BP, ExxonMobil and ConocoPhillips are planning to invest an additional $1bn in the next five years on the North Slope of Alaska, after being encouraged by Alaska’s new industrial oil tax policy, reports Polar Petroleum.
The new tax system has been prepared to abolish the structure of raised tax rates, which are contributing to higher oil prices.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The previous tax system in Alaska exceeded the 50% tax rate, when oil prices were high, making Alaska less attractive to energy companies.
BP plans to increase capital spending at Prudhoe Bay in Alaska by around 30%, which includes the addition of two new onshore rigs and will bring the company’s total fleet in the area to nine working rigs.
BP also secured support from other working interest (WI) owners, such as Exxon, ConocoPhillips and Chevron to evaluate around $3bn worth of new development projects in the Greater Prudhoe Bay area.
Exxon and ConocoPhillips hold 36% interest each in the field, while Chevron has 1% interest.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe new development opportunities being evaluated include expansion and debottlenecking of existing Prudhoe Bay facilities, constructing a new drilling pad and expansion of existing pads along with drilling of about 110 new wells.
The additional development projects are expected to be completed in about ten years.
ConocoPhillips plans to deploy a new drilling rig in the Kuparuk oil field to increase production in the existing wells.
BP Alaska president, Janet Weiss, said that the Alaska legislature and Governor Parnell have taken an important step by introducing the new tax law to improve Alaska’s long-term economic future.
Polar Petroleum president and CEO, Daniel Walker, said that the company’s Hemi Springs Project is located towards north of the Prudhoe Bay Unit, which has producing oil wells around one mile away from the unit.
"We’re also encouraged by the near-term and longer-term investment that is already being spurred by the new and welcomed industry friendly tax regime in Alaska," Walker added.
Image: BP plans to deploy two new onshore rigs at Prudhoe Bay field in Alaska. Photo: courtesy of Alan Murray-Rust.
