ConocoPhillips and BP PLC, two of the major oil and gas players in Alaska, say they expect their capital investment in the state to be flat this year.
ConocoPhillips has at its disposal $900 million, or $170 million more than it spent in 2010. But spokeswoman Natalie Lowman told The Associated Press on Monday that spending the full amount is contingent upon several factors, including what it considers to be a more favorable tax structure in the state.
The company also would need to receive the permits necessary to proceed with a project that would connect a drill pad in the National Petroleum Reserve-Alaska to company facilities in the Alpine field. And, she said, ConocoPhillips itself would again have to sanction that project, which has been on the drawing board for years.
Considering all this, she said ConocoPhillips expects spending will be relatively flat.
Britain’s BP, which last year spent about $800 million for capital projects, expects comparable spending this year.
A spokesman for Irving, Texas-based Exxon Mobil Corp., another of Alaska’s major players, said the company did not break out investment by state in its latest filing with federal regulators.
Houston-based ConocoPhillips, in a filing with the Securities and Exchange Commission last week, reported plans to spend $3.3 billion on capital projects in the Lower 48 this year. That compares with $1.9 billion in 2010.
The company’s capital investment in Alaska declined from $1.4 billion in 2008 – the year after the current tax structure was passed – to $730 million in 2010.
Lowman said an increasing part of the capital budget is going toward maintenance, replacement and repair activities, though some of the money budgeted is also directed toward existing developments in the Prudhoe, Kuparuk and Alpine areas.
Lowman said the company also plans to continue gathering environmental data for possible offshore development in the Chukchi Sea.
The Legislature is weighing whether to cut oil production taxes as Gov. Sean Parnell has proposed. The Republican governor argues a change in the tax regime is needed to spur investment and increase now-declining oil production.
The companies have complained that the current tax eats away at their profits, affecting future development decisions. They have called Parnell’s plan a step in the right direction to making Alaska a more hospitable place to do business.
House Democrats, who consider the proposal little more than a corporate giveaway, say the plan could cost the state up to $2 billion a year in revenue. But Parnell has said lawmakers need to consider the long-term implications of the state doing nothing.
Oil currently provides nearly 90 percent of the state’s unrestricted revenue.