Alaska's oil companies are back in the Capitol and pushing for lower taxes; but they're not guaranteeing lawmakers they'll produce more petroleum in the pipeline.
They told the House Finance Committee, Wednesday, they'll take small steps, like directing more money at certain existing projects and perhaps drilling a few more exploration wells.
BP, ConocoPhillips, Exxon Mobil and smaller producers like Great Bear, Anadarko and Brooks Range Petroleum Corp. all gathered to testify on House Bill 110, which would reduce certain tax rates on the oil industry and create incentives to spur exploration and production.
The bill was introduced by Gov. Sean Parnell and is a priority of his administration.
“All the board wants to see at the end of this month is ‘what is the Alaska tax regime? What the heck is going on?’” said Ken Thompson, Managing Director of AVCG, LLC, a smaller company which is drilling the North Slope’s only new exploration well this year.
Thompson, along with business partner Bart Armfield of Brooks Range Petroleum Corp. said they'd continue exploring whether or not HB 110 passes, but that the tax breaks and incentives would mean they'd use two rigs instead of one.
“We can see a revenue-producing stream by mid-2013,” said Armfield.
BP said the bill, if passed, likely would not compel the company to drill new exploration wells, but rather to focus on keeping existing wells producing.
“I will be significantly more successful in getting money to progress some of the projects that we put on hold,” said Claire Fitzpatrick, BP Alaska chief financial officer.
Fitzpatrick called in from London where she said she had just finished up a meeting with company’s head, who had asked about HB 110 progress.
Lawmaker reaction during a break in the hearings was mixed.
“The question of whether or not we’ll get the result we want from House Bill 110, which is to increase production -- companies are not able to say absolutely, but they are saying everything up to that point,” said Rep. Mia Costello (R-Anchorage).
“We’re not hearing from anything but the industry people so far, which I think gives us a pretty one-sided view of what’s going on. That’s certainly not going to be satisfactory to me,” said Rep. Mike Doogan (D-Anchorage).
The public will have an opportunity to testify on the House oil taxes bill Thursday.
The Senate version of the measure is still in the Resources Committee. Senate President Gary Stevens (R-Kodiak) was initially skeptical of the bill, but said Monday he could see them passing a scaled-down version before the end of session.
“It’s not going to be exactly the bill the governor introduced, but I think there are some issues in his bill that work quite well,” said Stevens.