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
Pikka phase 1 is almost here. In its Jan. 21 first quarter report, Santos says its North Slope Pikka phase 1 is “98% complete and nearing mechanical completion, with commissioning progressing,” according to a bulletin from Petroleum News.
“Twenty-four wells were drilled and completed at the end of the fourth quarter. The 23rd well achieved the highest productivity to date, producing at an initial rate of approximately 8,000 barrels of oil per day. The 24th well was the second combination well, developing two reservoir sections from the one well,” the publication said.
Capital expenditure for phase 1 has increased by approximately $200 million, primarily due to “inflationary pressure on labor and materials across the North Slope, tariffs on production modules for the sea water treatment plant and logistics costs relating to the MacKenzie River transit.”
The project remains on track for first oil late in the first quarter of 2026, with ramp up to a plateau of 80,000 bopd expected around the middle of the year.
“This is the year we’ve been waiting for,” says Department of Natural Resources Director Derek Nottinghom. Alaska’s oil output is now projected to reach 465,000 barrels per day according to DNR’s FY2026 oil production forecast.
Nottingham highlighted tangible progress: “The difference this year is that there are boots on the ground, facilities are being installed – this is reality rather than concept.” He pointed to projects like Pikka, now at a “point of no return,” with commissioning underway for first oil. The forecast’s optimism is further fueled by federal opportunities under the current administration, including four planned wells in the National Petroleum Reserve-Alaska.
“The highlight, however, was Milne Point’s success story, a narrative of revival that captivated the committee,” Todd M Lindley, an energy and engineering professional, writes in Must Read Alaska. “Acquired by Hilcorp in 2014 when production languished near 19,000 bopd, the field has been transformed through relentless reworking. Hilcorp’s strategies of continued drilling and polymer flooding have propelled output back to near-peak levels, defying expectations for a mature reservoir with heavy, viscous oil.”
“Revitalization of a mature field to replicate peak production is almost unheard of,” Nottingham said.
Watch the presentation: www.akleg.gov/basis/Meeting/Detail?Meeting=HFIN%202026-01-21%2013:30:00
Or read more here: mustreadalaska.com/the-year-weve-been-waiting-for-alaskas-oil-revival-discussed-in-house-finance
February is the anniversary of two crucial events in Alaska’s history. One opened the path to today; the other is paving the way for tomorrow.
On Feb 16, 1968, ARCO (Atlantic Richfield Company) & Humble Oil (now ExxonMobil) announced a mammoth oil discovery at Prudhoe Bay. It would become the largest conventional oil field in North America, and it would transform Alaska from barely able to pay its bills to one of the richest states in the union.
"The balance sheet of Alaskan history is simple: One Prudhoe Bay is worth more in real dollars than everything that has been dug out, cut down, caught, or killed in Alaska since the beginning of time," according to the late historian Terrance Cole.
Prudhoe Bay has produced more than 12.5 billion barrels of oil, the most productive oil field in U.S. history — and it’s still pumping strong.
On Feb 27, 1923, President Harding established the National Petroleum Reserve - 4 (NPR-4) on the North Slope, now called NPR-Alaska, a vast approximately 23-million-acre area on the western side of Alaska's North Slope. The U.S. Geological Survey estimates there are over 2.7 billion barrels of oil and 114.36 trillion cubic feet of natural gas in the Reserve.
ConocoPhillips is aggressively exploring the area as it works on its Willow Project, which expects first oil in 2029.
The Willow project is estimated to produce 180,000 barrels of oil per day at its peak, decreasing American dependence on foreign energy supplies. The project is projected to deliver $8 billion to $17 billion in new revenue for the federal government, the State of Alaska and North Slope Borough communities. Willow will be built using materials primarily made and sourced in the U.S. and has created over 2,500 construction jobs and approximately 300 long-term jobs.
And, it’s the anchor for the next oil era in Alaska.
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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