Oil production up, permitting down: industry on track for increased output.

• Author: Viray, Khristian
• Position: ALASKA TRENDS

Observers of the state economy may be aware that oil production in 2015 hit its lowest levels since the trans-Alaska oil pipeline went into service in the late 1970s. However, one welcome piece of information is that production in 2016 seems to be a slight reverse of the declining trend. According to the Alaska Department of Natural Resources Division of Oil and Gas, total production from January through July totaled nearly 105 million barrels, compared to about 102 million barrels for the same period in 2015. In other words, 2016 is on track to show the first year-on-year increase in output since 2002.

Another activity indicator watched by industry analysts is drilling permits. Although oil production was low last year, the Alaska Oil and Gas Conservation Commission approved a total of 230 permits to drill in 2015. These permits are categorized into three general proposed well classes: development, service, and exploratory.

Out of the 230 permits approved in 2015, 174 were development wells, 46 were service wells, and 10 were exploratory wells. As of July 2016, the Alaska Oil and Gas Conservation Commission had approved 92 permits, of which 58 were development wells, 27 were service wells, and 7 were exploratory wells. So far, the number of approved permits this year is down from the same time period last year. Compared to July 2015, 132 permits were already approved: 103...