North Slope oil production dropped sharply in June but new projects will soon ease decline

North Slope oil production has been declining for years and took a sharp dip in June but producing companies are expected flatten the decline next year and increase production in 2006 and years following.

North Slope production averaged 439,255 barrels per day in June, down from 469,616 barrels per day in May and 463,028 barrels per day in June, 2023.

The drop in June reflected a seasonal decline that happens when production plants operate less efficiently as temperatures warm from the cold winter months. But it also indicates a continued, steady decline for the larger North Slope fields, which are aging.

However, two medium-sized new projects by ConocoPhillips and Hilcorp Alaska will add new output next year, in 2025, and potentially flatten the decline. In 2026 Santos Ltd.’s new Pikka field will be producing with an expansion expected shortly after. Santos, an Australian company, is in partnership with Repsol, based in Madrid.

ConocoPhillips has two new projects in the Kuparuk River field, Coyote and Nuna. A production pad for Nuna is in construction now and Nuna is expected to begin producing next year, adding 20,000 barrels per day to Kuparuk’s production.

Coyote’s deposit will be tapped with horizontal production wells drilled from nearby production pads and will not require a separate, stand-alone pad.

Hilcorp Energy is also expanding its Milne Point field, which is adjacent to and northwest of the Prudhoe Bay field. Hilcorp owns and operates Milne Point.

The company has completed Raven, a new production pad in the field which is expected to add about 10,000 barrels per day. This would bring Milne Point production up to 60,000 barrels per day from its present rate near 50,000 barrels per day.

Santos is meanwhile well along in construction of its new Pikka field, which is near the producing Alpine field on the western slope. Santos intends to start production in mid-2026. Pikka’s phase one, involving one production pad, will add 80,000 barrels per day to production. A phase two at Pikka is expected to add an equal volume.

Santos has also told state officials it will start detailed engineering for phase two this year.

ConocoPhillips also continues construction of the new Willow field on federal lands in the National Petroleum Reserve-Alaska. Willow is southwest of the Alpine field, which is on state lands. Willow is expected to begin production in 2029 with a peak output of 180,000 barrels per day.

Production data is watched closely because state royalty and tax revenues are paid on the basis of oil produced. Putting the current rate of 439,255 barrels per day in June in context, five years ago, the slope averaged 480,225 barrels per day in June, on average. Ten years ago, the June output was 500,526 barrels per day.

The aging of fields and wells is the major factor in the long-term drop because all oil and gas reservoirs eventually decline. The largest field, Prudhoe Bay, is nearing half a century in operation. Prudhoe has been producing since 1977. Kuparuk River, the next largest field, has been operating since 47 years.

Surprisingly, in recent years Prudhoe Bay, which is in the central North Slope, has been the most resilient, producing 284,381 barrels per day in June compared with 291,462 barrels per day in June, 2023 and 280,264 barrels per day in June 2022. Ten years ago, in June 2914, Prudhoe was averaging 294,537 barrels per day, according to the state data

Prudhoe’s performance is credited partly to its operator, Hilcorp Energy, which has a reputation for aggressive development work in older fields, and the natural tendency of older oil and gas reservoirs to decline more slowly as they age.

Two other North Slope fields, Kuparuk River and the Alpine, both owned and operated by ConocoPhillips, have seen more significant declines. Kuparuk River, which is adjacent and west of Prudhoe Bay, averaged 85,502 barrels per day in June compared with an average 103,278 barrels per day in June, 2023 and 101,527 barrels per day in the same month in 2022. Five years ago Kuparuk averaged 128,404 barrels per day.

Alpine, which is further west and near the Colville River, averaged 50,000 barrels per day in June, down from an average 52,952 b/d in June 2023 and 53,935 b/d in the same month of 2022. Five years ago Alpine averaged 63,169 barrels per day in June.