North Slope oil production held steady in November from October, but was down year-over-year

Things are getting busy on the North Slope.

On one hand, production held steady in November compared with October. On the other hand it was down substantially year-over-year from the same month in 2022.

However, new fields in construction will add new output starting in 2026. But the surge of new construction is adding to workforce availability and supply chain concerns.

Overall Alaska North Slope production held steady compared with October but was down about 30,000 barrels per day year-over-year, comparing November 2023 with November 2022.

November production, including crude oil and natural gas liquids, averaged 469,799 barrels per day, up 1,279 barrels per day from the October average of 468,500 barrels per day, according to Alaska Department of Revenue data available Dec. 4.

The year over year output was down 29,045 barrels per day comparing November with the same month a year prior, which averaged 493,844 barrels per day.

Usually, North Slope fields increase in production in late autumn because of colder temperatures as winter sets. But it hasn’t happened yet this year.

State officials have predicted a production average of about 500,000 barrels per day for the year, but output may fall below that.

A new long-term forecast is expected in mid-December as part of Alaska’s December revenue forecast. The State Department of Natural Resources develops the production forecast.

Comparing the four major producing areas of the slope, where production is metered from the large fields, the Prudhoe Bay field, largest on the slope, showed a small increase in November, producing an average of 304,782 barrels per day for the month, up from 295,805 barrels per day in October, according to the state data.

Hilcorp Energy, a major independent, is operator at Prudhoe Bay on behalf of itself, ConocoPhillips and ExxonMobil as field owners.

The Kuparuk River field, second largest on the slope, averaged 99,635 barrels per day in November, down from 101,654 barrels per day in October and from 104,746 barrels per day in November, 2022.

The Kuparuk field is on state lands and is owned and operated by ConocoPhillips and is west of the larger Prudhoe field.

The Alpine field, also owned and operated by ConocoPhillips and also on state lands, declined in November to 46,799 barrels per day from 51,941 barrels per day in October and from 50,543 barrels per day, on average, in November 2022.

Alpine is west of Kupuruk and Prudhoe and borders the National Petroleum Reserve-Alaska, the large 23-million-acre federally-owned area west of the state-owned lands with the large producing fields.

One smaller producing area, the Lisburne field that underlies the eastern Prudhoe Bay field, held steady in November, producing 19,317 barrels per day on average compared with an average 19,100 barrels per day on average.

Lisburne also steady year-over-year, producing an average 19,954 barrels per day in November 2022 against 19,327 barrels per day on average in the most recent November. Lisburne is owned and operated by Hilcorp Energy.

Each of the four producing regions of the slope also support smaller satellite reservoirs and fields that are connected by pipelines to larger fields where the metering is also done.

The Alpine field, for example, supports the smaller GMT-1 and GMT-2 producing projects in the National Petroleum Reserve.

In aggregate the North Slope fields are showing gradual decline, which is expected, but development work on a larger new project, Pikka, is proceeding on schedule.

Pikka, which will produce 80,000 barrels per day in a first phase, is operated by Australia-based Santos Ltd. and is half-owned by Repsol, based in Madrid.

Santos executives told investment analysts in November that construction at Pikka for phase one is essentially 30 percent compete. The field is expected to begin producing in early 2026, ramping up quickly to 80,000 barrels per day and remaining on plateau for five to six years.

Five wells for production have also been drilled at Pikka of more than 40 that are planned.

A phase two at Pikka is well along in planning, involving additional production pads and wells and increasing field output to about 120,000 barrels per day.

Meanwhile, ConocoPhillips is proceeding with a construction start at its large Willow project further west in the NPR-A. In early November a federal judge in Alaska ruled against environmental groups who filed lawsuits to block the project. U.S. District Court Judge Sharon Gleason also denied appeals of her decision filed by the plaintiffs.

The case will be appealed to the U.S. Ninth Circuit Court of Appeals but Gleason has a good track record in the Ninth Circuit of her decisions being upheld.

ConocoPhillips will mainly focus on road construction and other civil projects at Willow this winter. Pipeline construction is expected to begin next winter.

It will be a busy season for contracts on the slope this winter. Santos will employ about 1,000 workers at Pikka and ConocoPhillips will employ another 1,200.

The petroleum contractor workforce on the North Slope has been very low through the COVID-19 pandemic and during several years of low oil prices that preceded that.

The surge of new work has raised concerns about labor availability for the new projects as well as continuing supply-chain problems.