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June 2015

Vol. 20, No. 23 Week of June 07, 2015

May ANS production down 8% on proration

Decline from April drops North Slope production to less than 500,000 bpd; April Cook Inlet tops 19,000-barrel-per-day mark, up 4%

Kristen Nelson

Petroleum News

Alaska North Slope production for May averaged 497,673 barrels per day, down 8.2 percent from an April average of 542,154 bpd. The drop came after a significant production dip in the early part of May, when Alyeska Pipeline Service Co., faced with tight storage at its Valdez Marine Terminal, asked producers to prorate ANS output.

North Slope output was 550,421 barrels May 1, but that dropped to 460,848 May 7, and bottomed at 355,633 May 9. Inventories at Valdez, which began the month at 4.7 million barrels, climbed to more than 5 million barrels, topping out at 5.7 million barrels May 9. Inventories were more than 5 million barrels 14 days in May, compared to four days in April.

Alyeska Pipeline Service Co. spokeswoman Michelle Egan told Petroleum News that tight storage capacity at Valdez, combined with challenging tanker scheduling, led to the cutback in throughput on the pipeline. She also said one of the storage tanks at the terminal was on a planned service outage.

Egan said proration began May 6 and ended May 17. Tank 3 was taken out of service May 1, she said in a June 2 email, and remains out of service for routine maintenance. “Tanker issues relate to the schedule of tankers into Valdez and how much each can load,” she said.

Prudhoe Bay

The largest month-over-month barrel reduction was at the BP Exploration (Alaska)-operated Prudhoe Bay field, the North Slope’s largest, which averaged 284,034 bpd in May, down 32,429 bpd, a 10.25 percent drop, from April production averaging 316,463 bpd. Prudhoe produced 318,187 barrels May 1, bottomed at 207,423 barrels May 10, didn’t break the 300,000-barrel mark until May 26 and ended the month at 302,595 barrels.

Prudhoe includes satellite production from Aurora, Borealis, Midnight Sun, Orion, Polaris, Sag River, Schrader Bluff and Ugnu, as well as production from the Hilcorp Alaska-operated Milne Point and Northstar fields.

Information for May comes from the Alaska Department of Revenue’s Tax Division which reports North Slope oil production consolidated by major production centers and provides daily production and monthly averages. More detailed data, including Cook Inlet and individual North Slope fields and pools, is reported by the Alaska Oil and Gas Conservation Commission on a month-delay basis.

AOGCC data for April show Milne Point averaged 19,565 bpd, up 5.81 percent from a March average of 18,491 bpd, while Northstar averaged 6,866 bpd, down 40.75 percent from a March average of 11,588 bpd. AOGCC said the drop in April Northstar volumes reflects a difference in what is being reported.

Prior to April, oil volumes included natural gas liquids. Beginning with April, NGLs were reported separately. April NGL volumes for Northstar were 134,209 barrels. When that is added to the oil, the volume is 11,339 bpd, a month-to month drop of 2.15 percent or 249 barrels. Future Northstar reporting will be based on the oil only volumes.

Kuparuk River

The ConocoPhillips Alaska-operated Kuparuk River field, second largest on the North Slope, averaged 137,959 bpd in May, down 3.62 percent, 5,186 bpd, from an April average of 143,145 bpd. Like Prudhoe Bay, Kuparuk had a mid-month dip in production, starting the month at 148,632 barrels, dropping to a low of 92,491 barrels May 9, and ending the month at 143,168 barrels. Unlike Prudhoe, Kuparuk had a mid-month peak, producing 187,238 barrels May 19, gradually dropping back into the 140,000-barrel range by May 26.

Kuparuk production includes satellites at Meltwater, Northeast West Sak, Tabasco, Tarn and West Sak, as well as the Eni-operated Nikaitchuq field and the Caelus Alaska-operated Oooguruk field.

