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
From first oil to first cargo, Alaska’s newest major oil development keeps gaining momentum.
Santos has loaded the first crude oil cargo from its Pikka Phase 1 development on Alaska’s North Slope.
The inaugural shipment - 450,000 barrels of Alaska crude - was loaded aboard the Polar Resolution at the Valdez Marine Terminal and is headed to refineries on the U.S. West Coast.
Pikka is currently producing approximately 23,000 barrels per day, with Santos working toward its Phase 1 target of ~80,000 barrels per day during the third quarter of 2026.
“When the Pikka Field was discovered, the Nanushuk formation was recognized as a new generation play in an established global super basin, and we are proud to be at the forefront of unlocking its resource potential,” said Santos Managing Director and Chief Executive Officer Kevin Gallagher.
Pikka is proof that Alaska still has world-class resources, and that keeping Alaska competitive can turn those resources into jobs, revenue and American energy.
PHOTO CREDIT: ConocoPhillips Alaska
Willow is officially more than halfway built.
ConocoPhillips Alaska has passed the halfway mark on construction of Willow, now projected to cost $9 billion due to rising inflation and supply chain costs.
Despite very harsh winter weather conditions in NPR-A, crews completed the season’s objectives, including critical roads, pads and bridges that will keep construction moving forward. Work is also progressing on the pipeline connection that will eventually move Willow oil through existing North Slope infrastructure to TAPS.
The scale is significant: approximately 2,000 people worked on Willow last winter, with another 2,000 expected when construction ramps up again next winter.
And ConocoPhillips is already looking beyond Willow. Four exploration wells were drilled nearby this winter as the company searches for additional resources that could one day utilize Willow’s processing infrastructure.
Willow remains on schedule for startup in early 2029, with expected peak production of ~180,000 barrels per day.
Billions invested. Thousands of jobs. New infrastructure. New exploration. And potentially 180,000 more barrels a day of American energy.
That’s a big investment in Alaska’s future.
PHOTO CREDIT: ConocoPhillips Alaska
Santos wasted no time before launching its search for a second string of pearls on Alaska’s North Slope.
Santos Ltd. subsidiary Oil Search has applied to the U.S. Army Corps of Engineers for permits to develop Quokka, a new discovery southeast of the Pikka field, which is now producing about 20,000 barrels/day. Quokka is the second of three nearby discoveries in the Nanushuk formation.
In its announcement of the Quokka appraisal well this spring, Santos estimates that recoverable reserves total 177 million barrels in a “Class 2C” estimate, or an estimate with a high degree of confidence. The resources tend to grow as drilling is done.
Its Quokka prospect will be similar in scope to Pikka, with two drill pads, an oil processing facility and field pipelines and a pipeline to connect Quokka with a connection to existing pipelines. Petroleum News reported the application in mid-July.
The Quokka-1 appraisal well, which was spudded on January 1, reached a total depth of 4,787 feet. Technical analysis has confirmed approximately144 feet of net oil pay within the Nanushuk formation. Following a single-stage stimulation, the well flowed at a rate of 2,190 barrels of oil per day.
Santos CEO Kevin Gallagher said results confirm Quokka as a significant addition to the company’s portfolio.
“The Quokka-1 results demonstrate the exceptional quality of the Nanushuk reservoir and confirm our geological assessment of this significant accumulation,” the CEO said.
“Located strategically to the east of our Pikka phase 1 development, Quokka represents another high-return opportunity that strengthens our position on the North Slope and extends our development runway in Alaska for years to come.”
The new Pikka field is maintaining an approximate 20,000 barrels per day of oil production as Santos prepares to bring new producing wells on-line. The wells have been drilled but operators are waiting for the start of seawater injection to maintain reservoir pressure. The company is on schedule to reach its phase one target of 80,000 barrels per day by the third quarter of 2026, Santos said. Pikka is owned 52% by Santos, who is the field operator, and 49% by Repsol.
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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