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
Willow is officially more than halfway built.
ConocoPhillips Alaska has passed the halfway mark on construction of Willow, now projected to cost $9 billion due to rising inflation and supply chain costs.
Despite very harsh winter weather conditions in NPR-A, crews completed the season’s objectives, including critical roads, pads and bridges that will keep construction moving forward. Work is also progressing on the pipeline connection that will eventually move Willow oil through existing North Slope infrastructure to TAPS.
The scale is significant: approximately 2,000 people worked on Willow last winter, with another 2,000 expected when construction ramps up again next winter.
And ConocoPhillips is already looking beyond Willow. Four exploration wells were drilled nearby this winter as the company searches for additional resources that could one day utilize Willow’s processing infrastructure.
Willow remains on schedule for startup in early 2029, with expected peak production of ~180,000 barrels per day.
Billions invested. Thousands of jobs. New infrastructure. New exploration. And potentially 180,000 more barrels a day of American energy.
That’s a big investment in Alaska’s future.
PHOTO CREDIT: ConocoPhillips Alaska
Santos wasted no time before launching its search for a second string of pearls on Alaska’s North Slope.
Santos Ltd. subsidiary Oil Search has applied to the U.S. Army Corps of Engineers for permits to develop Quokka, a new discovery southeast of the Pikka field, which is now producing about 20,000 barrels/day. Quokka is the second of three nearby discoveries in the Nanushuk formation.
In its announcement of the Quokka appraisal well this spring, Santos estimates that recoverable reserves total 177 million barrels in a “Class 2C” estimate, or an estimate with a high degree of confidence. The resources tend to grow as drilling is done.
Its Quokka prospect will be similar in scope to Pikka, with two drill pads, an oil processing facility and field pipelines and a pipeline to connect Quokka with a connection to existing pipelines. Petroleum News reported the application in mid-July.
The Quokka-1 appraisal well, which was spudded on January 1, reached a total depth of 4,787 feet. Technical analysis has confirmed approximately144 feet of net oil pay within the Nanushuk formation. Following a single-stage stimulation, the well flowed at a rate of 2,190 barrels of oil per day.
Santos CEO Kevin Gallagher said results confirm Quokka as a significant addition to the company’s portfolio.
“The Quokka-1 results demonstrate the exceptional quality of the Nanushuk reservoir and confirm our geological assessment of this significant accumulation,” the CEO said.
“Located strategically to the east of our Pikka phase 1 development, Quokka represents another high-return opportunity that strengthens our position on the North Slope and extends our development runway in Alaska for years to come.”
The new Pikka field is maintaining an approximate 20,000 barrels per day of oil production as Santos prepares to bring new producing wells on-line. The wells have been drilled but operators are waiting for the start of seawater injection to maintain reservoir pressure. The company is on schedule to reach its phase one target of 80,000 barrels per day by the third quarter of 2026, Santos said. Pikka is owned 52% by Santos, who is the field operator, and 49% by Repsol.
About 40 miles south of Deadhorse, near the Dalton Highway and Trans Alaska Pipeline, a small Australian company believes it’s about to add more oil and more opportunity to its south Prudhoe resource estimate.
88 Energy Limited recently received formal award notice for 14 state leases covering 34,301 net acres, consisting of 16,507 acres at South Prudhoe and 17,794 acres at Kad River East. The oil and gas explorer has also secured a Nordic Rig-3 and Arctic-rated camp for its planned Augusta-1 exploration well, targeting a Q1 2027 spud on the North Slope. The company’s quarterly update also highlights progress on Project Phoenix, and a cash balance of $8.2 million as of 30 June 2026.
The Augusta-1 exploration well is designed to test three proven, stacked reservoir intervals: Ivishak, Kuparuk and Upper Schrader Bluff.
Industry analysists welcome these small, independent explorers to the North Slope, saying they are more nimble than the majors and can deliver the smaller oil plays to market that are critical to keeping overall production up. The 88 leases are of particular interest because they are all adjacent or near to the existing Haul Road and pipeline, thus reducing infrastructure needs.
You can read more here: akheadlamp.com/more-oil-more-opportunity-88-energy-grows-south-prudhoe-resource-estimate/
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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