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ANS oil production to stay slightly above 1 million barrels a day through 2010 Department of Revenue says production from NPR-A more of a sure thing in this decade than production from Liberty, Sandpiper or Point Thomson Kristen Nelson PNA Editor-in-Chief
Alaska North Slope production, which averaged less than 1 million barrels per day for the first time in fiscal year 2001 (ending June 30, 2001) since it peaked at 2.005 million bpd in 1988, is expected to once again average more than 1 million bpd this fiscal year — and to continue at that level through fiscal year 2010.
ANS production averaged 991,000 bpd in fiscal 2001, is expected to average 1.012 million bpd this fiscal year and peak at 1.12 million bpd in fiscal 2005 before declining again, averaging 1.036 million bpd in fiscal 2010. And new oil — crude already discovered and likely to be developed — will be a larger and larger part of ANS production: 3.2 percent in 2002, 8.6 percent in 2003, 9.6 percent in 2004, 13.8 percent in 2005, rising to 27.1 percent in 2010.
New oil includes NPR-A, which Revenue estimates producing 40,000 bpd by 2007; Foothills and east of Prudhoe Bay, 34,000 bpd by 2008 and central North Slope satellites, 14,000 bpd by 2006.
Alpine satellites Fiord and Nanuk, where operator Philips Alaska Inc. is permitting new pads and pipelines — are expected to begin production in 2006 — 15,000 bpd from Fiord and 11,000 bpd from Nanuk.
Foothills and east of Prudhoe New oil in the foothills is all undiscovered at this point, but Revenue said based on a 1993 U.S. Geological Survey estimate of recoverable reserves in the central foothills and technological advances that have lowered costs, foothills production is estimated to be contributing 83,000 bpd by fiscal 2010.
Discovered fields that could be in production this decade include two offshore and three onshore discoveries: Liberty (offshore between Endicott and Badami) could begin producing at 35,000 bpd in 2005, followed by Sandpiper (offshore northwest of Northstar) at 12,000 bpd in 2008.
Onshore fields included in Revenue’s anticipated production forecast for this decade include three discoveries on the eastern edge of the North Slope adjacent to the Arctic National Wildlife Refuge: Point Thomson at 20,000 bpd in 2008; Sourdough at 10,000 bpd in 2008; and Yukon Gold at 10,000 bpd in 2009.
Development not sure But Revenue said that some of these developments could be deferred or cancelled. “Specifically, Point Thomson, a field discovered in the mid-1970s and still undeveloped, might remain undeveloped for the next 10 years.”
The Point Thomson owners and the Department of Natural Resources recently reached agreement on a development plan that could result in liquids production by 2008. “However,” Revenue said, “the Point Thomson unit owners could forego development and pay compensation to the state for unfulfilled drilling obligations.” Sourdough and Yukon Gold — two small oil reservoirs near Point Thomson — would likely begin production a few years after Point Thomson, but would not be developed if Point Thomson is not developed.
DNR estimates about 200 million barrels of liquid reserves at Point Thomson. Revenue said that because of the uncertainty of Sourdough and Yukon Gold development, estimated reserves from those fields have been reduced by 50 percent, “resulting in around 60 million barrels recoverable from each of these two fields.”
Liberty is forecast to begin production in 2005, and the U.S. Department of the Interior’s Minerals Management Service is preparing a final environmental impact statement for the BP Exploration (Alaska) Inc. project. But Revenue said that after the significant cost overruns it experienced at Northstar, BP “may be less likely” to proceed with development of the 180 million barrel Liberty field. It also said that Sandpiper, estimated to have 59 million barrels of oil recoverable, “might not be developed.”
Other possible new oil The National Petroleum Reserve-Alaska might see production before 2010, but Revenue said no ANWR production is included for this decade, because even if Congress agreed this winter to allow drilling, no production would be expected until after 2010.
Revenue said that the area in NPR-A encompassed by discoveries announced in May by Phillips Alaska Inc. and Anadarko Petroleum Corp. “is comparable to the area overlying the Alpine reservoir, with potential reserves in Alpine’s 429 million barrel neighborhood.”
And it is likely that NPR-A discoveries are just beginning: 40,000 bpd in fiscal 2007 are included in the current estimate, but Revenue said that if NPR-A yielded 600 million barrels (the Bureau of Land Management 1998 projection of economically recoverable reserves in NPR-A), rather than the 325 million barrels projected, an additional 37,000 bpd could be in production by 2010.
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