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

[hatrack]

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.

EDIT

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

[NickB79]

1. The oil industry is starting to sound like a broken record

kick

[phantom power]

2. It's going to be fun, yet awkward, watching Patrick do his pagan oil-revenue dance.

Alaska is in the same situation as Mexico, fiscally speaking. Worse, I suppose, since Mexico only gets 40% of its revenue from its collapsing oil fields.

[hogwyld]

3. This is a good news/bad news scenario

Once the oil is finally gone, we can get back to carbon neutral lifestyles that will benefit the planet. The bad news is that without oil, the planet will only be able to sustain about 1/3 of it's current population...

[GliderGuider]

4. "That is why it is so important that we encourage new oil exploration..."

Yeah, that's the ticket. Look how much it has helped the Lower 48 since 1971...

The front wheels of Thelma and Louise's Thunderbird are in the air. If they can only keep pushing the gas pedal hard enough, I'm sure they'll make it.