North Slope production held steady in August; small declines seen in larger fields

Alaska North Slope production dipped in August, down 16,553 barrels per day on average compared with July but even year-over-year against August 2023, according to Alaska Department of Revenue production data.

Production totaled 429,442 barrels per day in August compared with 445,995 barrels per day in July and 423,803 barrels per day in August, compared year-over-year against August, 2023.

North Slope is important to the Matanuska-Susitna Borough because a substantial percent of residents work on the slope, either for producing companies or contractors.

All of the four major producing areas on the North Slope showed small declines in August except for the Kuparuk River field, which gained slightly.

North Slope production is typically lower in summer and higher during the cold winter months when oil and gas operating plants are at their peak efficiency. In January, for example, North Slope output averaged 475,181 barrels per day.

The major producing fields are also showing a continued gradual decline typical of mature reservoirs.

Prudhoe Bay, the largest of the North Slope fields, is now 47 years old; Alpine, the second largest on the slope, is 43 years old. The Alpine field, newest among the major fields, is 23 years of age. The large fields are past their production peaks but a long, gradual decline is typical as producing reservoirs age.

While the North Slope is producing less than a fourth of its initial production over 2 million barrels per day in the 1980s, Alaska officials expect the decline to be reversed modestly when two new projects, Pikka and Willow, come on line in 2006 and 2009 respectively. Pikka is estimated to add 180,000 barrels per day beginning in the first half of 2006 in its first phase and more in a second phase to be developed shortly after, according to Santos, Ltd., the majority owner and operator. Repsol is Santos’ partner with a minority stake.

ConocoPhillips also has its larger Willow field in construction. It is scheduled for completion and first production in 2009, and will add 180,000 barrels per day at peak to production from the slope.

The Alaska Department of Natural Resources, which does annual long-term production forecast for the state, expects an overall increase in slope production by 2030 with Willow on production but warns that the continued decline of the older “legacy” fields of the slope will continue.

Despite the uptick there is continuing concern for the viability of the Trans Alaska Pipeline System, or TAPS, which will be more than half and century old by 2030, when the increase is projected.

Alyeska Pipeline Service Co., which operates TAPS, has said it can operate the pipeline in its present configuration down to about 300,000 b/d and can operate at lower volumes with major modifications. Those will add to the per-barrel costs of transporting oil from the slope, however, so the question is more one of economics than technical feasibility, Alyeska has said.

Geologists have expectations for continued discoveries on the North Slope but for modest discoveries, not the giant field finds like Prudhoe Bay and Kuparuk River of 40 to 50 years ago.

U.K.-based Pantheon Resources and Australia-based 88 Energy are continuing further exploration and development planning of small discoveries south of Prudhoe Bay.

Pantheon plans further test drilling this year and 88 Energy is planning a long-term production test in 2026 with a horizontal well at its discovery near Pantheon’s finds.

Both companies’ discoveries are near the Trans Alaska Pipeline System, and proximity to the pipeline means they may be able to produce oil with small modular production facilities.

Pantheon continued to be optimistic about the central North Slope area. The company was awarded 46 new leases covering 160 square miles in the area by the State of Alaska Sept. 1 from bids offered in a fall, 2023 state lease sale.

Another exploration initiative being watched closely is on the eastern North Slope where Lagniappe Alaska, a subsidiary of Denver-based Armstrong Oil and Gas, is drilling six test wells in a partnership with Apache.

Lagniappe drilled three test wells earlier this year and plans three more next winter. Oil was discovered in two of the wells drilled but the company has released no further information. The company is bullish enough, however, that it is expanding its lease position. On Sept. 1 the state awarded Lagniappe 20 onshore leases and three offshore leased from bids also made in the state 2023 areawide sale.