AOGCC data show Nikaitchuq averaged 24,151 bpd in April, down 4.68 percent from a March average of 25,336 bpd, while Oooguruk averaged 15,566 bpd in April, up 45.79 percent from a March average of 10,677 bpd. Combined, the fields accounted for 27.74 percent of the volumes shown for Kuparuk in April.

Alpine, Lisburne, Endicott

The ConocoPhillips-operated Alpine field averaged 46,575 bpd in May, down 4.13 percent, 2,007 bpd, from an April average of 48,582 bpd. Alpine includes satellite production from Fiord, Nanuq and Qannik. AOGCC data from April shows Alpine averaging some 65 percent of the reported production, followed by Fiord at 28 percent and Nanuq and Qannik at less than 4 percent each.

Alpine started May at 48,326 barrels, dropped to 31,533 barrels May 9 and ended the month at 51,802 barrels.

The BP-operated Lisburne field, part of Greater Prudhoe Bay, averaged 21,844 bpd in May, down 10.22 percent, 2,486 bpd, from an April average of 24,330 bpd. Lisburne started the month at 25,803 barrels, dropped to 16,214 barrels May 9, then, after rebounding, dropped to 9,813 barrels May 17, but went back to more than 23,000 barrels the following day, ending the month at 24,002 barrels. BP spokeswoman Dawn Patience told Petroleum News in an email that the mid-May drop was due to planned maintenance.

Lisburne includes production from Niakuk, Point McIntyre and Raven.

The Hilcorp Alaska-operated Endicott field averaged 7,261 bpd in May, down 24.63 percent, 2,373 bpd, from an April average of 9,634 bpd. Reflecting proration, production dropped from 9,473 barrels May 1 to 6,067 barrels May 9, reaching 8,400 barrels May 17 before dropping to 568 barrels May 18 and going to zero May 19-21.

Hilcorp spokeswoman Lori Nelson told Petroleum News in an email that this was due to flooding issues on the Slope. She said Hilcorp shut-in production temporarily due to water surrounding areas of the Endicott Sales Line.

Endicott volumes include Eider, Minke, Sag Delta and the Savant Alaska-operated Badami field on the eastern North Slope. AOGCC data for April shows Badami averaged 939 bpd in that month, down 1.5 percent from a March average of 954 bpd.

Cook Inlet tops 19,000 bpd

AOGCC data show Cook Inlet production averaged 19,080 bpd in April, up 4.31 percent from a March average of 18,292. Cook Inlet production has been climbing since Hilcorp Alaska acquired Chevron and Marathon assets in the area in July 2011 and April 2012. In late 2011 and early 2012, Cook Inlet production averaged some 10-11,000 bpd.

It has been growing since the arrival of Hilcorp, but this is the first time since those acquisitions that Cook Inlet production has topped 19,000 bpd.

There are eight oil-producing fields in Cook Inlet and Hilcorp operates five, including the largest and the smallest: Beaver Creek, the smallest, averaged 118 bpd in April, down 1 percent from March; McArthur River, the largest, averaged 6,057 bpd in April, up 9.8 percent from March.

Hilcorp’s Trading Bay field, Cook Inlet’s second largest, had the largest month-over-month increase, averaging 3,392 bpd in April, up 15.3 percent from March.

Granite Point and Swanson River, Hilcorp’s other two Cook Inlet fields, averaged 2,573 bpd, down 4 percent, and 2,554 bpd, down 5 percent, respectively.

ExxonMobil subsidiary XTO operates the next largest field, Middle Ground Shoal. It averaged 2,005 bpd in April, up 1.5 percent from March.

Cook Inlet Energy operates two fields, both showing month-over-month production increases. Redoubt Shoal averaged 1,087 bpd in April, up 2.8 percent from March, while West McArthur River averaged 1,295 bpd, up 1.4 percent from March.

ANS crude oil production peaked in 1988 at 2.1 million bpd; Cook Inlet crude oil production peaked in 1970 at more than 227,000 bpd.






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