three months or four months, then it's going to require us to be more creative in where we get our crude from," he said.

BP operates the Prudhoe Bay oil field for itself and for other oil companies, including ConocoPhillips and Exxon Mobil. Prudhoe Bay and other oil fields on Alaska's North Slope feed oil into the 800-mile trans-Alaska pipeline. The North Slope produces approximately 800,000 barrels a day; Prudhoe Bay accounts for half of that.

BP discovered corrosion in the transit lines only after the U.S. Transportation Department ordered their inspection following a spill of up to 270,000 gallons in March. It was the biggest spill in North Slope history, and has become part of a criminal investigation into the company's Alaskan operations.

The loss may hit Alaska hardest. Eighty-nine percent of the state's income is from oil revenue, and central to that cash flow is Prudhoe Bay. The expected loss of 400,000 barrels per day at today's oil prices means $6.4 million lost daily in royalties and taxes, Revenue Commissioner Bill Corbus said.

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AP Writers Matt Volz in Juneau, Alaska, and Jane Wardell in London contributed to this report.

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On the Net:

BP: http://usresponse.bp.com/go/site/1249