ANCHORAGE, Alaska — Oil producers, including BP and ConocoPhillips, painted a grim picture of Alaska's North Slope petroleum industry during a Wednesday gathering of the Resource Development Council, an industry group.
BP told the gathering that it plans to invest $700 million in Alaska in 2012, down from $800 million in 2011.
Claire Fitzpatrick, BP Exploration Alaska’s chief financial officer, said that the company will continue existing experiments with heavy oil for the next few years, but that there will be no new projects on that front.
ConocoPhillips Alaska president Trond-Erik Johansen noted that Alaska oil production continues to decline, while Lower 48 production increases.
Johansen said Alaska is an increasingly costly and challenging place to operate, in part because the "easy oil" is almost gone.
Both companies blamed what they called a burdensome Alaska oil tax structure for smothering new investment.
Johansen said that if the legislature passes Gov. Sean Parnell's oil-tax-reduction bill, HB 110, "you will see more drilling."
Talk of oil taxes, always a contentious issue in state politics, is heating up as the 2012 legislative session approaches.
Opponents of oil tax cuts worry Alaska won't get anything in return for such incentives, saying that the bill amounts to a multi-billion-dollar giveaway to some of the most wealthy companies in the world.
Supporters say lowering tax rates would spur a boost in production that would more than offset the state’s initial drop in revenue, and that doing so is the only way to keep the trans-Alaska pipeline filled with oil.
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