Breaking: ConocoPhillips to cut Alaska production dramatically - Must Read Alaska
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Friday, November 27, 2020
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Breaking: ConocoPhillips to cut Alaska production dramatically

CRUSHING NEWS FOR ALASKA’S ECONOMY

ConocoPhillips Alaska today announced it is planning to curtail oil production of approximately 100,000 barrels per day gross for the month of June from the Kuparuk River Unit and Western North Slope (Greater Mooses Tooth and Colville River Units).

That’s one fifth of the entire pipeline flow, approximately.

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, the company said in a statement. The curtailment is not expected to impact operations of the Trans-Alaska Pipeline.

This decision was made in response to extremely low oil prices resulting from global oil demand destruction caused by the impacts of the COVID-19 pandemic, combined with a global oversupply of oil.

The curtailment will essentially leave the oil stored in the reservoirs, available for resumption of production at a later date. The actions ConocoPhillips Alaska is taking with this production curtailment underscore the extraordinary challenges currently facing the oil and natural gas industry in Alaska and elsewhere.

During the first quarter of 2020, ConocoPhillips Alaska produced 218,000 net equivalent barrels per day within the state of Alaska.

On the bright side, if ConocoPhillips sold those barrels now, they’re nearly worthless. Alaska North Slope crude was selling for $10.67 a barrel as of three days ago. The break even point for a barrel of oil in Alaska is about $40.

But while it’s in the ground, it will get a higher price later. Alaska will get its royalty share out of it eventually, but not this year.

The company is posting losses for the first-quarter of $1.7 billion, or ($1.60) per share, compared with first-quarter 2019 earnings of $1.8 billion, or $1.60 per share.

The company also announced a quarterly dividend of 42 cents per share, payable June 1, 2020, to stockholders of record at the close of business on May 11, 2020.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Geissel and Edgemon, sticking fingers in ears, begin loudly repeating lalalalalalalalalalalala!
    What do you mean “we should stop spending”?

  • No surprise here. And the wacko Democrats who want higher oil taxes can now go buy super-size SUV gas guzzlers to haul around their fat-tire mountain bikes and their REI kayaks. Enjoy the great Alaska summer.

  • Good. There is too much oil already on the market.

    • Fool says get a grip when there is a global pandemic going on. Sheltered life?

    • Yea, that’s why little kids and teens are dying. They screwed up their bodies. Where you been? This isn’t just an old people killer, it never was.

  • Call it financial chemotherapy, maybe this is the only way to shrink our cancerous state government down to manageable size.
    .
    Sure it’ll be pitiful when cuddly, jobless nomenklatura bum money on streetcorners for plane fare outta town, but enough’s enough.
    .
    The bad news is we’re looking at C-P throttling back, support businesses closing, China-flu-hoaxed businesses folding, a 1980’s style exodus beginning, and the real-estate market collapsing, unable to support tax-addicted local governments.

    The good news is state government might just fold this time, if only because remaining productive Alaskans simply can’t be taxed enough to support their government officials in the style to which they’ve become entitled… and pay Alaska’s bills
    .
    … which means productive Alaskans might have a once-in-a-lifetime opportunity to rebuild their economy and their state government.
    .
    Shut ‘er down for now, ConocoPhillips, maybe we’ll have a business-friendly state ready for you and everybody else in the not-too-distant future.

    • Gotta love those multinational megacorporations and their ability to buy votes and politicians. Conservative values 250%. (Never look at what they actually contribute to).

      .

      What’s not to like about the Rockefellers and their lawyers cum senators for example?

  • This is the event we have been waiting for. Cut the government 60 to 70 % and privatize all that we can. Let the users pay their own way. Get rid of the union leeches and their parasite politicians. Conoco can keep the production down for a long time. By the way, the PFD should be out of bonds for the Juneau spendthrifts.

  • Alaska is already not making any money from it’s oil. What’s to lose? Shut it down until things are better.

  • Right. To stop the bleeding, cut off the blood supply.

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