Regulatory and fiscal stability herald bright future for investment in Alaska
There is a renaissance underway on the North Slope driven primarily by two huge projects – Santos’ and Eni’s Pikka development and ConocoPhillips’ Willow. Together, these two, new oil fields will increase production to levels not seen in in two decades.
Despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and fluctuating oil prices –Alaska can expect $22 billion in planned oil and gas industry investment between 2025 and 2030, according to a petroleum economics study by Anchorage-based McKinley Research.
“By 2034, more than 60% of North Slope production will come from fields that, today, have yet to put a single drop into the Trans Alaska Pipeline System,” the study found.
We cannot control many of the challenges Arctic operations bring, but we can maintain fair and stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
Let’s keep Alaska competitive!
What’s at stake
$4B
State & Local Revenue
FY25
70,425
Alaskan Jobs Supported
Direct/Indirect
$0.5B
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$5.8B
Spending with Local Businesses
Annual
Source: McKinley Research for AOGA
Stable tax policy leads to resource renaissance on the North Slope
Hilcorp continues to grow its presence in Alaska.
The company told legislators that it has increased its employees in Alaska by 18% since 2021 to 1,750 and its contractor workforce by 41% to about 3,500 over the same period.
The company, which is one of the largest privately owned oil and natural gas producers in the United States, first came to Alaska in 2011, purchasing assets from Chevron and XTO Energy and becoming the dominant oil and gas producer in Cook Inlet.
It significantly expanded its Alaska footprint when it moved to the North Slope, becoming a dominant operator by acquiring major assets from BP ($5.6 billion, completed 2020) and Eni (2024), including the massive Prudhoe Bay field.
It also operates in Alabama, Colorado, Louisiana, New Mexico, Ohio, Pennsylvania, Texas and Wyoming.
Photo credit to Hilcorp Alaska.
As Santos gets ready to switch on its new Pikka field, it’s keeping a watchful eye on proposed changes to the state’s oil and gas tax, writes Tim Bradner in his latest Alaska Economic Report.
“New investment decisions may come later this year, mainly on proceeding to phase two at Pikka. However, the company is warily watching proposals for oil and gas tax changes now pending in the state Legislature,” he says. Santos plans to reach 80,000 barrels per day by mid-year, its phase one peak plateau.
Santos believes there are more Pikka-level fields on leases it owns at Quokka, south of Pikka, and in the Horseshoe Unit, located in the National Petroleum Reserve–Alaska. The company holds over 1 million acres of leases in NPR-A, including Horseshoe and acreage near the Teshekpuk Lake Special Area.
Meanwhile, the company is now drilling a new exploration well at Quokka, south of Pikka, where a discovery was made in 2020.
The results of the National Petroleum Reserve-Alaska (NPR-A) lease sale were not only fantastic, but reaffirmed Alaska’s role as a major oil provenance with a long and bright future.
As new Alaska player Epoch’s Alex Cranberg put it, “We participated in this lease sale because we believe the National Petroleum Reserve-Alaska represents the most significant remaining untapped conventional resource in North America. As shale plays mature, Alaska’s resource base will play an increasingly important role in sustaining U.S. energy supplies.”
At $3,649,920, Epoch Oil and Gas LLC, submitted the highest bid for tract L-223, and the highest bid amount per acre, $1,112.15, for tract L-205.
North Slope Exploration, a Bill Armstrong company, was the most aggressive bidder in terms of the number of bids, submitting bids on 118 tracts, 27% of the 430 bids received in the sale, and the dominant bidder in the most westerly lower potential area, taking 28 of the 32 tracts receiving bids in that area of the sale, according to Petroleum News.
“I feel great!!! We’re a little bit bummed that we didn’t win everything we were after. We bid on 1 million acres and won 600 thousand. We were out bid by Shell/Repsol on some good tracts, but we leased some awesome ideas. I am certain we will be able to work with them … It is good to have lots of major activity back in Alaska,” Armstrong, who is the state’s most successful explorer for overlooked oil fields, told Petroleum News.
It was great to see the return of a couple of major oil companies which have been relatively dormant in recent years or had pulled out of the state.
The largest dollar amount in high bids was by Repsol E&P USA LLC and Shell Frontier Oil & Gas LLC. That bidding group is 70% Shell and 30% Repsol. Repsol will be the operator. The Repsol/Shell bidding group took almost 232,500 acres, 17.4% of the acreage, with bids totaling more than $93 million, 57% of the high bids. Repsol is a partner in extensive North Slope acreage, including the Pikka unit which is scheduled to begin production later in March.
“Shell confirms participation in the March 18, 2026, National Petroleum Reserve-Alaska lease sale, bidding jointly with Repsol on 65 onshore blocks,” a Shell spokesperson told Petroleum News. “We are the apparent high bidders on 42 blocks, valued at approximately $93 million, with Repsol serving as operator for any jointly acquired leases. This opportunity in an established onshore area strengthens Shell’s U.S. portfolio and aligns with our strategy to explore future development in an established basin.”
ExxonMobil Alaska had high bids of $7.3 million on 23 tracts, 4.5% of the total high bids, on some 9.9% of the sale acreage One of the original North Slope investors and a one-third owner of Prudhoe Bay, ExxonMobil has been relatively passive in recent years, especially after turning the operatorship at Point Thomson over to Hilcorp.
The other big bidder was ConocoPhillips Alaska, the dominant producer on the west side of the North Slope and the only current NPR-A producer. The company had some $21.6 million in successful bids totaling 116,117 acres, 13.2% of the successful bids.
March 18 was a historic day that bodes well for Alaska’s future. The sale attracted bids from 11 companies, including returning partners Shell and ExxonMobil, and brought in a stunning $163 million, shattering the previous record set in 1999. This signals big things are in the works for further developing the NPR-A.
“The takeaway from this historic event is clear: when federal policy aligns with Alaska’s strengths and provides access and certainty, investment follows — in this case, lots of it. We now look to the legislature and implore our policymakers to maintain stability and competitiveness, so these investments translate into jobs, economic growth, and increased state revenue. Together, we can grow the pie,” according to the Alaska Chamber.
Photo credit: Bureau of Land Management
Letter from the co-chairs
Fair and Competitive oil taxes are working
There is a resurgence in oil production and jobs in Alaska that is directly related to our current oil tax policy. SB 21, a fair and competitive tax policy, replaced the antiquated ACES tax structure that drove down petroleum investment for more than a decade. Thanks to SB 21, Alaskans have the greatest opportunity of our generation on the North Slope today.
Some present and former legislators argue that SB 21 was a mistake, but the facts speak for themselves.
The Willow and Pikka projects, years in the making, are in active development, with Pikka now expecting first production any day now. These and other robust investments in Alaska’s future would not have occurred under the previous punitive tax regime. Between the Willow and Pikka projects alone, the oil and gas industry is spending over $10 billion in Alaska, with each project generating thousands of construction jobs and hundreds of operating jobs.
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