ConocoPhillips’ voluntary reduction kicks in

ConocoPhillips’ voluntary reduction of 100,000 barrels per day of its North Slope production has kicked in.

Overall oil production from the slope dropped to 391,275 barrels on May 31, an indication that ConocoPhillips’ cut in output is fully in effect. Normal production on the slope is about 500,000 barres; day at this time of year.

Two fields where ConocoPhillips is majority owner and operator, the Kuparuk River and Alpine fields, are carrying the reduction of oil output.

In other fields, such as Prudhoe Bay and Milne Point, where other companies are operators and owners, production is at normal levels for late May and early June.

Kuparuk, operated by ConocoPhillips, was down to 62,513 barrels on May 31 compared with 131,000 barrels per day, its normal level, five weeks earlier as ConocoPhillips began gradually phasing in its production cut.

The Alpine field, also operated by ConocoPhillips, was at 20,106 barrels on May 31 compared with its normal rate of 55,000 barrels per day at this time of year.

The large Prudhoe Bay field, which produces over half the North Slope’s total production, was at 288,240 barrels on May 31, on par with its normal production of about 290,000 barrels per day.

Prudhoe is operated by BP with the field ownership shared between BP, ConocoPhillips and ExxonMobil.

ConocoPhillips cannot reduce its share of Prudhoe without the other owners reducing their production under operating agreements between the three companies.

Hilcorp Energy is also keeping production up at the Milne Point field, which is adjacent to Prudhoe Bay. Hilcorp is producing over 30,000 barrels per day at Milne, according to production reports by the Alaska Oil and Gas Conservation Commisison.

However, HIlcorp recently completed facilities to enable it to produce 36,000 barrels per day, company officials told a state legislative committee.

Hilcorp has also continued drilling at Milne Point with two rigs working in contrast with ConocoPhillips and BP, which have laid down seven rigs in response to low oil prices.

ConocoPhlllips undertook its voluntary reduction to help reduce West Coast crude oil inventories.

“The curtailment will last through the month of June. There are no changes to that plan,” ConocoPhillips spokesperson Natalie Lowman said.

North Slope producers including ConocoPhillips are keeping a close eye on crude oil in storage tanks at the Valdez Marine Terminal, which was at 5.1 million barrels on May 31.

Valdez is at the southern terminus of the Trans Alaska Pipeline System, which begins on the North Slope.

The 14 tanks at Valdez have a maximum working capacity of about 6.6 million barrels, according to Alyeska Pipeline Service Co., the pipeline and terminal operator.

Alyeska had instituted a 75,000 barrels per day throughput reduction in early May to bring down inventory levels in the tanks, spreading the cut among North Slope producers, but then restored full throughput later in April, at about the time ConocoPhillips began reducing its output.

Despite current production cuts and demobilization of drill rigs ConocoPhillips and Hilcorp have continued work on new field projects.

Work on GMT-2 construction by ConocoPhillips is continuing in the National Petroleum Reserve-Alaska west of the Alpine field, and Hilcorp recently completed a polymer injection project at Milne Point to aid the production of viscous, or thick, crude oil.