Oil production from Alaska’s North Slope slid 6.5 percent in December from a year earlier as output from existing wells shrinks and isn’t matched by new additions.
Production averaged 582,150 barrels a day last month, down from 622,355 barrels in December 2011, the state tax division said on its website. Output was up from 581,938 barrels a day in November.
Oil output from Alaska’s North Slope has declined each year since 2002 as wells age and yield less crude, driving refineries on the U.S. West Coast to rely increasingly on imports from other countries and rail shipments from the U.S. Midwest. Flint Hills Resources LLC shut a crude unit at its North Pole refinery in Alaska in August, citing rising oil costs.
“In total, we’re not seeing enough new production to offset the natural declining rates of production from existing wells,” Ed King, petroleum economist for Alaska’s tax division in Anchorage, Alaska, said by telephone.
Inventories of the feedstock at the Valdez marine terminal, the northernmost ice-free port in North America, averaged 3.89 million barrels last month, ranging from a high of 4.8 million on Dec. 27 to a low of 3.14 million on Dec. 31, according to the tax division.
Alaska North Slope crude was unchanged at a premium of $17.60 a barrel to U.S. benchmark West Texas Intermediate at 4:13 p.m. New York time, according to data compiled by Bloomberg. The fuel’s premium more than doubled last year on shrinking supplies.
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