Anchorage — Alaska North Slope production is expected to average 477,294 b/d in the state's Fiscal Year 2021, the current budget year that ends June 30, but could drop to 439,587 b/d in Fiscal 2022, the state Revenue Department has said.
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Production is expected to recover to 446,963 b/d on FY 2023 and 263,335 in Fiscal 2024, the department said Dec. 14. The estimates are mid-case forecasts. The revenue department also developed high and low cases.
"Drilling and investment were sharply reduced this year, and are reflected in the lower near-term forecast, but we are hopeful that new developments will contribute to stabilizing production over the coming decade," Revenue Commissioner Linda Mahoney said in a statement.
North Slope fields are expected to be back to an average of 481,843 b/d by FYl 2030 based on plans for new projects by producers, Mahoney said.
The Revenue Department also included estimates for Cook Inlet, in southern Alaska, which is forecast to produce 15,400 b/d on average in FY 2021, down from an average of 17,900 b/d the previous year.
The decline in the current year North Slope production average is mainly due to cutbacks in production last summer when Alyeska Pipeline Service Co. ordered a 25% reduction of pipeline throughput because of slack market demand, and ConocoPhillips instituted a one-month 100,000 b/d reduction in producing fields on the slope that it controls.
The reductions were lifted by mid-summer and TAPS returned to its normal summer throughput. In November, slope producers averaged 499,233 b/d.
Drilling was also cut last spring in the three largest producing fields -- Prudhoe Bay, Kuparuk River and Alpine -- which will have a lagging negative effect on production over the next year from the loss of incremental output from new production wells drilled in the fields.
ConocoPhillips said in November it would put some rigs back to work next spring, but the benefits of that new oil will not be felt for some time.
One new project in construction that has remained on schedule despite the plunge in oil prices and concerns over the coronavirus is ConocoPhillips' GMT-2, in the National Petroleum Reserve-Alaska west of the producing Alpine field.
GMT-2 is on track to be completed and in production in late 2021 with a peak rate of 35,000 b/d to 40,000 b/d. It is the main reason why state forecasters see an improvement in output by 2024. One other smaller project is ConocoPhillips' Fiord West, in the Alpine Field, where development will be resumed next year. Fiord West is expected to add 20,000 b/d in new production.
Two larger projects now in advanced planning includes ConocoPhillips' Willow, also in the NPR-A and west of GMT-2, and Pikka, a project on state lands near the Alpine field.
Final engineering on both projects is expected to be underway in 2021 with final investment decisions late in the year. Willow is expected to produce more than 100,000 b/d, ConocoPhillips has said, with a cost at full development of $6 billion. Pikka, being developed by Papua New Guinea-based Oil Search and minority partner Spain's Repsol, is expected to produce 80,000 b/d in an initial phase and 120,000 b/d when built out, with an initial phase one cost of $3 billion and $6 billion, respectively, when fully developed.
The expectation of these projects and several smaller ones underpin the state's expectation of a return to 488,000 b/d by 2028.