Alaska North Slope production holding steady but some fields in decline

Alaska North Slope crude oil production showed small increases in October over September as colder weather set in, which made production facilities more efficient.

Output was generally steady, if slightly down, in a year-over-year comparison against October 2020, according to Alaska Department of Revenue Nov. 1 production reports.

Overall, the production held steady but two fields, the Kuparuk River and Alpine fields, showed significant decline in October compred with the same month of 2020.

Much of this was due to natural decline in both fields, which are aging. Also, ConocoPhillips, the operating company in both fields, cut drilling of new production wells last year when oil prices crashed. Drilling is now being brought back.

The North Slope produced an average of 481,964 barrels per day total in October compared with an average 493,250 barrels per day in October 2020.

Among the producing fields on the slope the large Prudhoe Bay field saw increased production compared with both September, a month earlier, and October a year ago, up 5,918 barrels per day from September and 5,172 b/d from October 2020 mainly due to aggressive field maintenance work by its operator, Hilcorp Energy.

The ConocoPhillips-operated Kuparuk River and Alpine fields, the two other major North Slope fields, were both down from October 2020.

Kuparuk was actually was up 5,723 barrels per day from the September, a month earloier, but down 7,617 barrels per day year-over-year, from October 2020.

The Alpine field showed a 1,546 barrels per day decrease in October compared with September and a 8,695 barrels per day decrease from October 2020.

The smaller Lisburne field held generally steady in production against both September and October the year prior at about 20,000 b/d. Production from several small accumulations such as Endicott, Point McIntyre and Niakuk are included in the count for the small Lisburne field itself.

In general, the North Slope fields are continuing in a steady decline as they age. October 2021 total slope production of 481,964 barrels per day is down 42,544 barrels per day from the 524,508 b/d average production rate of October 2015, for example.

Going forward, the state revenue department said Oct. 29 it expects North Slope production to average 488,400 barrels per day through to next June, the end of the state fiscal year.

The department said it will publish a longer-term production outlook in January.

Meanwhile, two pending new projects, both by ConocoPhillips and in advanced development, could temporarily slow the decline.

Fiord West, in the Alpine field, is due to begin producing in early 2022, with an expected peak rate of 20,000 barrels per day. GMT-2, in the National Petroleum Reserve-Alaska, or NPR-A, is nearing completion and is expected to begin producing by year-end with an expected peak of 35,000 barrels per day.

There are also two larger new projects that could also be producing by 2025 or 2026. One is ConocoPhillips’ Willow project, in the National Petroleum Reserve-Alaska, that could produce 150,000 b/d, although it is now stalled by lawsuits brought by conservation groups along with an adverse court decision in the litigation.

In a recent statement the company said it is working with the U.S. Bureau of Land Management, the federal agency managing the NPR-A, to resolve issues raised in the litigation.

A second larger project is Pikka, planned by New Guinea-based Oil Search and Repsol, which could produce 120,000 barrels per day if fully developed.

A Final Investment Decision is planned for the end of 2021 but this schedule could be affected by a pending sale of Oil Search to Australia-based Santos.

There are other projects underway that will stem decline.

These include Nuna, an undeveloped smaller deposit near the Kuparuk field, and “Coyote,” a new geologic trend in the Kuparuk that shows promise.

“These will leverage existing infrastructure, the existing pads, facilities and pipelines, so these are very low cost of supply opportunities that we’re progressing,” said Nicolas Olds,, ConocoPhillips’ executive vice president of global operations, at the company’s Nov. 2 call with financial analysts.

“On the Prudhoe front, we’re seeing great efficiency improvements and safety performance. These continue to reduce costs across the board,” Olds said. Hilcorp is the operator at Prudhoe but ConocoPhillips is a major owner in the field.