Slope Production and Pipeline Profits Report
Industry Making $10,000 per Minute
oil industry is making more than $10,000.00 per minute after taxes from Alaska
North Slope and associated pipeline operations, according to a report by this
writer released June 2 by the Prince William
Sound Regional Citizens' Advisory Council. Three major oil companies - BP,
ConocoPhillips and ExxonMobil - control approximately 95 percent of North Slope
production, as well as the Trans-Alaska Pipeline System (TAPS).
the key findings of the 98-page report:
When Alaska North Slope crude oil averaged $38.84 per barrel in 2004, the industry
net revenue take on North Slope production and associated pipeline operations
(including TAPS) was approximately $15.0 million per day, or 53.8% of the total
net revenue take. By comparison, the state received $7.7 million (27.6%) and federal
take was $5.2 million (18.6%).
1996 and 2004, industry retained more than half of the net revenue take - 54.1%,
compared to 32.6% received by the state of Alaska and 13.4% by the federal government.
If oil prices remain at or near $40.00 per barrel through 2005, the industry will
retain more than half of the net revenue take from North Slope and associated
pipeline operations for the eighth time in the past 10 years.
at low prices sets the North Slope production and pipeline enterprise apart from
national profit leaders such as IBM, General Motors and Ford, which lose money
in bad years. For example, when oil prices averaged $12.55 per barrel in 1998,
industry still earned profits of approximately $2.3 million per day on North Slope
production and pipeline operations.
analysis indicates that the operators of the North Slope oil fields and the TAPS
take a significantly larger share of the take than indicated by a similar analysis
by the Alaska Department of Revenue, primarily due to this report's use of estimated
effective federal income tax rates instead of the nominal 35% rate used by the
industry and corporate financial reports indicate that the Alaska North Slope
operations continue to be competitive with other petroleum provinces.
For press coverage
of the report, see:
cites oil companies' big profits - ALASKA CRUDE: Study confirms companies
can afford more safeguards, advisory council claims," Anchorage Daily News,
June 3, 2005 (p. A-1)
oil profits: Fineberg report should generate plenty of Alaska debate,"
Anchorage Daily News, June 5, 2005 (editorial, p.