North Slope oil production dipped in March, led by decline at Prudhoe Bay field

North Slope production dipped in March compared with February as warmer spring temperatures began to affect the productivity of oil and gas processing plants in producing fields.

The large Prudhoe Bay field led the decline, producing an average 314,352 barrels per day in March compared with 320,613 barrels per day in February.

Two other larger North Slope fields, the Kuparuk River and Alpine fields, also showed declines, with Kuparuk River marginally down, averaging 100,892 barrels per day in March compared with 103,500 in February, but the Alpine field producing 47,787 barrels per day in March, down from 51,074 b/d average in February.

In total, North Slope production averaged 483,340 barrels per day in March, down 11,542 barrels per day from February. The decline at Prudhoe Bay was a surprise because Hilcorp Energy, the field operator, has been adept at holding production steady in this mature, 46-year-old oil field even with some increases.

Hilcorp relies on a strategy of aggressive maintenance and stimulation of aging wells, which might have diminishing returns over time. Prudhoe Bay is closely watched because it still produces over half of North Slope’s production after almost five decades and is still North America’s largest oil field.

Year-over-year production in all three fields was only marginally down from March, 2022 but the drop from pre-pandemic March, 2019 is more substantial. The North Slope produced 511,640 barrels per day on average in March of that year, 8,241 barrels per day higher than March 2023.

Alaska officials expect production on the slope to hold steady at about 500,000 barrels per day through the rest of the decade. Dan Stickel, the state’s chief economist, told a state legislative committee last week that new projects now in development will offset the continued gradual decline of older fields.

The first substantial new production will come from Pikka, a project now being constructed by Australia-based Santos, Ltd. and its partner, Madrid-based Repsol.

Santos officials told financial analysts in Australia that they are optiminzing construction planning and hope to have a start of production earlier than mid-2026, the current target. Pikka’s first phase will produce 80,000 b/d at peak but plans are for a subsequent expansion to 120,000 b/d.

Construction of oilfield roads for Pikka is currently underway; drilling of production wells is scheduled to start in May with the building of field pipelines and utilities beginning next fall in the 2023-2024 winter construction season, Santos has told the state in project updates.

What Alaska officials were waiting for until Monday, April 3 was a decision by an Alaska federal district court judge on lawsuits by conservation groups against ConocoPhillips’ Willow project.

Willow is in the National Petroleum Reserve-Alaska west of the producing Alpine field, which is on state-owned lands.

The U.S. Department of the Interior has approved the $8 billion project and on Monday Alaska U.S. District Court Judge Sharon Gleason refused requests from conservation groups for a Temporary Restraining Order to halt ConocoPhillips’ winter construction work.

The company had already slowed some construction as a contingency against an adverse decision from the court. Gleason had to make her decision because the end of the cold weather North Slope construction season is nearing.

ConocoPhillips was at risk of losing the season and effectively delaying the project a year.

If it is built Willow will see peak production of 180,000 barrels per day. That could begin in 2029 if Willow stays on schedule, which is now more likely with significant project work now underway.