North Slope oil production holds steady; gradual increase seen in spring as two new projects ramp up

Alaska North Slope oil production is holding generally steady, down slightly in January compared with December but essentially even with the same month a year ago.

January, 2021 average total production for the North Slope was 498,176 barrels per day, according to Alaska Department of Revenue production data.

The outlook is for a gradual increase in production through the spring as two new projects started by ConocoPhilips ramp up.

However, total production is still down 14,915 barrels per day from January 2020 and 25,103 b/d from January 2019, an effect of natural decline in the aging North Slope oil reservoirs but also the COVID-19 pandemic in 2020 and 2021 that resulted in curtailed drilling and other field development work.

Among producing fields on the slope Prudhoe Bay, operated by Hilcorp Energy, dipped slightly in January but was still above January 2020.

The Alpine and Kuparuk River fields, owned and operated by ConocoPhillips, showed small gains in January over December but were down year-over-year from January 2020 and 2019.

The small Lisburne field, also operated by Hilcorp, held generally steady in January over December and also year-over-year against January 2020 , averaging 21,274 barrels per day for January 2022.

The increase in the Alpine field of 5,483 barrels per day in January, compared with January 2020, was the first uptick for the field after an extended gradual decline.

It shows the production benefits of two new projects started by ConocoPhillips in December. These are Narwhal, a deposit south of the Alpine field on state lands, and GMT-2, west of Alpine on the federal National Petroleum Reserve-Alaska.

Both projects are continuing to ramp up, which will increase the production from Alpine field and the overall North Slope in the coming months.

Narwhal is expected to reach peak production of 30,000 barrels per day at full development, and GMT-2 is also projected to peak at 30,000 barrels per day, according to Pascal Umekwe, a commercial analyst with the state Department of Natural Resouces, or DNR.

Umekwe and other DNR officials briefed state legislators in Juneau earlier this month on production trends.

Not all of the newer North Slope projects are winners, however. GMT-1, another ConocoPhillips project in the NPR-A, has been operating for some time and is producing about half of what was originally expected because of technical problems in the reservoir, Umekwe told the legislators.

Another new project hitting headwinds is at Fiord West, an undeveloped deposit within the Alpine field being developed with extended-reach horizontal production wells, or wells drilled laterally from the surface location of a drill rig.

Some of the Fiord West wells are being drilled seven miles from the surface location of the rig. Technical complications has slowed progress on the first well.

ConocoPhillips has said Fiord West is expected to be producing in second quarter 2022 instead of first quarter. At its peak Fiord West is expected to produce 20,000 barrels per day, Umekwe said.

On more upbeat note for the long term Corri Feige, the state Commissioner of Natural Resources, told legislators in the briefing that she expects a Final Investment Decision on Pikka, a substantial project on state lands near the Alpine field, to come in the second quarter of 2022.

Pikka is being developed by Australia-based Santos, Ltd. and Repsol, based in Madrid, with Santos as operator and majority owner. In December Santos completed the acquisition of Oil Search, a New Guinea-based company, that had led development of Pikka.

Feige said that if Pikka proceeds a first phase of the project can be producing 80,000 barrels per day by 2025 with production increasing later to 160,000 barrels per day in a second phase.

Meanwhile, ConocoPhillps’ Willow project, another larger development in the NPR-A, is still bogged down in lawsuits brought by environmental groups.

A decision in 2020 by a U.S. District Court judge in Anchorage halted planned construction and voided permits issued by the U.S. Bureau of Land Management, which administers the NPR-A.

ConocoPhillips is now working with the BLM on a possible revised development plan for Willow that would resolve issues raised in the lawsuit, which was brought by the Center for Biological Diversity and other environmental plaintiffs.

If the issues are resolved the BLM will have to conduct a Supplemental Environmental Impact Statement and then issue new permits, a process that will take several years.

If Willow is developed, however, it could eventually add over 130,000 b/d to North Slope production, according to the briefing to legislators by the state DNR.