Oil giant says Alaska's North Slope is entering a 'renaissance' despite dipping prices
Major oil company ConocoPhillips issued its capital operating budget for 2019 on Monday, and in it, a lot of additional revenue will be funneled into Alaska for future developments in areas recognized last year.
In a presentation by Joe Marushack, president of ConocoPhillips Alaska, the North Slope was referred to as a "Renaissance" for the oil company.
That's partially due to the success they've already had with the Greater Mooses Tooth area in the well, GMT-1, which has already started producing returns back in October.
GMT-2, another well in the the area, is scheduled to begin construction this winter, and its not the only major infrastructure project planned for Alaska oil wells.
The neighbor to the GMT area, the Williow Discovery, will also finally see exploration and appraisal drilling this winter. These same steps were taken in the Mooses Tooth area last winter.
The capital expenditures budget of the company is set at $6.1 billion for next year. Of that sum, $1.2 billion is being allocated to Alaska. That marks about 20 percent of the company's overall purse for spending next year.
The figure comes as a spike for the state, which by comparison last year, only saw $0.9 billion for development.
The reason behind the increase, and the framing of Alaska's North Slope as being a new Renaissance of oil, connects back to GMT-2 and Willow, according to the company.
In short, they're betting on the success of the previous well, in addition to the promising appraisals done so far, to help lift Alaska exploration into profits, despite recently dipping oil prices.
According to a report issued last month, GMT-1 oil would peak at 30,000 barrels per day, and GMT-2 would peak at 40,000 sometime in late 2021. In 2024 or 2025, Willow could bring 100,000 barrels per day.
It's this kind of production spike that has ConocoPhillips leadership equating the growth to a new Renaissance, and the same sentiments are driving millions of dollars more into the state.