North Slope production holds steady, thanks to Hilcorp Energy’s work at Prudhoe Bay

Alaska North Slope production held stable in November, compared with the same month a year prior, but was increasing in early December as cold winter temperatures on the slope increased the efficiency of oil processing plants.

Year-over-year, November production averaged 496,304 barrels per day, almost dead-even with the 499,223 barrels per day average for the same month of 2020.

The current stability in overall slope production is due mainly to increases in the large Prudhoe Bay field operated by Hilcorp Energy, which produced 322,497 barrels per day in November, on average, compared with 305,002 barrels per day for November 2020 average production.

This offset year-over-year declines in in November in two other North Slope fields, the Kuparuk River and Alpine fields, both operated by ConocoPhillips. Kuparuk River averaged 106,434 barrels per day in November 2021 compared with 119,530 barrels per day in November 2020. The Alpine field averaged 46,055 barrels per day in November 2021 compared with 52,267 barrels per day in November 2020.

Compared against 2019, the declines in Kuparuk River and Alpine were even steeper. Kuparuk River averaged 132,463 barrels per day in November 2019 against 119,530 barrels per day in November 2020 and 106,434 in November 2021. Alpine averaged 65,793 barrels per day in November 2019 compared with 52,267 b/d in November 2020 and 46,055 barrels per day in November 2021.

The small Lisburne field has meanwhile been holding steady over, producing 21,318 barrels per day on average in November 2021 against 22,445 barrels per day in November 2020 and 23,067 barrels per day in November 2019.

The Lisburne production includes output from several small satellite accumulations near the eastern Prudhoe Bay field which process oil through the Lisburne production facility. The state revenue department publishes the data separate from its Prudhoe Bay field totals.

Meanwhile, ConocoPhillips is making final arrangements to start up its new GMT-2 project in the National Petroleum Reserve-Alaska. The $1 billion project is expected to add 35,000 barrels per day at peak to total slope output, but production will be ramp up gradually through early 2022.

While a boost to production is expected thanks to GMT-2, two other ConocoPhillips projects are delayed.

The expected production start data for Fiord West, an undeveloped deposit in the Alpine field being developed with long horizontal wells from an existing drill site, has been pushed back from the first quarter of 2022 to the second, the company said.

Fiord West is expected to add 20,000 barrels per day at peak to total North Slope production.

The company gave no reason for the delay but cited technical challenges with long horizontal production wells planned for the project. These require drilled laterally as far as seven miles from the surface location of the drill rig.

A second, larger project being delayed is Willow development, an estimated $6 billion project west of the Alpine field in NPR-A. Willow has become snarled in litigation brought by conservation and tribal groups. ConocoPhillips had hoped to make a Final Investment Decision, or FID, on Willow in early 2021. Meanwhile, final engineering work is continuing.

Willow is now on hold as the company works with the U.S. Bureau of Land Management, which administers the NPR-A, to resolve issues raised in an Alaska federal district court decision earlier this year. U.S. District Court Judge Sharon Gleason voided permits and a federal Record of Decision, or ROD, issued earlier by BLM.

Conservation and tribal groups argued in the lawsuits that BLM and ConocoPhillips had not adequately considered alternatives in design of field development facilities that would be less environmentally damaging.

Neither the BLM or ConocoPhillips has given an expected timeline on getting the issues resolved, which could require some redesign of the field layout, but when this happens and if it meets the court’s approval a revised Supplemental Environmental Impact Statement will likely be needed according to industry sources.

This would take about two years, after which a revised ROD and permits could be issued, allowing ConocoPhillips to move ahead with its FID.

ConocoPhillips has said it has flexibility in its construction schedule for Willow and can still achieve a 2025 or 2026 target for the field startup.

If developed, Willow will add 160,000 barrels per day at peak to total slope production but what is more important is that the extension of infrastructure like pipelines and roads being built several miles west and a new Willow processing plant will make it more likely that new discoveries made west of Willow can be economically developed, ConocoPhillips has said.

Alaska state officials are also closely watching plans by Oil Search, based in Papua, New Guinea, and its partner Repsol, to make a Final Investment Decision on an initial production phase of Pikka, a potential one-billion-barrel field on state-owned lands near the Alpine field.

Oil Search is involved with a proposed acquisition by Australia-based Santos, which could affect the timing of the FID. Also, both Oil Search and Santos are still working on bringing in a new investor in Pikka to spread risk.

Pikka is located near existing North Slope pipeline infrastructure, which will enhance its prospects for development.