Producers 2025: North Slope renaissance underway

Kay Cashman

Petroleum News

Alaska is experiencing an upcoming oil production surge driven by the Pikka and Nuna oil projects, with Pikka expected to begin production in early 2026 and Nuna already online.

This will mark the first significant increase in the state's annual crude oil production since 2002, as these new developments offset the decline of mature oil fields and aim to boost economic activity and State of Alaska revenues.

A major development on the North Slope that will begin producing oil in the first quarter of 2026, is Pikka with its first phase expected to yield 80,000 barrels per day within three months after start-up. Pikka Phase 1 is operated by a subsidiary of Santos Limited.

The smaller Nuna project, operated by ConocoPhillips on the North Slope, started producing oil in December 2024.

The combined efforts from these two new projects are forecast to increase Alaska's annual crude oil output: the first significant year-over-year growth in many years.

In particular, the Pikka Phase 1 development is projected to generate significant revenue for the state.

Alaska's overall oil production has seen a long-term decline from its peak in 1988, largely due to the depletion of older, more productive fields.

The new developments are crucial for counteracting the ongoing decline.

The oil industry accounts for one-quarter of Alaska jobs and about one-half of the overall economy when the spending of State revenues from oil production is taken into account. In other words, without oil, Alaska's economy would be half its size.

In 2018, the industry accounted for more than 77,600 direct and indirect jobs and $4.8 billion in Alaska wages.

Alaska residents represent 84 percent of primary company total employment in the state. For every primary company job, another eight are supported by primary company activity in Alaska and seven more jobs are supported by oil-related taxes and royalty payments to the State of Alaska. Cleary, when the industry prospers, so does Alaska's economy.

Alaska Governor Mike Dunleavy delivered his seventh State of the State address on Jan. 28, 2025, maintaining an optimistic view on Alaska's resources, highlighting oil and gas development and progress on a natural gas pipeline.

Pikka Phase 2 is projected to produce another 80,000 barrels per day at peak production; construction is expected to begin shortly after Phase 1 is online.

The Willow project by ConocoPhillips is anticipated to produce at peak production 180,000 barrels per day starting in 2029, with overall investment is anticipated to be more than $8 billion dollars.

Daniel Donovan, Hilcorp Asset Team Leader, recently talked about the company's new Point Thomson well; the first to be drilled in Point Thompson since 2017

Donovan said Hilcorp will end up spending more than $180 million by the time the Point Thomson well is drilled, completed, and online in 2026, bringing daily condensate and natural gas production to 10,000 barrels per day.