ConocoPhillips Co. reported adjusted earnings of $2.3 billion from Alaska in 2012, up nearly 13 percent from $2 billion in 2011 despite falling production and higher spending.
The largest producer in Alaska paid $4.9 billion in state and federal obligations in 2012.
As has been the norm in recent years, ConocoPhillips’ annual earnings come as state lawmakers are debating whether and how to change the fiscal system covering oil production in the state. And, as has also been the norm in recent years, the figures provide plenty of statistics to bolster arguments both for and against those revisions.
Earnings increased in 2012, but ConocoPhillips continues to shoulder a larger tax rate in Alaska than it does in some other regions. Capital spending in Alaska increased year-over-year, but the bump is largely attributable to ConocoPhillips sanctioning the CD-5 Alpine satellite in late 2011; ConocoPhillips is spending much less in Alaska than in its other segments. Alaska continues to be the most productive oil region for the company, but the Lower 48 is on pace to overtake the Last Frontier within the next two years.
“The fourth-quarter earnings continue the general trend where we pay twice as much in taxes as we keep,” Bob Heinrich, the vice president of finance for ConocoPhillips in Alaska, said in a statement on Jan. 31. “We are hopeful that the Governor and legislature will be successful in creating a better business climate on the North Slope.”
See story in Feb. 3 issue, available online at noon, Friday Feb. 1, at www.PetroleumNews.com