North Slope Oil Producers Appeal to Legislative Committee to Pass Governor's Tax Cut Bill

Companies promised a robust program if the legislature approved the bill

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By Bill McAllister
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Story Created: Apr 25, 2012 at 9:43 PM AKDT

Story Updated: Apr 25, 2012 at 9:47 PM AKDT

ALASKA - Executives of the North Slope oil producers appealed to a legislative committee to pass Governor Parnell’s tax cut bill Wednesday.

They said their investment behavior won't change without it.

With the bipartisan majority in the Senate declaring Parnell’s oil tax bill dead on arrival there, executives from ConocoPhillips and BP went before a house committee in an attempt to keep it on the front burner.

"There is no other place on the planet where we have more resources than we do in Alaska with the exception of Russia," said Damian Bilbao of BP. "So this is not a question of opportunity and resources; this is a question of investment attractiveness."

The producers in particularly dislikes the progressive feature in the tax that accelerates the state's take at high prices.

“That next dollar, at $110 a barrel, the state and federal governments can take about 86 cents,"
said Scott Jepsen of ConocoPhillips.

The companies promised a robust program if the legislature approved the governor's bill.

"If nothing passes or nothing similar to that is the inverse of these statements true? Does it mean you will not increase drilling, you'll not pursue satellite development, you won't work to develop major projects with your partners or pursue other projects?" asked Representative Berta Gardner.

Jepsen was quick to respond. “Representative Gardner, through the chair, if things stay the same you should expect to see the same focus that we see right now. We are still drilling, we still are shooting seismic, we are still looking at additional opportunities out there. But the real difference is, how fast are we going to do those? What time frame do they come on-stream?”

And as long as returns on investment look better elsewhere, Bilbao said, "Then the investment will not come to Alaska at the same velocity that it will to other regions and you will not see growth as a result."

The message seems to be: Don't say we didn't warn you.
 

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Anonymous said on Wednesday, Apr 25 at 10:09 PM

Did you hear what the producers THREATENED??? If they DON'T get the tax cut, they won't invest THAT much in Alaska...they never did to begin with... Glad to see those elected standing up to the oil industry and taking their State of Alaska back!!!

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Wes said on Thursday, Apr 26 at 7:56 AM

We need to move past this; It's a loser. Natural gas prices are now depressed, thus a gasline is doubtful. The good news is that the gas is stored in empty wells. Given the history of the oil bullies, it is no surprise that they are finally being called on their past practices. The refusal of Exxon to pay the judgement in state court is just one indicator of the way they feel about Alaska and Alaskans.

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Anonymous said on Thursday, Apr 26 at 4:04 PM

run Parnell run...see Parnell run into fun I mean feds...haha...paybacks are a bleeeppp....

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