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Regulatory and fiscal stability are key
to vibrant resource industry

It’s a new day on the North Slope despite the challenges that come with operating in the Arctic – high costs, harsh weather, supply chain issues, legal hurdles and struggles to find adequate financing.

For the first time in a long time North Slope production is projected to remain stable in the near term and increase in the late 2020s. This is excellent news for Alaska. Resource industries, particularly oil and gas, form the backbone of our economy. They are labor intensive, pay some of the best wages in the state and require continued capital investment to maintain or expand production levels. Production is key to jobs and revenue for Alaska.

We cannot control many of the challenges Arctic operations bring, but we can maintain stable tax policies that attract the capital needed to keep our resource industries healthy so they can produce jobs and revenues for Alaskans.

What’s at stake

$3.1B

State & Local Revenue

FY19

77,600

Alaskan Jobs Supported

Direct/Indirect

$549M

Grow the Permanent Fund

FY22 Dedicated Revenues to Corpus

$4.4B

Spending with Local Businesses

Annual

Source: “The Role of the Oil and Gas Industry in Alaska’s Economy,” January 2020, McKinley Research

Jim-Jansen Joe Shierhorn

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. 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 in the next few years, with each project generating 2,500 construction jobs and hundreds of operating jobs.

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Santos has once again moved Pikka’s start date up and now expects first production at the end of 2025.

Santos is working with more than 40 Alliance members on Pikka, which involves a $3 billion investment for Santos and its partner Repsol, according to an update in the winter edition of the Alliance’s Link.

“The project is full steam ahead with pipelaying and making great progress early in their 2024 and 2025 winter construction season,” said company spokesman Steve Wackowski.

Santos is also focused on local hiring. During his speech to the Alaska Oil and Gas Association (AOGA) conference last summer, company CEO Kevin Gallagher said, “We deliberately focused on recruiting Alaskans to join our team. Over 80% of our team were already residents when they came on board and more than 95% of the company’s North America employees live in Alaska.”

Santos recently commissioned its main camp on the Nanushuk Operating Pad, where the first meal was served in December. The camp is already full and Santos expects more than 2,000 contractors to rotate through it this season.

The Nanushuk Operations Pad holds the physical operating control room and the personnel camp. “NANA [Regional Corporation] has done a brilliant job fabricating all of our crew quarters and operation center, and that’s over 170 modules alone,” says Alaska Executive Vice President Bruce Dingeman.

The company has worked closely with Nuiqsut, the village nearest to the Pikka unit, to build a new boat launch, a bridge replacement, and a new wastewater treatment plant. Together with Repsol, the Spanish energy company that owns a 49% interest in Pikka, Santos pumped roughly $60 million into Nuiqsut.

Through the development phase, Pikka amended its plans to account for local concerns, everything from moving a drill site farther from the Colville River to using light fixtures that minimize skyward glare. Santos also pledged that operations would have net-zero carbon emissions by 2040.
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Santos has once again moved Pikka’s start date up and now expects first production at the end of 2025.

Santos is working with more than 40 Alliance members on Pikka, which involves a $3 billion investment for Santos and its partner Repsol, according to an update in the winter edition of the Alliance’s Link.

“The project is full steam ahead with pipelaying and making great progress early in their 2024 and 2025 winter construction season,” said company spokesman Steve Wackowski.

Santos is also focused on local hiring. During his speech to the Alaska Oil and Gas Association (AOGA) conference last summer, company CEO Kevin Gallagher said, “We deliberately focused on recruiting Alaskans to join our team. Over 80% of our team were already residents when they came on board and more than 95% of the company’s North America employees live in Alaska.”

Santos recently commissioned its main camp on the Nanushuk Operating Pad, where the first meal was served in December. The camp is already full and Santos expects more than 2,000 contractors to rotate through it this season.

The Nanushuk Operations Pad holds the physical operating control room and the personnel camp. “NANA [Regional Corporation] has done a brilliant job fabricating all of our crew quarters and operation center, and that’s over 170 modules alone,” says Alaska Executive Vice President Bruce Dingeman.

The company has worked closely with Nuiqsut, the village nearest to the Pikka unit, to build a new boat launch, a bridge replacement, and a new wastewater treatment plant. Together with Repsol, the Spanish energy company that owns a 49% interest in Pikka, Santos pumped roughly $60 million into Nuiqsut.

Through the development phase, Pikka amended its plans to account for local concerns, everything from moving a drill site farther from the Colville River to using light fixtures that minimize skyward glare. Santos also pledged that operations would have net-zero carbon emissions by 2040.

Santos has another very busy work schedule ahead as it prepares for first oil in 2026.

In its 2025 Plan of Development filed with the State, the company “commits to continuing the Phase 1 scope of Pikka development, which includes the following facilities and infrastructure work,” Petroleum News reports:

- Installation of the NPF module;
- Installation of remaining pipelines along all pipeline routes;
- Continued work on the grind and inject and saltwater treatment facilities;
- Import and export pipeline work to enable oil sales, seawater import for pressure maintenance, and fuel gas import; and
- Completion of work on the Nanushuk Operation Pad Nanushuk ;
- Drilling 6 to 8 development wells;
- Completion of work on the Nanushuk Operation Pad.

The Nanushuk oil field is estimated to hold more than 1.2 billion barrels of recoverable light oil, while the Pikka Unit is estimated to contain more than 700 million barrels of recoverable oil resources.

An Australian-listed oil and gas company, Santos holds 51% interest, and is the operator of Nanushuk development project, while the remaining 49% interest is held by the Spanish energy major Repsol.

Photo from Santos Ltd.
... See MoreSee Less

Santos has another very busy work schedule ahead as it prepares for first oil in 2026.

In its 2025 Plan of Development filed with the State, the company “commits to continuing the Phase 1 scope of Pikka development, which includes the following facilities and infrastructure work,” Petroleum News reports:

- Installation of the NPF module;
- Installation of remaining pipelines along all pipeline routes;
- Continued work on the grind and inject and saltwater treatment facilities;
- Import and export pipeline work to enable oil sales, seawater import for pressure maintenance, and fuel gas import; and
- Completion of work on the Nanushuk Operation Pad Nanushuk ;
- Drilling 6 to 8 development wells;
- Completion of work on the Nanushuk Operation Pad.

The Nanushuk oil field is estimated to hold more than 1.2 billion barrels of recoverable light oil, while the Pikka Unit is estimated to contain more than 700 million barrels of recoverable oil resources.

An Australian-listed oil and gas company, Santos holds 51% interest, and is the operator of Nanushuk development project, while the remaining 49% interest is held by the Spanish energy major Repsol.

Photo from Santos Ltd.
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The mission of KEEP Alaska Competitive is to promote and preserve competitive, fair and stable taxes on Alaska’s resource industries to enhance investment, jobs and production to secure Alaska’s long term economic future.