Prudhoe Bay rig count to drop by more than half

BP has announced it will cut the number of drilling rigs operating at Prudhoe Bay, from five to two, as a result of low oil prices.

The decision came after BP’s primary partners in the oilfield, ExxonMobil and ConocoPhillips, asked the company to cut costs, said spokeswoman Dawn Patience. (Chevron also holds a minor stake in the field.)

It’s the latest in a steady drip of tough news from the oil patch, as prices continue to hover around forty dollars per barrel.

Patience said BP notified employees of the decision last week though the cuts aren’t expected to impact jobs at BP itself.

But Renee Limoge-Reeve, of the Alaska Support Industry Alliance, said she expects layoffs at the three contractors operating the rigs — Doyon Drilling Inc., Nordic-Calista Services and Parker Drilling Co. — with perhaps 200 to 300 jobs affected.

After a year and a half of low oil prices, she said, the impacts on industry are starting to sink in.

“Oil prices are cyclical, so people waited to see if it would come back, and how quickly it would come back,” Limoge-Reeve said. “We’ve been at low oil prices for awhile, and it’s the nature of the beast, there are going to be consequences.”

BP spokeswoman Patience said losing the three rigs will have some impact on the amount of oil Prudhoe sends down the Trans-Alaska Pipeline though the company hopes to limit the impact.

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