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
ConocoPhillips Alaska chalked up some BIG numbers in 2025.
The company incurred an estimated $1.3 billion in taxes and royalties last year, including $1 billion to the State of Alaska and nearly $300 million to the federal government. ConocoPhillips Alaska reported a net income of $730 million for the year.
"ConocoPhillips Alaska delivered another strong year in 2025 as we continued to advance our Alaska portfolio," stated Erec Isaacson, President of ConocoPhillips Alaska. “Progress continues on the Willow project, which will achieve nearly 50% completion during this winter season and remains on track for first oil in early 2029. More than 2,400 jobs were filled to progress Willow critical scope in 2025, which included the construction of two bridges, installation of 72 miles of pipeline, and beginning of year-round Willow camp occupancy.
“We also sanctioned our Coyote major project located in the Kuparuk River Unit, which will include a pad expansion, pipeline installation, and a 19-well drilling program.
"We have invested more than $3.6 billion in Alaska projects in 2025, demonstrating our confidence in Alaska’s resource base and the value of a stable and competitive fiscal regime," Isaacson stated.
Since 2007, ConocoPhillips Alaska has incurred approximately $47 billion in taxes and royalties to the State of Alaska and the federal government. Of that amount, about $37 billion went directly to the state. In that same period, ConocoPhillips Alaska’s earnings were approximately $29 billion, according to a company press release.
It’s been a good year to work on the North Slope.
According to new data from the federal government, December’s employment estimate was 323,900, up 1,500 from 322,400 in December 2024, with 51,400 of those jobs in oil and gas, construction and transportation – all fueled by North Slope activity.
Some highlights:
- Oil and gas jobs were estimated at 9,300, up from 8,700 in December 2024.
- Construction was 18,100 this past December, down slightly from 18,500 in December 2024.
- Retail was down in December, at 34,300 against 34,900 in December 2024.
- Transportation was 24,000 in December, up from 23,000 in December 2024.
Construction in 2026, led by oil and gas, will be level with 2025, according to a study commissioned by the Associated General Contractors Alaska (AGC) chapter. AGC releases its annual report in early spring. It is essentially a survey of opinions among contractors combined with information from other sources. McKinley Research Group compiles the reports.
The bottom line is that total construction spending appears level between 2025 and 2026 but with private sector contracting up and public sector work down, writes Tim Bradner in his latest issue of Alaska Economic Report. Total spending is estimated at $6.71 billion for the year, with $3.765 billion from private companies and $2.945 billion through federal, state and municipal agencies.
A few highlights:
- Oil & gas: $1.4 billion
- Airports/ports/rail: $900 million
- Utilities: $755 million
- Highways/roads: $690 million
- Residential: $430 million
- Health care: $280 million
- Mining: $190 million
The survey notes that oil and gas construction will decline with completion of the new Pikka field, but other projects will continue. ConocoPhillips, meanwhile, has 3,000 at work on its Willow project, now about 50% complete.
“For construction, the elephant in the room is of course the Alaska LNG Project. Glenfarne, the energy company that is now the state’s partner in this, feels it can get investors this year for a phase one of the project, the 42-inch pipeline from the North Slope to Southcentral Alaska that would serve Alaska markets,” Bradner writes. “The latest is that an investment approval for the pipeline could come in March. Phase two of the project is a large natural gas liquefaction plant planned at Nikiski, on the Kenai Peninsula. When the LNG plant is built the project can fully ramp up to serve export customers.
“But the project faces headwinds, so nothing is certain. Glenfarne has been busy this winter negotiating contracts with Alaska companies and contracts with suppliers for pipe and other materials. These can’t be finalized until the investors are secured and a Final Investment Decision is made. But if, and when, all that happens, having the contracts and procurement agreements, even if provisional for now, will save a lot of time.”
Tucked into the west side of the North Slope just a handful of miles from ANWR, a rig is preparing to drill a $180 million well at Point Thomson, a large gas and condensate field.
It is the first new well drilled at Point Thomson since 2016 and logistics are a major part of what makes it so expensive, operator Hilcorp said.
Doyon Drilling’s Rig 15, previously on Spy Island in the Nikaitchuq field, northwest of Kuparuk, was barged to the remote site, which is only accessible by air year-round, sea during the summer and a new, 60-mile ice road built this winter. The price tag: $40 million.
Point Thomson is now producing about 4,000 barrels per day of condensate, a volatile hydrocarbon liquid that condenses from "wet" natural gas as the pressure drops. Production has been way shy of its 10,000 barrels per day goal because of technical challenges in producing and injecting produced gas back into the high-pressure reservoir at the field, Tim Bradner writes in the latest edition of Alaska Resource Review.
The new well is expected to bring production to the target of 10,000 barrels/day when completed in the second half of 2026. The Point Thomson asset also includes a 22-mile pipeline that connects the field with the 25-mile Badami pipeline at the small Badami oil field at essentially the halfway point between Point Thomson and the Trans Alaska Pipeline System.
“Hilcorp’s acquisition of BP’s Alaska assets included its share of Point Thomson. ExxonMobil was previously the Point Thomson field operator but has passed that responsibility to Hilcorp, which is known for its ability to improve the value of producing assets through efficiency and investment,” Bradner writes.
Point Thomson has an estimated 8 trillion cubic feet of natural gas as well as several hundred million barrels of the liquid condensates now being produced.
The gas reserves at Point Thomson are a major part of the confirmed 35 trillion cubic feet of reserves on the North Slope that could support the proposed large Alaska LNG Project. Prudhoe Bay holds the remaining confirmed gas reserves on the Slope.
More here. online.flippingbook.com/view/696133712/18-19/
Photo credit to Exxon Mobil
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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