ConocoPhillips cuts Alaska production 100,000 barrels per day due to market oversupply

ConocoPhillips Alaska said Thursday it will curtail oil production by approximately 100,000 barrels per day for the month of June from fields it operates on the western North Slope, mainly the Kuparuk River and Alpine fields.

“The ramp down to reduce production will begin in late May and is part of broader curtailments in the Lower 48 and other areas. Any extensions of the curtailment beyond June will be determined on a month-to-month basis. The curtailment is not expected to impact operations of the Trans-Alaska Pipeline,” the company said in a press release.

“This decision was made in response to unacceptably low oil prices resulting from global oil demand destruction caused by the impacts of the COVID-19 pandemic, combined with a global oversupply of oil. The curtailment will essentially leave the oil stored in the reservoirs, available for resumption of production at a later date,” the company said.

The actions ConocoPhillips Alaska is taking with this production curtailment underscore the extraordinary challenges currently facing the oil and natural gas industry in Alaska and elsewhere. During the first quarter of 2020, ConocoPhillips Alaska produced 218,000 net equivalent barrels of oil per day in Alaska. Total Alaska production, the bulk of it from the North Slope, is just over 500,000 barrels per day.

The reduction will reduce production from the slope, and throughput through the Trans Alaska Pipeline System, by about 20 percent, from 500,000 barrels per day to about 400,000 barrels per day. Alyeska Pipeline Service Co. recently announced a 50,000 barrel/day reduction in throughput to slow the buildup of crude oil inventory in storage tanks in Valdez with the reduction to be shared among the slope producers.

ConocoPhillips’ share of the TAPS-ordered reduction would be included in in its own voluntary reduction.