ANCHORAGE, Alaska (Reuters) - The aged oil basin on Alaska’s North Slope, the site of the United States’ largest oilfields, will see production decline but at a slower rate over future decades, state officials said on Tuesday.
Since North Slope production hit its peak of slightly over 2 million barrels per day in 1988, it has declined by an average annual rate of 4.9 percent, to an average 693,000 barrels per day in fiscal 2009, state petroleum economist Jennifer Duval told lawmakers at a hearing in the state capitol in Juneau.
That decline will abate through 2030, Duval said.
“We’re forecasting, going forward ... the decline rate to flatten out to about 3.6 percent per year on average,” Duval told the state Senate Finance Committee, which is conducting a series of hearings to evaluate Alaska’s oil-producing future.
The long-term forecast is based on anticipated production over the next four decades, she said.
“Through the fiscal year 2050, we expect to recover an additional 5.3 billion barrels of oil,” Duval said.
That does not include potential offshore oil production from the federally managed outer continental shelf, oil from the Arctic National Wildlife Refuge or most of the estimated 20 billion to 35 billion barrels of in-place heavy oil considered uneconomical with current recovery technology, Duval said.
For the current fiscal year, which ends June 30, the state Department of Revenue has forecasted an average production rate of 659,000 bpd.
Though new development cannot fully offset the declines at the aging Prudhoe Bay and Kuparuk fields, small independent companies flocking to the North Slope offer promise, said Kevin Banks, director of the state Division of Oil and Gas.
Banks cited efforts by Denver-based Savant Resources to revive an oil field, Badami, where BP Plc BP.L halted production in 2007 because of poor performance.
Future production from federal territory on the North Slope is clouded by regulatory and environmental complications, Banks told lawmakers.
He cited the February 5 decision by the U.S. Army Corps of Engineers to deny a key permit to ConocoPhillips COP.N and partner Anadarko Petroleum Corp APC.N for what was planned to be the first producing oil field in the National Petroleum Reserve-Alaska, a federally managed land unit on the western North Slope.
Editing by Bill Rigby and Marguerita Choy
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