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We provide an update of the FY 2016 budgets actions (lower item this page).

North Slope oil production is running above last year based on new data from the Alaska Department of Revenue. Based on preliminary information, production from the slope has averaged 527,000 barrels per day for the state’s Fiscal Year 2017, the budget year that ended June 30.

”It’s definitely a year-over-year increase,” said Dan Stickel, chief petroleum economist at the revenue department.

The figures are up from a 514,900 b/d average for FY 2016, the 12-month period, which ended June 30, 2016, and 501,000 b/d for the previous year, FY 2015.

The FY 2017 increase would be the second year in which output climbed for the North Slope, and it appears to have ended, at least temporarily, a long slide in slope production, which was at 2 million b/d in 1988.

How long it can be sustained is uncertain, however. Although crude oil prices are down, North Slope operators are still getting the benefit of new projects began during high price years in 2014 and 2015, state officials said.

Alaska’s Legislature approved changes in the state’s oil production tax late Saturday that would end a program of the state making cash reimbursements to explorers and developers of new discoveries, legislative leaders said.

“Ending the cash payments, which are unsustainable for the state, allows us to move toward a comprehensive fiscal plan for Alaska,” to address revenue shortfalls and budget problems, House Speaker Bryce Edgmon said in a statement.

The bill, House Bill 111, makes other changes that indirectly increase state taxes on producers, but the amount of the increase is still uncertain. Kara Moriarty, CEO of the Alaska Oil and Gas Association, and industry tax specialists are still reviewing the changes, said. Read the rest of this entry »

The extended state legislative session continued June 15 with no resolution in sight, or to a complex dispute over state oil and gas taxes that is the main holdup to adjournment. There had been hopes for an agreement last Monday, and then Wednesda, but a House-Senate conference committee on House Bill 111, the tax bill, held that day ended with no agreement. Read the rest of this entry »

House and Senate leaders were to have met Thursday afternoon to try and resolve disagreements on an adjournment package. House Majority Leader Chris Tuck, D-Anch., told us that if a deal is reached legislators will head back to Juneau Monday, July 10, to vote on the deal. If there’s no deal, just a few leaders will go down for another “technical” session.

The hangup seems to be the oil and gas tax bill, HB 111. Both bodies agree the state tax credit cash payments should end but the remaining disagreement seems to be over how tax deductions on future production tax liability are structured. The House wants one structure and the Senate wants another. We explain in our next Legislative Digest (private subscription).

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