State sees 3.8 percent oil production decline next year

Alaska North Slope oil production is expected to average 689,000 barrels per day this year, a decline of 3.8 percent from last year, state revenue forecasters said in a revenue forecast released in Juneau Dec. 9.

For 2010, the department anticipates further production declines to 665,000 barrels per day, the report said. The production decline from existing fields will be partially offset by production coming from new fields.

It is anticipated that Nikaitchuq, a new field being developed by Eni Oil and Gas, will begin producing oil in 2009, and Oooguruk, operated by Pioneer Alaska Inc., which began producing in 2008, will see increased production rates, the department said in a press release.

Continued development in the Colville River Unit, west of Prudhoe Bay, and ongoing exploration in the National Petroleum Reserve-Alaska and other areas of the state is also expected.

The state’s assessment on production is in contrast with more conservative views of producing companies. Doug Suttles, president of BP Exploration (Alaska) Inc., told an Alaska business group Nov. 19 that his company anticipates decline rates of 6 percent to 8 percent in the large producing fields of the North Slope, which provide the bulk of production.

Alaska Journal of Commerce