ConocoPhillips Alaska will curtail oil production of approximately 100,000 barrels a day gross for the month of June from its Kuparuk River Unit and Western North Slope (Greater Mooses Tooth and Colville River units), the company announced Thursday, April 30.
Company officials said the ramp-down to reduce production will begin in late May and is part of broader curtailments in the Lower 48 and other areas. Any extensions of the curtailment beyond June will be determined on a month-to-month basis, officials said.
The decision does not include any layoffs, said Natalie Lowman, media spokesperson for ConocoPhillips Alaska.
“We continue to monitor the market situation, but at this time, based on our current outlook, we chose to maintain organization capacity so we can resume programs in the future,” she said.
Alyeska’s chief communications officer, Michelle Egan, said that the company will be making adjustments because of the reduced throughput, but can operate safely and reliably at that level.
“It does not create an operations problem,” she said.
The company said its decision was based on unacceptably low oil prices resulting from global oil demand destruction due to impacts of the COVID-19 pandemic, combined with a global oversupply of oil. The curtailment will essentially leave the oil stored in reservoirs, available for resumption of production at a later date.
The decision to curtail production underscores the extraordinary challenges currently facing the oil and natural gas industry in Alaska and elsewhere, company officials said.
For the first quarter of 2020, ConocoPhillips Alaska produced 218,000 net equivalent barrels a day within the state.
State Department of Revenue data shows that North Slope oil producers pumped an average of 500,000 barrels of oil a day into the pipeline in April.
Alyeska operates the pipeline on behalf of owners British Petroleum, ExxonMobil and ConocoPhillips.
