ANCHORAGE, Alaska, Dec 9 (Reuters) - Alaska North Slope oil production has slipped below 500,000 barrels per day and will decline further in coming years, squeezing the state's budget until new oil fields start operating, according to the latest forecast released by the state Department of Revenue.
Production in fiscal 2020, which started on July 1, is expected to average 492,100 bpd, down from the 496,900 bpd in fiscal 2019, sliding to 434,300 bpd in fiscal 2024, before rebounding as new developments come online, the forecast said.
"These developments are still contingent on final investment decisions and commitment of billions of dollars of new investments on the part of oil and gas producers, acting Alaska Revenue Commissioner Michael Barnhill said in a statement included in the forecast.
Production is now less than a quarter of the peak of more than 2 million bpd in 1988. In recent years, drilling in North Dakota and Rocky Mountain states like Colorado have surpassed Alaskan activity.
The picture is grim for the state treasury, which depends almost entirely on oil revenues and earnings from savings accounts. The state is forecast to have $487.9 million less in oil revenue in fiscal 2020 than in the prior fiscal year.
Im alarmed, said state Rep. Andy Josephson, an Anchorage Democrat. I think its going to be a tough 2020.
Alaska North Slope crude prices on the West Coast are expected to average $63.54 per barrel in fiscal 2020, down from the $69.46 average of the past fiscal year, according to the forecast. Activists within Alaska are seeking to change the states tax structure to increase returns to the treasury.
While the vast majority of North Slope oil development has been on state lands, the Trump administration is pushing to open more federal lands to drilling.
The administration last month released proposals to overturn Obama-era environmental protections and vastly expand development in a 23 million-acre (9.3 million-hectare) federal land unit on the western North Slope, the National Petroleum Reserve in Alaska, or NPR-A.
An NPR-A lease sale offering nearly 4 million acres will be held on Wednesday, part of the regular leasing process in place for 20 years.
The administration plans to hold the first-ever lease sale next year in the Arctic National Wildlife Refuge. The refuge has long been a sanctuary for caribou and other Arctic wildlife, but is also believed to hold large amounts of oil. (Reporting By David Gaffen Editing by Marguerita Choy)