October 22, 2020

First production from large discoveries at Alaska’s North Slope is delayed due to lack of related infrastructure, says GlobalData

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Since 2015 a few major oil discoveries were announced on the basin that together could add at their peak approximately 450 thousand barrels per day (mbd) to the Trans Alaska Pipeline System (TAPS), says GlobalData, a leading data and analytics company. These include , Horseshoe, Pikka, Willow and Liberty oil discoveries.

In the short term, boosting the volume of oil transported through the TAPS depends greatly on the fields located within the National Petroleum Reserve-Alaska (NPR-A). Currently, around 544 thousand barrels of oil flows daily through the TAPS. Recent discoveries once developed could add up to 200 mbd in a half decade, increasing oil sales and state revenue. However, the coming online of these discoveries is contingent to the construction of infrastructures such as roads, drilling pads, gathering pipelines and processing plants.

Gregory Bosunga, Oil & Gas Analyst at GlobalData, comments: “Though Pikka and Willow discoveries are economically viable, with access to roads that could reduce development costs, their true oil potential will not be known without further appraisal drilling.”

Smith Bay will continue with more appraisals during the 2018 winter drilling season. The project will require a large capital investment; the early estimate is $10bn to US$15bn development costs. A big part of that cost is drilling, according to Caelus the project is expected to require four pads and some 400 wells.

Bosung adds: “By comparison, ConocoPhillips has drilled some 200 wells from five pads at the onshore and better located unit for over US$1bn. Processing facilities would also add to the cost, including transportation costs estimated at US$2bn for a road to the Colville River unit and US$800m for a pipeline to move the hydrocarbons across the coastline.”

Analysts available for comment. Please contact the GlobalData Press Office:

EMEA & Americas: +44 (0)207 832 4399
Asia-Pacific: +91 40 6616 6809

Email: [email protected]

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About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, technology, energy, financial and professional services sectors.

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