Permanent fund asks AOGCC to investigate North Slope costs

Petroleum News Alaska Staff

The Alaska Permanent Fund Corp. has asked the Alaska Oil and Gas Conservation Commission to investigate whether costs associated with transporting North Slope oil have limited the amount of oil developed from state leases.

The permanent fund board of trustees passed a resolution Feb. 12, requesting that the commission conduct “an investigation of all maintenance and operational practices, including tariff and facility pricing that may have an impact (limiting) the amount of oil developed from state leases…” The board asked the commission to report “the results of the investigation and any steps that the AOGCC is prepared to take to increase production from state leases.”

Robert Storer, executive director of the Alaska Permanent Fund Corp., said in a Feb. 19 letter to AOGCC Commissioner Dan Seamount that when Trustee Carl Brady introduced the resolution he told the board he had concerns “regarding the tendency of the larger oil companies in Alaska to allow their leased oil fields to lay undeveloped as the oil companies pursue more economically viable opportunities elsewhere around the world” while “smaller oil companies might find such fields economically attractive for current production, which would benefit the state.”

Brady was concerned that barriers, “namely standing underutilized leases,” bar smaller companies from leasing the fields and producing oil.

Storer said the board is aware that its concerns “may extend to other regulatory agencies in addition to the AOGCC,” and asked Seamount to share the concerns expressed in the resolution with “any relevant agencies.”