09 April 2014, News Wires – Alaska’s North Slope oil production is forecast to decline 1.8% for the fiscal year ending 30 June instead of falling 3% as predicted in December, according to a report released this week.
The Alaska Department of Revenue predicts production of 521,800 barrels a day versus its December forecast of 508,200 bpd. By 2023, North Slope production will fall to 315,000 bpd, Reuters reported.
The annual spring report comes four months after the state began cutting oil production taxes with hopes of spurring new investment and stemming the decline. Alaska gets more than 80% of its state tax revenue from oil production.
North Slope production comes largely from leaseholders BP, ConocoPhillips and ExxonMobil, and has been in a steady decline. More than 20 years ago, nearly 2 million barrels a day flowed through the 1300-kilometre trans-Alaska pipeline system.
Last fiscal year, production fell 8.2%, according to another state report.
“That is a significant shallowing of the production decline if you ask me,” Reuters quoted State House Representative Eric Feige, a Republican who supported the tax cut, as saying.
“I expect as we start to drill more wells, bring in more drill rigs, and advance some of these new techniques, we are going to continue to exceed forecasts.”
Democrats had fought against reducing taxes on oil production and this summer voters will decide at the polls whether to repeal the tax break.
“I don’t see how you can call this anything but a success,” Reuters quoted Deputy Revenue Commissioner Bruce Tangeman as saying. “This is just the beginning.”
The news agency also quoted Democratic State Senator Bill Wielechowski as saying that no one should be swayed by the near-term outlook.
“The governor has been saying his goal was to get 1 million barrels through the pipeline, and it’s vital that we give tax breaks to the oil industry,” he said. “Well, now we’re heading to 315,000 barrels. That’s a total failure.”