Regulatory and fiscal stability herald bright future for investment in Alaska
There is a renaissance underway on the North Slope driven primarily by two huge projects – Santos’ and Eni’s Pikka development and ConocoPhillips’ Willow. Together, these two, new oil fields will increase production to levels not seen in in two decades.
Despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and fluctuating oil prices –Alaska can expect $22 billion in planned oil and gas industry investment between 2025 and 2030, according to a petroleum economics study by Anchorage-based McKinley Research.
“By 2034, more than 60% of North Slope production will come from fields that, today, have yet to put a single drop into the Trans Alaska Pipeline System,” the study found.
We cannot control many of the challenges Arctic operations bring, but we can maintain fair and stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.
Let’s keep Alaska competitive!
What’s at stake
$4B
State & Local Revenue
FY25
70,425
Alaskan Jobs Supported
Direct/Indirect
$0.5B
Grow the Permanent Fund
FY22 Dedicated Revenues to Corpus
$5.8B
Spending with Local Businesses
Annual
Source: McKinley Research for AOGA
Stable tax policy leads to resource renaissance on the North Slope
Two fields are behind one of the largest increases in North Slope production in decades.
The U.S. Energy Information Administration has increased its forecast and now says Alaska oil production will increase by 13% in 2026, reaching 477,000 barrels per day, the highest level of production since 2018.
The agency attributes the production increase to two development projects: ConocoPhillips' Nuna project, which came online in December 2024, and Phase 1 of the Pikka oilfield, jointly owned by Santos and Repsol.
Pikka Phase 1 is expected to come online during the first quarter of 2026. Nuna production is anticipated to peak at 20,000 barrels per day, while the Pikka Phase 1 project is anticipated to reach peak production of 80,000 barrels per day by mid-2026.
EIA commented that the expected peak production from Pikka Phase 1 is now higher than what EIA had originally forecast, the result of an expectation by Santos of an accelerated ramp-up to Pikka Phase 1 peak production and with recent well tests demonstrating high productivity.
The huge Pikka field, located between the Kuparuk River unit and the Colville River unit to the west of the central North Slope, holds oil reserves close to 900 million barrels, with 400 million barrels associated with the Phase 1 development.
ConocoPhillips Alaska purchased 100% ownership in Nuna in 2019 and added the field to its adjacent Kuparuk River unit. That then enabled the company to develop the Nuna resources from the existing KRU 3S drill site. ConocoPhillips estimates peak production of 20,000 barrels of oil per day with cumulative recovery of around 100 million barrels.
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Oil and gas employment was one of the bright spots in the annual economic forecast at the Resource Development Council’s annual resource conference.
Oil and gas-related jobs now average 8,800, up from about 8,100 in 2024 and 7,800 in 2023. These are jobs with oil producers and don’t include petroleum-related construction, which is up, Tim Bradner writes in his Alaska Economic Report.
It all began with a “major oil price reduction, major corporate restructurings and change,” John Crowther, commissioner of the Alaska Department of Natural Resources, told Petroleum News.
An oil crash that ended with today’s renaissance on Alaska’s North Slope.
"Right now we see companies at every step of the development life cycle. They're taking the steps of developing exploration campaigns, exploration units, exploration wells, they're moving forward to characterization and there are companies working on project design and development," Crowther said.
The North Slope hasn't "moved in an upward direction and overall year on year production increase in a measurable sense – in a double-digit percentage sense – since the fields started up on the slope and so it really is a new paradigm for Alaska," Crowther said.
“It's a hard business and so are the challenges. You have to navigate the challenges, and you have to take advantage of the opportunities and that's what I think we're seeing."
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Letter from the co-chairs
Fair and Competitive oil taxes are working
There is a resurgence in oil production and jobs in Alaska that is directly related to our current oil tax policy. SB 21, a fair and competitive tax policy, replaced the antiquated ACES tax structure that drove down petroleum investment for more than a decade. Thanks to SB 21, Alaskans have the greatest opportunity of our generation on the North Slope today.
Some present and former legislators argue that SB 21 was a mistake, but the facts speak for themselves.
The Willow and Pikka projects, years in the making, are in active development, with Pikka now expecting first production any day now. These and other robust investments in Alaska’s future would not have occurred under the previous punitive tax regime. Between the Willow and Pikka projects alone, the oil and gas industry is spending over $10 billion in Alaska, with each project generating thousands of construction jobs and hundreds of operating jobs.
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