Spring forecast up driven by oil prices
Alaska Department of Revenue Commissioner Bryan Butcher said April 6 that the state’s spring revenue forecast shows an estimated $7.3 billion expected in state unrestricted revenue in fiscal year 2011, and $7.3 billion for FY 2012, compared to the fall revenue forecast of $5.4 billion in FY 2011 and $5.7 billion in FY 2012.
The increase is driven by Alaska North Slope oil prices, which are now forecast to be $91.13 per barrel in FY 2011 and $94.70 in FY 2012, compared to fall projections of $77.96 and $82.67 respectively.
Revenue from oil and gas production is expected to provide more than 89 percent of unrestricted revenue through FY 2020.
FY 2011 North Slope oil production is expected to be some 605,000 barrels per day, a 6 percent decline from FY 2010. For FY 2012, however, production is expected to rise 0.8 percent, to 610,000 bpd, based on Nikaitchuq production which began in February, the restart of the Badami field and continuing development at Oooguruk.
The assumptions underlying the department’s forecast assume a continuing rise in demand for petroleum products as the global economy recovers. Concerns about supply disruptions as turmoil in the Middle East and North Africa continues are expected to produce higher and more volatile prices in the short term.
North Slope spending is expected to continue at slightly higher than current levels, but at lower levels than forecast in the fall. Total expenditures are expected to increase in FY 2011, with FY 2011 forecast lease expenditures at $5 billion and FY 2012 forecast at $5.3 billion, compared to fall forecast amounts of $5.1 billion and $5.5 billion.
—Petroleum News
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