Aug. 21 (UPI) -- A market research report from consultant group IHS Markit found crude oil production from the late-stage Alaska North Slope could increase by 40 percent.
New drilling technology in the North Slope basin could drive production higher over the next eight years, the consultant group found. The ultimate recovery estimate is in the 54.8 billion barrel range, with 38 billion barrels of oil equivalent in remaining resources on top of the 16.8 billion barrels of oil already produced in the region.
Kareemah Mohamed, a research director and author of the report, said recent shallow-water discoveries in the North Slope shows it still has a long life ahead of it, despite its reputation as a maturing basin.
"This is why we refer to this basin as being in the late-emerging-phase, because it still has such significant resources to offer," she said in a statement emailed to UPI.
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Alaska, once a major producer, accounts for only a small fraction of total U.S. output. Total production from Alaska for the week ending Aug. 10 averaged 395,000 barrels of oil per day, about 8 percent lower than the same time last year.
Portions of a federal reserve area in Alaska were opened up to drillers through amendments inserted into last year's federal tax overhaul. A study from the U.S. Geological Survey found as much as 10.4 billion barrels of oil in the so-called 1002 Area of the Arctic National Wildlife Refuge could be considered commercial with oil priced at $30 per barrel. Brent crude oil, the global benchmark for the price of oil, was near $73 per barrel on Tuesday.
The Center for American Progress, a liberal-leaning group, said the push into the Arctic wilderness is reckless and perhaps non-commercial. Its analysis found oil and gas leases would generate about $37.5 million in federal revenue, "far short of the $1 billion to $1.8 billion that drilling proponents claim could be raised."
The IHS analysts said that for the North Slope, a reduction in operating costs and improved drilling efficiencies could bring renewed interest to Alaska.
"According to the IHS Markit analysis, despite the geologic potential of the North Slope, potential investment risks include needed service-sector expansion to support expected production growth, uncertainty over whether the state of Alaska will maintain its tax-incentive program, infrastructure access for new entrants, and the potential application of unconventional technology in a complex operating environment," Mohamed added.
