ConocoPhillips Co. reported net earnings of $535 million from its Alaska operations in the third quarter, up 6.5 percent year-over-year but down 3 percent quarter-over-quarter.
With its effective tax rate down year over year, Alaska’s largest producer saw its earnings increase over last year despite declining production, steady or falling commodity prices and increased spending. However, ConocoPhillips notes it is currently paying more than twice as much in state and federal taxes in Alaska as it earns from operations in the state.
“We hope that the 2013 state legislature will enact meaningful severance tax reform to attract more capital investment in key legacy fields,” Bob Heinrich, vice president of finance for ConocoPhillips Alaska, said in a prepared statement. “It will take more investment than we see today to stem the North Slope’s continuing decline.”
Companywide, ConocoPhillips earned nearly $1.8 billion in the third quarter, down considerably from nearly $2.6 billion earned during the same period last year.
ConocoPhillips produced some 176,000 barrels of oil equivalent per day in Alaska during the third quarter, down around 32,000 barrels of oil equivalent per day from the same period last year. This 15 percent year-over-year drop reflects “normal field decline and increased turnaround activity in the current quarter,” according to the company.
The Alaska unit said “inventory sales” added some $120 million in earnings this quarter.
ConocoPhillips paid some $917 million in taxes and royalties to Alaska and the federal governments during the third quarter, including $651 million for “severance taxes, royalties, property taxes and state income tax” in Alaska, according to the company.
See story in Oct. 28 issue, available online on Friday, Oct. 26 at 11 a.m. at www.PetroleumNews.com