Citing recent oil discoveries and potential new drilling opportunities such as in the Arctic National Wildlife Refuge, a market research firm Tuesday called the North Slope a late-blooming "super basin" with potential for sharply increased oil production in coming years.
The Slope, once the dominant North American oil basin, has seen oil production drop well below its peak years in the 1980s, crushing state revenue when prices fall as they did in 2014.
But the region is "poised to re-emerge as a major source of U.S. energy production," IHS Markit said in a statement after producing a new analysis of the Slope's potential.
Not counting oil from ANWR, North Slope oil output could increase 40 percent in eight years as new fields are developed, including ConocoPhillips' Willow prospect, the firm said. That would add about 200,000 barrels of oil to Alaska's daily production, boosting levels that in recent years have exceeded 500,000 barrels.
Recent "large discoveries made in the shallow Nanushuk and Torok formations indicate this basin has a lot of room left to grow," said Kareemah Mohamed, lead author of the analysis.
"This is why we refer to this basin as being in the late-emerging phase, because it still has such significant resources to offer," Mohamed said.
IHS Markit declined to release the report, saying the study was available to companies that subscribe to its services. It said the North Slope meets its definition of a super basin, with multiple opportunities across different geological horizons.
People who track Alaska's oil industry responded cautiously to the report.
The additional oil is possible, said Larry Persily, a former deputy commissioner with the Alaska Department of Revenue.
"It just depends how much of an optimist you want to be and how much you believe in no delays in exploration and permitting, and having the tens of billions of dollars it costs to develop all those (fields)," he said.
IHS Markit notes the risk associated with investment in the Arctic oil fields, including the need for costly infrastructure in a complex operating environment, a contractor base that must grow to provide support, and uncertainty over Alaska taxes that have changed frequently for the oil industry.
IHS Markit says new production in the short term will come from companies that include ConocoPhillips and Oil Search, an owner of the large Pikka field.
Estimates indicate that newly discovered Pikka and ConocoPhillips' Willow, both on the western range of North Slope activity, could add 220,000 barrels of oil daily to production.
ExxonMobil, with the Point Thomson field where increased production has been proposed, could add to the total. Near-shore production could also come from Hilcorp, pursuing the Liberty project, and Eni's Nikaitchuq project, IHS Markit said.
Oil dreams have gone bust in Alaska before, Persily said. Shell spent billions of dollars to pursue exploration drilling in the Arctic Ocean north of Alaska, only to come up dry and abandon its effort in 2015. There won't be production in ANWR until at least 2030, if everything goes smoothly, he said.
David Houseknecht, project chief for the U.S. Geological Survey's Energy Resources Program for Alaska, said the analysis's overall figure that Alaska and offshore regions contain a huge amount of untapped, recoverable oil, at 38 billion barrels of oil equivalent (a unit of energy measuring oil and natural gas), is in line with federal estimates.
But Houseknecht said he would need to see the full report from IHS Markit — he's not a subscriber — to determine how it came up with a potential 40 percent increase in oil production within eight years.
"I want to see what the assumptions were going into that," he said.
Joe Marushack, ConocoPhillips Alaska president, recently told reporters that Alaska is seeing a "renaissance" of activity as companies pursue permitting for projects and eye new opportunities with updated technology.
The IHS report said more efficient operations, including ConocoPhillips' use of long-distance lateral wells to maximize oil production, have reduced North Slope costs. Regulators' efforts to speed up permitting, new infrastructure, and new opportunities in ANWR and the National Petroleum Reserve-Alaska add to the region's attractiveness, IHS Markit said.
IHS said the North Slope provides a viable alternative to competitive shale fields in the Lower 48, where prices per acre are greater. The company expects the North Slope to see new companies pursuing drilling in Alaska, as well as increased bidding activity and new partnerships to spread costs.