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Continued growth in oil
With big new projects coming on, North Slope will top 600,000 bpd in 10 years
Kristen Nelson Petroleum News
The Alaska Department of Natural Resources has a positive outlook on North Slope production for the next 10 years. In contrast to 10 years ago, when the 10-year outlook saw dropping production, the current 10-year forecast shows production rising to more than 600,000 barrels per day as big new projects come online in that forecast period.
In updates to Alaska Legislature's House and Senate Finance committees Jan. 22 and Jan. 23, DNR's Division of Oil and Gas highlighted recent production and the fiscal year 2025 forecast, as well as the 10-year outlook.
Travis Peltier, petroleum reservoir engineer with the resource evaluation section of the division, leads the forecast team and provided the bulk of the forecast presentation.
He did note that while actual fiscal year 2024 production (July 1, 2023, through June 30, 2024) was within the forecasted range, 5% between the low and high estimates, it was 2% lower than forecast.
At the end of every forecast period the forecast group sits down and analyzes its work, looking to improve its methods for the future. When that occurred after completion of the FY2024 forecast they found an error, a calculation bias, which resulted in a 1% error, half of the difference between the FY2024 mean forecast and the actuals, Peltier said. That was corrected for the FY2025 forecast and going forward.
The other 1% difference, he said, came from unforeseen events: the Point Thomson sales line froze up in mid-January 2024 and that production didn't come back online until May; the number of wells drilled wasn't what the division expected; and there were some variations on the forecast for various fields.
Forecast horizon A number of factors shape the forecast, Peltier said, including continuing industry interest in the Nanushuk across the North Slope; existing federal restrictions -- which may change with the new administration; equipment constraints resulting from work at Pikka and Willow ramping up; and overall inflation.
North Slope production was down 4% from FY2023 to FY2024, led by decreases at Colville River, Endicott and Kuparuk -- where, however, natural decline was offset with development drilling; at Nikaitchuq, Northstar and Oooguruk where natural reservoir decline was not offset by infill drilling in the FY2023 to FY2024 time period; Prudhoe Bay has natural decline and production was negatively impacted by maintenance turnarounds in the summer of 2023, which had more of an impact than in previous cycles under Hilcorp, and natural decline; and at Point Thomson where the sale pipeline was frozen for most of the first half of FY2024.
Increases occurred at Badami with the successful workover of the B1-07 well; at Greater Mooses Tooth where development drilling continued at the GMT2 pad; and at Milne Point which has seen production growth from infill drilling, rig workovers and two large new pads.
Milne update Milne Point is the current North Slope success story.
The field was producing under 19,000 barrels per day when Hilcorp took over as operator in 2014, Peltier said. The field averaged more than 48,000 bpd in December, the most recent month for which Alaska Oil and Gas Conservation Commission data is available. Peltier said Hilcorp is expected to continue to achieve production growth at Milne and exceed 50,000 bpd per day.
Maximum Milne Point production when BP operated the field reached almost 59,000 bpd in July 1998, mostly Kuparuk light oil, although BP had some Schrader Bluff production.
Hilcorp increased infield drilling, introduced polymer flooding in the Schrader Bluff formation, added two new pads, M and R, and did facility expansion allowing for more water handling, which was some 130,000 bpd under BP and is now some 200,000 bpd.
Hilcorp chose to invest a lot of time drilling new wells at Milne Point, Peltier said, and has drilled simpler wells, which are easier to manage and focused its drilling on Schrader Bluff.
John Crowley, deputy DNR commissioner, noted that Hilcorp has just acquired Nikaitchuq and Oooguruk, two declining fields. He said these fields have geologic similarities to Milne Point, and DNR thinks Hilcorp could do some of the same things at those fields it did at Milne Point, which could result in production increases for those fields as well.
Key future projects Peltier highlighted smaller and larger future projects on the North Slope.
There were three smaller projects on the list: ConocoPhillips Alaska's Kuparuk River Nuna-Torok at drill site 3T where production came online in December, with an expected peak rate of 20,000 bpd; Mustang, which Finnex took over in October 2023, with work in 2024 including pad expansion, pipeline tie-in, pad restart activities and drilling of two development wells, also had production startup in December, with a 4,000 bpd expected peak rate; and Minke at the Colville River unit, where success at the CD5-32X well prompted ConocoPhillips to plan a productor-injector pair this year, with production depending on results.
The larger projects are Pikka and Willow, with construction underway at Pikka phase one and Willow. Santos, owner of Pikka operator Oil Search (Alaska), has said Pikka is expected to be online in the second quarter of 2026, although Peltier said that in investor presentations Santos has said it might be able to accelerate first production to December of this year. Peak rate in phase one is 80,000 bpd, with an equal amount in phase two, on which a final investment decision is expected in 2027. At Willow, construction is ongoing with first oil anticipated in 2029 at a peak rate of 180,000 bpd.
In the fall forecast the division said North Slope production is pegged at more than 650,000 bpd in FY2034, the end of the current forecast period. The forecast for FY2025 is 466,000 bpd.
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