Alaska Pipeline Closes Drop in Production by BP, Others Threatens to Push Oil Toward $100 a Barrel

By GUY CHAZAN

BP PLC and other oil producers were forced to shut down nearly all their output on Alaska's North Slope, after a leak led to the closure of the Trans Alaska Pipeline.

Analysts said the shutdown of the 800-mile pipeline network could trigger a jump in oil prices unless the flow of oil resumes quickly, as the region represents a significant slice of domestic U.S. oil output. Some analysts said the disruption could help drive crude-oil prices toward $100 a barrel from below $90 now.

Alyeska Pipeline Service Co., which operates the pipeline network, said the spill has had no apparent impact on the environment or wildlife. Alyeska said no oil was leaking as of Sunday evening. About 10 barrels of oil had been spilled and most of it had been cleaned up, Alyeska said.

The shutdown, however, was a "significant event," BP spokesman Steve Rinehart said. BP and other oil companies operating on the Slope, including ConocoPhillips, have periodically been forced to cut output because of major power outages or when heavy winds interrupted tanker loadings at the port of Valdez, he said. But the latest shutdown means "a big reduction" in the middle of winter "when we have temperature and weather challenges" as well, Mr. Rinehart said. The temperature at the pump station where the incident occurred is about four degrees Fahrenheit.

BP said it was too early to say what impact the shutdown would have on the company's first-quarter earnings.

Total production on the North Slope is around 630,000 barrels a day—about 9% of total domestic U.S. output. (more)