The first commercial oil production in Alaska occurred in southern Alaska in 1902, while offshore production began in 1965. As the state began to develop its oil and gas resources, it became classified into two distinct production regions: North Slope and South Slope. The North Slope, which is home to Prudhoe Bay, the largest conventional oil field in North America, has developed into the state’s primary oil and gas play. However, as a significant amount of Alaska’s land has been federally protected, owned, or managed for decades, extensive exploration and development has historically been stifled.
Early this year, President Trump signed Executive Order (EO) 14154 to ease regulations on oil and gas projects in Alaska, reversing the previous administration’s restrictions. Amongst other things, this order encourages exploration and production on federal lands and waters and advancing innovation to improve the energy and critical minerals industry. While the full impact of this order on oil and gas production is still uncertain, it does set Alaska up for potential growth despite years of stagnating production.
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Nearly all oil and gas production in the state occurs on the North Slope, as the above charts show. Since 2010, North Slope oil production has steadily declined from its peak at 0.64 MMb/d to 0.43 MMb/d at the end of 2024. North Slope gas production, on the other hand, has stayed mostly flat-to-slightly growing, reaching 10.3 Bcf/d at the end of 2024.
While there have been few significant oil and gas developments in Alaska recently, EO 14154 could change that moving forward. The rollback of federal land and water protections in conjunction with projects and discoveries already in the works by operators could open Alaska up for future growth. During 4Q24 earnings, ConocoPhillips, the largest oil producer and operator in Alaska, noted recent developments in the state, including a project that came online at the end of December 2024 and plans for future development in the region. Specifically, the Nuna project, which began construction in 2023, reached first oil ahead of schedule in December 2024 and has an expected peak oil rate of 20 Mb/d. ConocoPhillips also announced FID on the Willow project back in December 2023. This project is expected to produce approximately 600 million barrels across its lifetime. ConocoPhillips also noted additional fields in the development process along the North Slope that continue to move forward.
ConocoPhillips is not alone in their interest in Alaska. On March 17, APA Corporation and its partners, Lagniappe Alaska, LLC and Santos Limited, announced positive preliminary results of the Sockeye-2 exploratory well. Not only did they find better-than-expected porosity and permeability, but additional pay zones were also identified in the Staines Tongue formation. This comes after the success of their previous exploratory well, King Street-1. Santos is also the majority stakeholder in the Pikka Unit on the North Slope, which announced FID of the Pikka Phase 1 oil project in August 2022. This project is on track for first oil in 2026. At its peak, Pikka could produce up to 80 Mb/d from 45 wells. The production expected from these projects may be enough to flip Alaska oil production from a steady decline to a growth period.
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The positive exploration and ongoing development in Alaska’s North Slope in conjunction with EO 14154 is priming Alaska up for a potential upswing in both oil and gas production in the future. In a region that has not had YoY oil production growth since 2017 and a dearth of project development in recent years, a softening of the regulatory landscape and positive exploration and development may be just the right combo for production in the state to start growing again. Be sure to check back in with BTU Analytics, as we will continue to monitor project developments and other guidance related to production growth in The Last Frontier.
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