BP Exploration (Alaska) Inc. earned $772 million in 2010, less than half what the local subsidiary of the British oil giant earned in 2009, a drop caused by events outside Alaska.
Those profit figures paint an incomplete picture of BP’s year in Alaska because several subsidiaries of BP Exploration (Alaska) operate outside the state and BP manages its midstream operations, such as the trans-Alaska oil pipeline, through another subsidiary.
Taking that into account, 2010 appeared to continue two trends for BP and the Alaska oil industry at large: higher revenues as rising oil prices offset declining production, and higher taxes as rising oil prices bump up the base rate for production taxes in Alaska.
BP Exploration (Alaska) brought in $5.4 billion in revenue in 2010, up from $5 billion in 2009, but saw profits fall considerably from $1.9 billion in 2009 because of a $1.5 billion expense related to “impairment and losses on sale of businesses and fixed assets.”
That $1.5 billion charge “has nothing to do with our Alaska oil and gas operations,” BP Exploration (Alaska) spokesman Steve Rinehart told Petroleum News by e-mail on March 2. “In the same vein, the major part of the increase from the prior year in the ‘sales and other operating revenues’ is also due to non-Alaska operations,” Rinehart wrote.
BP Exploration (Alaska) paid $1.1 billion in taxes in 2010, roughly similar to 2009, but appears to have paid more to the State of Alaska in oil production taxes. BP Exploration (Alaska) paid $998 million in “production and similar taxes” in 2010 compared to $602 million in 2009. That category represents Alaska production taxes, according to Rinehart.
See story in March 6 issue, available online by 11 a.m. Friday, March 4, at www.PetroleumNews.com