The Alaska Department of Revenue expects North Slope oil production to rise sharply over the next two years, though the price that oil fetches remains an open question.
The department’s spring forecast, released this week, projects production averaging 459,200 barrels per day in fiscal year 2026, climbing to 518,500 barrels per day in fiscal 2027. Longer term, the state expects output to pass 600,000 barrels per day by fiscal 2032 and 650,000 by fiscal 2034.
The increase rests largely on Pikka, the Santos-operated field on the western North Slope where first production is expected this spring. It is the largest new oil development in Alaska in decades. Willow, ConocoPhillips’ project in the National Petroleum Reserve-Alaska, is expected to begin producing in fiscal 2029 and to reach up to 180,000 barrels per day at peak. Smaller developments and continued drilling in existing fields account for the rest.
Prices are the harder variable. The forecast assumes Alaska North Slope crude averaging $75.26 per barrel for fiscal 2026, a figure that blends an actual average of $67.34 over the fiscal year’s first eight months with a higher projection for the remainder. The department noted the forecast comes during a period of high uncertainty tied to the conflict in Iran and related disruptions to oil markets.
More production does not translate directly into more state money. The Revenue Department estimated last year that Willow will net the state treasury $2.6 billion between 2029 and 2053, half what a 2024 analysis predicted, and confirmed that tax credits applied against the project exceed the revenue it generates. Rising project costs are part of the reason. ConocoPhillips has put Willow’s total cost at $8.5 billion to $9 billion.
North Slope communities have their own stake. Because Willow sits on federal land, royalties are split between the federal government and a fund for North Slope communities. The state estimates those communities and the borough will share $3.1 billion over 27 years, with the North Slope Borough collecting an additional $1.2 billion in local property taxes.
