Alaska Government - North Slope Production Dropping Faster Than Expected - 12.5% YOY ( Crude + NGL) [View All]

Alaska North Slope oil and gas fields declined 12.5 percent in production of crude oil and natural gas liquids last year, according to an analysis by the state Department of Revenue.

North Slope average daily production in state fiscal year 2007 was 738,000 barrels per day, down from an average of 844,000 barrels per day in the previous year.

The drop in production is higher than estimates by both industry and the state. The state makes long-term production forecasts as part of its twice-yearly state revenue forecasts. Royalties and taxes from oil production pays for 85 percent of the state budget. Part of the decline was due to the Prudhoe Bay field's partial shutdown for several weeks in 2006 after BP experienced leaks in corroded pipes. The decline was also partly attributed to weather conditions at the Valdez Marine Terminal in November that impeded tanker loadings, the analysis shows.

But the data also shows a steepening of the natural decline of the large, older fields on the Slope, rates that exceeded estimates by the producers and the state. “Declining North Slope oil production is the most significant revenue issue facing the state today. That is why it is so important that we encourage new oil exploration and development of new production,” state revenue commissioner Patrick Galvin said.

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http://www.alaskajournal.com/stories/072207/hom_20070722008.shtml