16 ALASKA RESOURCE REVIEW WINTER 2025 State: Fewer wells drilled last year; new projects set to boost production BY TIM BRADNER ALASKA OFFICIALS TOLD STATE LEGISLATORS IN JANUARY THAT PRODUCING FIELD OPERATORS ON THE NORTH SLOPE ARE FACING RISING COSTS AND INCREASED LOCAL COMPETITION FOR CONTRACTORS AND EQUIPMENT DUE TO NEW FIELDS IN CONSTRUCTION. The new fields are Pikka, being built by Australia-based Santos Ltd. and Repsol, based in Madrid, as well as the new Willow field by ConocoPhillips. Deputy Natural Resources Commissioner John Crowther told the House Finance Committee that producing field operators drilled fewer new production wells last year than they had forecast partly due to demands on equipment and labor. This is contributing to a dip in expected production in 2025. However, field output is expected to gradually increase beginning in 2026 as new projects in construction begin producing. Travis Peltier, petroleum reservoir engineer in the state Division of Oil and Gas, told legislators in the briefing that the large legacy fields on the North Slope are experiencing 4% to 5% annual declines but maintaining that against the steeper natural decline in aging reservoirs requires substantial investment in new drilling and well work by operating companies. But sustaining that production is a challenge given the competition for equipment. Attracting skilled workers to remote jobs in northern Alaska is another a challenge. Santos and ConocoPhillips both said they expect to employ 2,000 workers this winter on the North Slope. Wages for construction and oil services workers are rising as a result. Crowther said average production from existing fields is estimated at 480,000 barrels per day in 2025, which is up from actual production of 461,000 barrels per day in 2024 thanks to incremental additions in fields by operators. However, the state’s estimates, which are based on information from field operators as well as analysis by state petroleum engineers, have been running about 2% higher than actual production. Estimates by the field operators, which are provided to the state, also are higher than actual production. Among the producing fields, Hilcorp Energy has been successful in adding new production in its Milne Point field with new wells and two new production pads, Peltier said. Milne Point is now averaging about 47,500 barrels per day and is expected to soon reach 50,000 barrels per day. All other producing fields are experiencing 4% to 5% annual declines, Peltier said. The state Division of Oil and Gas is now forecasting an increase from 480,000 barrels per day in 2025 to an average of 500,000 barrels per day in 2028 and 530,000 by 2030, a result of new output from the Pikka field scheduled to begin production in 2026. Production is expected to reach 650,000 barrels per day by 2034 following startup in 2029 of ConocoPhillips’ Willow project, which is also now in construction. However, the picture isn’t as pretty for Cook Inlet, in Southcentral Alaska, where aging 60-year old oil fields are declining in output. Production averaged 15,000 barrels per day in 2018 but had dropped to 8,500 barrels per day in 2024, Peltier said. The Cook Inlet Basin was Alaska’s first petroleum-producing region with onshore production beginning in 1958 and offshore production in 1965. In its 1970s heyday, Cook Inlet produced 200,000 barrels per day of crude oil. Crowther said Cook Inlet is overshadowed by the North Slope but its production of light, sweet crude oil is important to the nearby Marathon Petroleum Co. refinery on the Kenai Peninsula, which supplies most of Alaska’s gasoline and a good portion of jet fuel demand at Anchorage’s international airport, which is one of the world’s busiest air cargo hubs. As Cook Inlet production declines, Marathon is having to bring in crude oil from other places including North Slope oil shipped by shuttle-tanker from Valdez, terminus of the Trans Alaska Pipeline System. NORTH SLOPE OIL OUTPUT TO RISE IN NEAR FUTURE Deputy Natural Resources Commissioner John Crowther told the House Finance Committee that producing field operators drilled fewer new production wells last year than they had forecast partly due to demands on equipment and labor. This is contributing to a dip in expected production in 2025. However, field output is expected to gradually increase beginning in 2026 as new projects in construction begin producing.
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