ConocoPhillips to develop new North Slope project to add production in 2025

Alaska North Slope production dipped in May compared with April, mostly in the large Prudhoe Bay field, the largest of the producing field on the slope, according to June 1 production data from the state Department of Revenue. Output was roughly level in other fields. Total North Slope production dropped 5,531 barrels per day on average from April to May. The drop was almost entirely attributed to Prudhoe Bay, which is operated by Hilcorp Energy LLC.

In a related development ConocoPhillips Alaska announced June 1 that funding has been approved for developing the Nuna project from the 3T drillsite in the Kuparuk River field, which is expected to add 20,000 barrels per day in new production in early 2025.

ConocoPhillips acquired the Nuna acreage in 2019 from Dallas-based Caelus Energy, who had already constructed the gravel road and pad for drillsite 3T. Construction will begin at Nuna this year and continue in 2024 with pipeline and on-pad construction. Drilling is anticipated to begin in late 2024 with first oil anticipated by early 2025, with an expected peak oil rate of 20,000 barrels per day.

“The additional drilling opportunities we’ve identified at Nuna are a positive development that should increase oil production at Kuparuk,” said Erec Isaacson, President, ConocoPhillips Alaska. The Nuna project will add 29 development wells, on-pad infrastructure and pipelines that tie back to existing Kuparuk River processing facilities. Drillsite 3T will be the 49th drillsite developed wi in the Kuparuk field.

Erec Isaacson, president of ConocoPhillips Alaska, credited an improving investment climate in Alaska. “Our investment in this project was approved due to Alaska’s stable fiscal regime which is clearly working to promote new and ongoing investment. ConocoPhillips Alaska will continue to invest about $1 billion a year to grow our Alaska legacy business with projects such as Nuna,” he said in a statement.

In terms of production, seasonal drops in North Slope output are typical because oil and gas processing facilities are less efficient in warmer temperatures compared with colder winter months. The decline in May was in Prudhoe Bay, where facilities are older and there is less incremental new production coming to facilities in the field.

In the Kuparuk and Alpine fields, in contrast, there are newer projects such as oil from the Narwhal deposit south and GMT-1 and GMT-2 in the nearby National Petroleum Reserve-Alaska, which send unprocessed raw crude oil to processing facilitiies in the larger Alpine field and are included in its production count. Both fields are operated by ConocoPhillips.

The Kuparuk River field, second largest on the North Slope, averaged 101,373 b/d in May, up from 100,605 barrels per day in April and 104,871 barrels per day in May, 2022s; the Alpine field produced 54,806 barrels per day on average in May, up from 51,914 barrels per day in April but down from 57,794 barrels per day in May, 2022. The small Lisburne field, which also supports production from several small adjacent deposits, produced an average 19,373 b/d in May; 20,926 barrels per day in April and 18,375 b/d in May 2022. Lisburne is operated by Hilcorp Energy, also operator at the adjacent Prudhoe Bay field.

The outlook for stable and increased production on the North Slope is considered good. Santos Ltd. and Repsol, partners in the large Pikka project now in construction, expect to begin production in a first phase in 2026 at an estimated 80,000 barrels per day. The companies are now assessing a phase two expansion.

ConocoPhillips meanwhile continues to await an Alaska federal court decision on lawsuits filed by conservation groups against its large Willow project in the National Petroleum Reserve-Alaska west of the Alpine field. Alaska U.S. District Court Judge Sharon Gleason did approve the construction of a gravel access road to the Willow site earlier this spring, disallowing requests from the plaintiffs for a Temporary Restraining Order.

Other activity at Willow is on hold until Gleason makes a final ruling, however. ConocoPhillips has said it will not make a Final Investment Decision until the project is clear of the court challenges. Willow is expected to cost from $7 billion to $8 billion and, if built, could produce a peak rate of 180,000 barrels per day beginning in 2029, ConocoPhillips has said.